March 22nd, 2010 by Reed Allmand 
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.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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