Reader's Digest delays emergence to clear up U.K. unit pension issue

By Caroline Salls

Pittsburgh, Feb. 1 - Reader's Digest Association, Inc. has elected to temporarily delay its emergence from Chapter 11 bankruptcy to address an issue involving the pension program of U.K. entity The Reader's Digest Association, Ltd., according to a company news release.

Reader's Digest said it expects to emerge from bankruptcy within the next few weeks.

The company said the issue is specific to the U.K. entity and does not involve any other Reader's Digest company.

According to the release, the U.K. entity came to an agreement with the trustees of its pension plan and the U.K. Pension Protection Fund last month to resolve a pension fund deficit.

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, Reader's Digest said the U.K. entity is now reviewing its options in an attempt to find a solution.

As previously reported, Reader's Digest's plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on Jan. 15.

Reader's Digest, a Pleasantville, N.Y., publishing company, filed for bankruptcy on Aug. 24. Its Chapter 11 case number is 09-23529.

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