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Reader's Digest falls into administration 22 February 2010

The demise of the UK publisher and magazine threatens 117 jobs at the company’s offices in London and Swindon.

The filing follows weeks of negotiations with the pensions regulator after its American parent company, Reader’s Digest Association said it was no longer able to support the British edition.

Reader's Digest Association had agreed a deal with the Pension Protection Fund to pay off a small part of its £125m pension deficit and take an equity stake in the UK business, but the regulator vetoed the agreement.

As an agreement could not be reached, the UK publisher said it would not be able to meet its pension obligations and so could not sustain operations.

Joint administrators, Phillip Sykes, Jeremy Willmont and Bill Beach of Moore Stephens said the UK magazine, which has more than 540,000 subscribers, will continue to trade while a buyer is sought.

But Moore Stephen’s said that the magazines famed prize draws may be axed: "Last week’s prize draw took place as scheduled. The winners will be paid as the prize fund was held in trust. We will be reviewing the arrangements for future draws."

Reader’s Digest Association itself filed for US Chapter 11 bankruptcy protection last year after struggling with interest payments on a $2.2bn (£1.4bn) debt. It said that the isolation of the British unit would now allow it to emerge from Chapter 11 promptly.

 

 

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