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Readers Digest files for bankruptcy – again

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By John Glenday, Reporter

February 19, 2013 | 2 min read

RDA Holdings, publisher of the Readers Digest, has announced that it has filed for bankruptcy for the second time in four years after falling sales made its debt burden unsustainable.

It is hoped that the move will allow RDA to reach terms with creditors on outstanding debt, allowing the group to focus on growing the online sales of its 75 magazines.

In a bankruptcy filing in New York RDA said it currently had $1.1bn in assets, but $1.2bn of liabilities with the hope being that the firm can come out of bankruptcy within six months with just $100m of debt.

In addition to the Readers Digest RDA also publishes Taste of Home, The Family Handyman, Birds & Blooms and others with one strategy being to offload some titles to reduce debt and focus more on digital publishing.

Bob Guth, chief executive of RDA, said: “The key message here is that we have a lot of confidence in the future of the business based upon the success of the ongoing operational transformation, but we haven’t had as much success with the balance-sheet side of it.”

Readers Digest began insolvency proceedings last month after axing its direct marketing division.

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