Reader’s Digest publisher, RDA Holding Co., has filed for bankruptcy. Sales of the iconic magazine have continued to drop as consumers turn from print to online and electronic media.
The Chapter 11 bankruptcy, filed by EDA holding, is expected to eliminate around $465 million in debt. Documents, filed in the United States Bankruptcy Court for the Southern District of New York, reveal a reorganization plan that will reduce the company’s debt by approximately 80%
Appealing to consumers’ interest in electronic media, Reader’s Digest ran two websites that offered a forum to find and exchange recipes. As reported by Bloomberg , “allrecipes” and “Every Day with Rachel Ray” were eventually sold to the Meredith Corporation for around $175 million.
Unfortunately, profit from that sale was not enough to prevent Reader’s Digest from filing bankruptcy . The Chapter 11 filing lists several unsecured creditors including the US Federal Trade Commission, which is owed over $8 million.
According to their website , RDA publishes print and online magazines worldwide:
“We operate our businesses in two divisions: North America and International, and provide expertly curated/created content to more than 140 million consumers in 75 countries and 21 languages through multiple media platforms, including print, online, digital download, books and home entertainment products, and social media.”
The Chapter 11 bankruptcy is limited to the North America division of RDA Holding Co. In North America, Reader’s Digest magazines include the original, several cooking magazines and special interest titles such as “Birds & Blooms” and “Country Woman.”
This is the second time Readers Digest Association Holding Co. has filed for Chapter 11 bankruptcy. In 2009 RDA Holding filed for bankruptcy due to reduced revenue from advertising and extraordinary debt.
[Image via fotopedia]
