The Allmand Law Firm, PLLC Difference

Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

Reader's Digest Emerges From Chapter 11 Bankruptcy

Posted By admin || 22-Mar-2010

Readers Digest Bankruptcy

Reader's Digest Association, one of the most popular magazines in the US, has emerged from Chapter 11 bankruptcy, six months after seeking bankruptcy protection. The company said on Monday it was able to slash its US$2.2 billion ($3.1 billion) debt load by 75 per cent and boost its capital levels. It has access to US$525 million in funding after refinancing certain bonds, which also will save the company US$30 million in interest costs annually. There is another $50 million available in a revolving credit line. "Emerging with a de-levered balance sheet and a strong new capital structure is a significant step forward as we continue to transform Reader's Digest Association into a global media and marketing leader," chief executive Mary Berner said in a statement. Reader's Digest's Chapter 11 bankruptcy reorganization will give this company another chance at being competitive in an industry that is rapidly changing.  With a circulation of just over 7 million, Reader's Digest has experienced devastating declines in advertising and competition from electronic competitors.  Since 1995, the company's circulation has declined by 50 percent leading many to fear that the company was taking its last breathe when if filed Chapter 11 bankruptcy in August.   And despite the resolution of its bankruptcy in the US, the struggling magazine still has to handle its overseas financial issues.  But with its debt load significantly reduced in the US during bankruptcy, Reader's Digest may be able to absorb at least some of its losses incurred overseas.  And while it is not certain the long term fate of Reader's Digest, their emergence from Chapter 11 bankruptcy has give them a certain advantage over competitors who have not taken advantage of bankruptcy's many benefits.
Blog Home