RDA postpones UK Restructuring Timing
Pleasantville, NY: Reader Digest Association (“RDA”) has said that it has elected to temporarily delay its emergence from Chapter 11 to address an issue involving the pension program of The Reader’s Digest Association, Ltd., the company’s UK entity. This issue is specific to the UK entity and does not involve any other RDA company. RDA’s restructuring plan was confirmed by the United States Bankruptcy Court for the Southern District of New York on January 15, 2010, enabling the company to choose its date for emergence. RDA expects to emerge within the next few weeks.
Last month, the UK entity came to an agreement with the trustees of its pension plan and the UK Pension Protection Fund (PPF) 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. In light of this unexpected ruling, the UK entity is now reviewing its options in an attempt to find a solution.