NEW YORK CITY-RDA Holding Inc., the publisher of Reader’s Digest, filed a reorganization plan yesterday that calls for shedding 80% of its debt via the conversion of $231 million of notes into equity.
The plan, filed in the U.S. Bankruptcy Court in White Plains, NY, also calls for nearly $245 million in notes to be treated as a general unsecured claim.
The plan, which must pass muster with the bankruptcy court, was made shortly after RDA won final court approval to borrow $105 million from a group of lenders while it reorganizes, according to Crain’s New York Business. A unit of Wells Fargo & Co. arranged the debtor in possession loan.
The company filed for bankruptcy Chapter 11 bankruptcy last month. Reader’s Digest also filed for Chapter 11 protection in 2009 and emerged from bankruptcy the following year. The company at one time was headquartered on its own campus in Chappaqua, NY, but later vacated the property to leased space in Manhattan at 750 South Ave. and to 44 South Broadway in White Plains. See story in Crain’s New York Business.