RDA Holding Co., publisher of Reader’s Digest magazine, won interim court approval to borrow $11 million while it restructures in bankruptcy.
U.S. Bankruptcy Judge Robert Drain approved the interim financing at a hearing today in White Plains, New York. The company will return to court to seek approval of the remainder of the $45 million loan arranged by Wells Fargo Principal Lending LLC as administrative agent.
The company filed for bankruptcy protection Feb. 17 after reaching an accord with its secured lender and more than 70 percent of its secured noteholders. Under the restructuring agreement, RDA will convert $465 million of remaining senior notes to equity.
Reader’s Digest, founded by DeWitt and Lila Wallace, went public in 1990. An investor group led by private-equity firm Ripplewood Holdings LLC bought it in 2007 for $1.6 billion and the assumption of about $800 million in debt. The company also filed for bankruptcy in August 2009, citing a drop in advertising spending and the debt load incurred in its acquisition.
The case is In re RDA Holding Co. Inc., 13-22233, U.S. Bankruptcy Court, Southern District of New York (White Plains). The previous bankruptcy was In Re Reader’s Digest Association Inc., 09-23529, U.S. Bankruptcy Court, Southern District of New York (White Plains).