It looks like it will be a little while longer before the Reader’s Digest Association is out of bankruptcy court.
Although the Reader’s Digest publisher had planned to emerge from Chapter 11 today, the company said this morning that it was delaying, “to address an issue” dealing the pension plan at its U.K. division the Reader’s Digest Association, Ltd.
“Last month, the U.K. entity came to an agreement with the trustees of its pension plan and the U.K. Pension Protection Fund (PPF) to resolve the company’s U.K. pension fund deficit,” the company explained. “This agreement was contingent on approval from the U.K. Pensions Regulator, which has now indicated that it will not approve the pension application. In light of this unexpected ruling, the U.K. entity is now reviewing its options in an attempt to find a solution.”
This problem doesn’t affect any of RDA’s U.S. holdings, the company added, and RDA should be out of Chapter 11 in a few weeks.
RDA entered bankruptcy in August, in an effort to reduce its $2.2 billion in debt to $550 million through a pre-packaged plan.