Reader’s Digest Association Inc., publisher of the iconic general-interest magazine that began gracing American homes in 1922 and now reaches a worldwide audience of 130 million, filed for Chapter 11 bankruptcy protection Monday as it faces falling print circulation in the Internet age and looming debt payments.
Magnifying the publishing world’s woes is an advertising slump that has led to the closing of several high-profile magazines.
But Reader’s Digest chief executive Mary Berner has said ad pages for the company’s U.S. magazines are down less than 6 percent through the September editions.
Reader’s Digest said the prearranged bankruptcy filing, which affects only U.S. operations, would give lenders a 92.5 percent ownership stake in exchange for lowering its indebtedness to $550 million from $2.2 billion. The filing has gotten the approval of more than 80 percent of the company’s senior secured lenders.
The publisher expects to emerge from bankruptcy protection 45 to 90 days after the filing, which was made at the U.S. Bankruptcy Court in New York.
