Image by sono salvo via FlickrReader's Digest, founded in 1922 by Lila Bell and DeWitt Wallace, will submit a voluntary pre-packaged Chapter 11 filing in U.S. Bankruptcy Court under a restructuring agreement with its principal lenders.
The bankruptcy move is intended to reduce the publication's debt to $550 million from $2.2 billion. The entire Reader's Digest Association's board of directors, except for CEO Mary Berner, has resigned.
The Pleasantville, N.Y.-based publication's senior lenders include GE Capital, JP Morgan and Bank of America. In 2005, the magazine adopted the slogan: "America in your pocket." Now the magazine's pockets are empty. It would be fitting if the magazine underwent a "condensed" bankruptcy.