Reader's Digest to File Chapter 11

By Jane Yager,  Newser Staff
Posted Aug 17, 2009 2:00 PM CDT
A cover of Reader's Digest, whose parent company plans to file for Chapter 11 bankruptcy.   (PRNewsFoto/Reader's Digest)
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(Newser) – The latest media company to groan under debt in the current recession, Reader's Digest Association, yesterday announced plans to file for Chapter 11 bankruptcy. The publisher insists that "business as usual" will continue for its publications and employees, with no mass layoffs in store as the company slashes its debt load from $2.2 billion to $550 million, Reuters reports.

The company's flagship publication, doctor's office staple Reader's Digest, claims to be the world's largest-selling magazine, but the pre-arranged filing comes as little surprise to media observers. Reader's Digest, hit hard by shrinking ad revenues, has been struggling to cut costs since its 2007 purchase by an investor group led by Ripplewood Holdings.