Vroomtattat 2nd Gear August 18, 2009 Share August 18, 2009 Read all about it Chapter 11 plan cedes Reader's Digest to lenders By ANDREW VANACORE,AP Business Writer AP - Tuesday, August 18NEW YORK - The publisher of Reader's Digest, the country's most popular general interest magazine, said Monday it will file for Chapter 11 protection with a plan to swap a portion of its debt for ownership of the company. Reader's Digest Association Inc., which also markets books and publishes dozens of other magazines and Web sites, said it has reached an agreement in principle with a majority of lenders to erase a portion of $1.6 billion in senior secured notes. The lenders will get ownership in return. Already, this year's advertising declines have prompted the shuttering of several high-profile magazines, including Conde Nast's Portfolio, Domino and Blender. Reader's Digest CEO Mary Berner insisted, though, that the company's U.S. magazines remain strong, with the number of ad pages down less than 6 percent through the September editions. She said Reader's Digest titles rely less on luxury brands and high-income tastes, giving them an added appeal in a recession that has clobbered much of the print media industry. "Our brands are home and heartland. Our brands have a very, very Midwestern sensibility _ a back-to-basics sensibility," she said in an interview. "Reader's Digest has actually done quite well." She said some additions for the company, including the magazine Everyday with Rachael Ray and cooking site AllRecipes.com, have succeeded as well. Instead, Berner blamed two underperforming properties the company agreed to sell off last year: Books Are Fun Ltd., a company that sells books at events and book fairs, and QSP, which assists with fundraising for schools and youth groups. Even so, Reader's Digest, the iconic monthly magazine founded in 1922 as a collection of condensed articles from other publications, has been searching for a new niche as the Internet upends the magazine industry's traditional business models. In June, the magazine announced it would cut the circulation guarantee it makes to advertisers to 5.5 million, from 8 million and lower its frequency to 10 issues a year from 12. In the second half of last year, the U.S. edition of Reader's Digest had circulation of 8.2 million, down from a peak of roughly 17 million in the 1970s. The planned bankruptcy filing, which does not include operations outside the United States, marks the latest stage in a long evolution for the company. Reader's Digest went public in 1990 and was initially controlled by a charitable foundation set up by the company's founders, DeWitt and Lila Wallace. The company bought out the foundation's shares in 2002. Ripplewood Holdings LLC, a New York private equity firm, led a consortium of investors in a $1.6 billion buyout that took the company private in 2007. Those investors include GoldenTree Asset Management, GSO Capital Partners, Merrill Lynch Capital Corp., J. Rothschild Group and Magnetar Capital. In a statement Monday, Berner said the decision to file for Chapter 11 follows "months of intensive strategic review of our balance-sheet issues." The company said it will skip a $27 million interest payment on its 9 percent notes due in 2017 while it looks to build support among lenders for its restructuring plans. The agreement includes $150 million in "Debtor-in-Possession" loans to finance the company during bankruptcy protection. Overall, the company plans to shrink its debt from $2.2 billion to $550 million following Chapter 11. It said the "vast majority" of suppliers will be paid in full under the bankruptcy plan. The company said it will seek further agreements from lenders and other stakeholders before making a formal bankruptcy filing within a month. Its largest debt holders, led by J.P. Morgan Chase, include GE Capital, Aries Management, DK Partners, Regiment Capital and Merrill Lynch. The company expects to emerge from bankruptcy protection 45 to 90 days after the filing. Aside from Berner, all of the company's board members who have served since Ripplewood's $1.6 billion acquisition of the company in 2007 have resigned. Two members who recently joined will continue to serve. Sad! I've read it since young and now Bye bye ↡ Advertisement Link to post Share on other sites More sharing options...
Rjmsfire Neutral Newbie August 18, 2009 Share August 18, 2009 Don't cry, you will still have Reader's Digest to read. They are filing for bankruptcy protection against creditors, which means protecting themselves from creditors getting a court order to wind up their business to settle the liabilities. In other words, Reader's Digest will still be around. Link to post Share on other sites More sharing options...
Ender Hypersonic August 18, 2009 Share August 18, 2009 The way they market their magazine, terrible. Entice non-subcriber with illusions of near winning. Link to post Share on other sites More sharing options...
Curahee 1st Gear August 18, 2009 Share August 18, 2009 The way they market their magazine, terrible. Entice non-subcriber with illusions of near winning. Karma i muz say... Link to post Share on other sites More sharing options...
