Reader's Digest delays exit from bankruptcy

NEW YORK: The publisher of one of the world's most widely-circulated magazines Reader's Digest has decided to postpone its exit from bankruptcy protection.

The Reader's Digest Association's (RDA) move is due to problems regarding the company's pension programme specific to its British entity.

"The RDA has elected to temporarily delay its emergence from Chapter 11 to address an issue involving the pension programme of The Reader's Digest Association, the company's British entity," the firm said in a statement today.

The publisher, whose Reader's Digest magazine is sold in many countries including India, filed for Chapter 11 protection in the US late last year. Chapter 11 allows the concerned company to reorganise itself during the time of bankruptcy.

Paving the way for its exit from bankruptcy, the restructuring plan was confirmed by the US bankruptcy court for the southern district of New York on January 15, 2010.

"RDA expects to emerge within the next few weeks," it added. According to the company, the issue of pension programme is only related to its British arm.

In January, the British entity reached an agreement with the trustees of its pension plan and the UK Pension Protection Fund to resolve the company's UK pension fund deficit. "This agreement was contingent on approval from the UK Pensions Regulator, which has now indicated that it will not approve the pension application," it noted.