The parent company of Reader's Digest – that venerable doctor’s office fare – will look toward bankruptcy court to restructure its debt load.
Reader's Digest Assn. said Sunday that it will file Chapter 11 reorganization petitions for its U.S. operations. The company said the move will allow it to reduce its debt load by 80%. Its international operations will not be reorganized through these petitions, the company said.
“After considering a wide range of alternatives, we believe this course of action will most effectively enable us to maintain our momentum,” Chief Executive Robert E. Guth said in a statement.
The company said it aims to convert about $465 million in debt to equity and reduce about $105 million worth of other corporate financing. Agreements with more than 70% of its note holders have been reached, the company said.