Blackforte Neutral Newbie August 18, 2009 Share August 18, 2009 The way they market their magazine, terrible. Entice non-subcriber with illusions of near winning. exactly! and the endless junk mail i'd received from them! Link to post Share on other sites More sharing options...
Parkingidiot 1st Gear August 18, 2009 Share August 18, 2009 exactly! and the endless junk mail i'd received from them! my son loves the fake car keys they send with their scam "Win a car" contest. He's collected a whole keyring filled with at least 10 of those keys... Link to post Share on other sites More sharing options...
Rickster 5th Gear August 18, 2009 Share August 18, 2009 The way they market their magazine, terrible. Entice non-subcriber with illusions of near winning. I muz agree. Their marketing is almost like a con-job and I would have been a subscriber if not becos i hated the way their marketing gets on my nerves. Link to post Share on other sites More sharing options...
Scenic98 Clutched August 18, 2009 Share August 18, 2009 I muz agree. Their marketing is almost like a con-job and I would have been a subscriber if not becos i hated the way their marketing gets on my nerves. i just got another joint mktg flyer from reader's digest and UOB and of course another promise of winning x dollars. i wonder if anyone actually win anything? they are not audited? Link to post Share on other sites More sharing options...
Scion Turbocharged August 18, 2009 Share August 18, 2009 I muz agree. Their marketing is almost like a con-job and I would have been a subscriber if not becos i hated the way their marketing gets on my nerves. same sentiments here... i like to read their interesting articles but their Nigeria-like scam-like lucky draws really put me off... dunno about others, but to me, this market way of theirs has backfired badly... Link to post Share on other sites More sharing options...
Silver_blade Turbocharged August 18, 2009 Share August 18, 2009 I muz agree. Their marketing is almost like a con-job and I would have been a subscriber if not becos i hated the way their marketing gets on my nerves. Agree...but they have been using this same tactic for over 20-30yrs and it still works. Link to post Share on other sites More sharing options...
Tarzan666 2nd Gear August 18, 2009 Share August 18, 2009 Im still bit upset they fooled me dat time when i was in pri sch. They sent me Link to post Share on other sites More sharing options...
Silver_blade Turbocharged August 18, 2009 Share August 18, 2009 Quite a few of my classmates fell for it too. My dad almost fell for it, but I insist that I wouldn't have time to read it...cos we already subscribe to Nat Geo at the time. Link to post Share on other sites More sharing options...
Swift 1st Gear August 18, 2009 Share August 18, 2009 i just got another joint mktg flyer from reader's digest and UOB and of course another promise of winning x dollars. i wonder if anyone actually win anything? they are not audited? I got that from UOB too. The "contest" looked so pro. Even got some Rx-8 prize and we can get to "select" the color of the car Link to post Share on other sites More sharing options...
Benarsenal Turbocharged August 18, 2009 Share August 18, 2009 The 'contest' is a regular thing in the States. People do win, just that chances are like winning the lottery. Best advice is to ignore it. I subscribe but I throw away all the promo stuff. Just read the magazine. Link to post Share on other sites More sharing options...
Sunnycrowe Clutched August 18, 2009 Share August 18, 2009 i oso rec two separte letters from RD n uob..... said im the selected few to hav "chance" to win $200k cash, Madza R8, laptop.... $200K cash stil give me option whether to deposit to my bank account or go collect personally etc.... look as if i oredi won? For Madza car, give me few stickers to paste for me to select car colour.... act as if i won the car?? what bull is these crap.... and the thick letters are all so professional n serious looking..... everyting seemed to imply i am already a winner.... Year after year they come up with all these marketing crap for people to subscribe to their mag.... i hope they vanish 4ever.. Link to post Share on other sites More sharing options...
Byond 1st Gear August 18, 2009 Share August 18, 2009 agree... why can;t they just cut short the process of the lucky draw and get to pick the winner at the end of the day instead of asking the potential reader to keep sending them the replies after replies... Link to post Share on other sites More sharing options...
Kxbc Turbocharged August 18, 2009 Share August 18, 2009 Aiyah, that day RD's Finance Director just wrote to me and told me I had won $200k. Shucks! I should have taken the cash before they filed for Chap 11. Link to post Share on other sites More sharing options...
Drive_carcar Clutched August 18, 2009 Share August 18, 2009 Their business model will have to change. Nowadays everybody go digital already, there are already tonnes of reading material available online, and most of it are free. With people already bombarded with tonnes of information, they just failed to stand out. Eventually it will have to close shop. ↡ Advertisement Link to post Share on other sites More sharing options...
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