Yellow pages publisher R.H. Donnelley Corp has emerged from Chapter 11 bankruptcy as a new company, Dex One Corp. The company emerged from bankruptcy after shedding $6.4 billion in debt and $500 million in annual interest payments. The yellow pages publisher filed for Chapter 11 bankruptcy in May after arranging a prepackaged bankruptcy with its creditors.
Reader’s Digest Association Inc, announced that it is delaying its emergence from bankruptcy after Britain’s pension regulator refused to approve the publisher’s agreement with pension fund trustees regarding a British pension fund deficit.
The British arm of Reader’s Digest in January reached an agreement with the trustees of its and the UK Pension Protection Fund to resolve the company’s deficit. The agreement was contingent on approval from the UK Pensions Regulator, which has indicated it will not approve the pension application.
Currently, the British entity is reviewing its options, prompting Reader’s Digest to hold off on emerging from Chapter 11 bankruptcy until the issue is resolved. But despite the delay, Reader’s Digest estimates that it will emerge from Chapter 11 bankruptcy in a few weeks.
On January 15, 2010, the bankruptcy court approved Reader’s Digests’ bankruptcy reorganization plan which cleared the way for the company’s future bankruptcy exit. The Reader’s Digest Chapter 11 bankruptcy filing was just one of many bankruptcies in the publishing industry that has many analysts shaken about the industry’s future. It is still not clear how viable Reader’s Digest will be after bankruptcy as it faces stiff competition from online publications. However, its massive reduction of debt during bankruptcy will give it an extra edge in this competitive marketplace.