The British division of Reader’s Digest has filed for administration after over 50 years of operation in the UK.
The administration places 177 jobs at risk after the American parent company said that it could no longer support the publication in the UK.
This decision was made two weeks after a dispute between the company and the UK Pensions Regulator failed to find a way for the company to pay down a £125m deficit in its UK pension fund.
As a result of an agreement not being able to be found, the American company the Reader’s Direct Association (RDA), has also not been able to emerge from Chapter 11 bankruptcy after almost six months.
A statement from the RDA, explained: "The decision by the RDA UK board to place the UK company into an orderly insolvency process follows the recent decision by the UK Pensions Regulator that it would not support an agreement already reached between RDA UK, the trustees of its pension plan and the UK Pension Protection Fund (PPF) to settle a longstanding pension plan liability.
"RDA does not expect the UK administration to have a material impact on its financial performance as the UK business has been operating with negative free cash flow, and without the contemplated restructuring the corporation did not see a clear pathway to profitability in the UK over the next several years."
A spokesperson for the Periodical Publishing Association, told The Drum: “It’s sad to see this happen to a historic and well-loved magazine. We hope that Reader’s Digest will find a white knight to maintain its place as one of the most popular titles in the UK.”