Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Reader's Digest Seeks Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: February 21, 2013
Key Contacts
Back
Reader’s Digest, a long-time staple in most American homes, is seeking Chapter 11 protection under bankruptcy law to unload hundreds of millions of dollars in debt.
RDA Holding, parent company of the Reader’s Digest Association, sought court protection in White Plains, New York, while it attempts to implement a restructuring plan with creditors. The proposed plan may help it shed $465 million in debt and obtain roughly $105 million in debtor-in-possession financing. The 91-year-old company is one of the highest circulation magazines in the nation. However, the publication – like many other popular magazines – has lost revenue as more consumers trend toward electronic media. RDA Holding listed $1 billion in assets and an equal amount in liabilities.
The company’s restructuring plan is supported by Wells Fargo, and will enable it to convert $465 million in senior notes to equity. If this process is finalized and carried out, RDA Holding said it will emerge from bankruptcy protection with $100 million in debt.
“After considering a wide range of alternatives, we believe this course of action will most effectively enable us to maintain our momentum in transforming the business,” said CEO Robert Guth.
RDA Holding has been forced to sell off other publications as of late due to falling subscriptions and shrinking newsstand sales. For example, it sold AllRecipes.com to an Iowa-based publication for $175 million, as well as the Weekly Reader for an unspecified amount, according to USA Today. Despite these sales, a company spokesperson said the company still has 21 leading brands in 76 countries that are continuing to thrive. After the company emerges from bankruptcy, it hopes to focus more heavily on its North American operations.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Author: Patrick T. Conlon
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
Author: Bryce S. Robins
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.