Court Approves Reader’s Digest Plan of Reorganization
The Reader’s Digest Association announced that the U.S. Bankruptcy Court for the Southern District of New York has confirmed its plan of reorganization and expects to emerge from bankruptcy at the end of July.
Upon emergence, the company will have reduced its debt by over 80% from approximately $500 million to approximately $100 million and have a stronger cash position. The company will have converted approximately $465 million of secured notes to equity. In addition, it will focus solely on its most profitable core businesses, having shed non-core and less profitable ones — an effort that began in earnest several quarters ago. The company has also made great progress in re-aligning its corporate infrastructure with its more narrowly defined mission.
“The court’s confirmation of our restructuring plan is an important step for our company and sets the stage for our future as a much more focused company,” said Robert E. Guth, CEO of Reader’s Digest Association. “We are taking decisive actions that are placing our business on a stronger path for the long-term and making us a more relevant and more profitable company. We have used the restructuring period to reset and refresh our company and have reconsidered nearly every aspect of our business. We look forward to laying out our go-forward strategy in the weeks ahead.”
Previously on abfjournal.com: