NEW YORK — The parent company of Reader's Digest has filed for Chapter 11 bankruptcy protection for the second time in less than four years, saying it needs to cut its debt so it can keep restructuring.
RDA Holding Co. says it will keep publishing the magazine during the bankruptcy, and aims to be out of Chapter 11 within six months.
The New York company said late Sunday that it plans to cut its debt load by 80 percent during the restructuring, leaving it with about $100 million in debt. It said it has already reached agreements with its secured lender and more than 70 percent of its secured noteholders. A group of its creditors have supplied $45 million in new financing to help Reader's Digest go through the process as part of a $105 million loan to repay existing bank debt.
Reader's Digest has also been selling off some of its assets. It sold its food website Allrecipes.com for $175 million last year, and it sold its Every Day with Rachael Ray cooking magazine in late 2011. Both went to Meredith Corp., publisher of the Better Homes and Gardens magazine.
Reader's Digest paid circulation fell 0.6 percent to 5.5 million at the end of last year, according to the Alliance for Audited Media. That was about where it stood after cutting its guaranteed circulation in 2009. The circulation-tracking company said Reader's Digest is the fifth-biggest U.S. consumer magazine by circulation, behind two AARP publications, Game Informer Magazine, and Better Homes and Gardens.