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Reader's Digest to file for Chapter 11 protection

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The Tampa Tribune

Published: August 18, 2009

NEW YORK - The publisher of Reader's Digest, the country's most popular general interest magazine, said Monday it will seek Chapter 11 protection from creditors amid declining circulation, an industrywide advertising slump and debt.

Reader's Digest Association Inc. said it has reached an agreement with a majority of secured lenders to restructure its debt. Under the plan, the lenders get ownership of the company and erase much of the $1.6 billion they have in senior secured notes.

The monthly magazine, founded in 1922 as a collection of condensed articles from other publications, has been searching for a niche as the Internet upends the magazine industry's traditional business models.

This year, it cut the circulation guarantee it makes to advertisers to 5.5 million from 8 million and lowered its frequency to 10 annual issues rather than 12.

The New York private equity firm Ripplewood Holdings bought the magazine in 2007.

The Associated Press

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