Hard to swallow: Chapter 11 for iconic mag

ICONIC magazine Reader’s Digest is facing bankruptcy as it strives to tackle debts of over US$2 billion.

Bloomberg reports Reader’s Digest Association Inc. will likely file a Chapter 11 to reduce the debt by 75 percent by giving creditors a share in the business. The move would only affect the US operations of Reader’s Digest.

In a similar case to the Tribune Co., owner of the Chicago Tribune, the publisher underwent a leveraged buyout two years ago that burdened it with a heavy debt. As advertising revenue dropped, the debt became unmanageable.

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