RDA Holding Co., publisher of the 91-year-old Reader’s Digest magazine and parent company of Greendale-based Reiman Publications, has filed for bankruptcy to cut $465 million in debt and focus on North American operations as consumers shift from print to electronic media.
Reader’s Digest, founded by DeWitt and Lila Wallace, went public in 1990. An investor group led by private-equity firm Ripplewood Holdings LLC bought it in 2007 for $1.6 billion and the assumption of about $800 million in debt. The company also filed for bankruptcy in August 2009, citing a drop in advertising spending and the debt load incurred in its acquisition.
The company listed assets and debt of more than $1 billion each in Chapter 11 documents filed in U.S. Bankruptcy Court in White Plains, N.Y. Under a restructuring agreement supported by Wells Fargo & Co., $465 million of remaining senior notes will all convert to equity, according to Bloomberg News. The company expects to have about $100 million in debt when it exits Chapter 11, about an 80 percent reduction.
The company’s flagship print magazine is read by more than 25 million people. Reiman Publications was started in 1965 by Roy Reiman in the basement of his Hales Corners home. Today, the Reiman Publications family of companies employs more than 500 people and publishes 13 national magazines, including Taste of Home, Reminisce and Birds & Blooms.
The Reader’s Digest Association bought Reiman Publications for $760 million in cash in 2002.