The Best Magazine in the World Goes Bankrupt. How Does That Happen?
Yeah, we know: It's the economy, stupid.
Reader's Digest Association Inc -- publishers of Reader's Digest, arguable the best magazine in the world -- plans to file for Chapter 11 bankruptcy for its US businesses as part of a prearranged plan with lenders to cut debt by 75 percent, Reuters reports.
The bankruptcy would take the form of a prearranged filing, which comes after a company has already reached deals with lenders to reduce debt. The deal, if approved by a bankruptcy court, would allow Reader's Digest to slash its debt load to $550 million, from the current $2.2 billion.
The company expects to file its petition in bankruptcy court within 15 days hopes to conclude the restructuring process within 45 to 90 days.
The Chapter 11 filing will apply only to the company's U.S. businesses. Operations in Canada, Latin America, Europe, Africa, Asia and Australia-New Zealand will not be affected.