On Friday a federal bankruptcy court approved Readers Digest’s reorganization plan for exiting bankruptcy. The plan reduces over $2.2 billion in debt down to about $555 million, wiping out private equity owners Ripplewood Holdings in the process. Senior lenders will hold all of the equity in the publishing company, while bondholders owed over $600 million will just get warrants, “an offer that practically wipes them out” according to the WSJ. A group of company retirees had challenged the plan unsuccessfully in court. While many retiree benefits remain protected, the dissenters “constitute a subset of retirees that receive supplemental pension benefits” […]
