Reader's Digest parent's second amended reorganization plan confirmed

By Jim Witters

Wilmington, Del., June 28 - RDA Holding Co.'s second amended joint plan of reorganization was confirmed during a June 28 hearing in the U.S. Bankruptcy Court for the Southern District of New York, according to the attorney for the debtor, which is the parent company of the Reader's Digest Association, Inc.

Joseph Smolinsky said the "targeted dated for emergence is on or before July 31."

The plan was amended in May to adjust the treatment of unsecured creditors.

Creditor treatment

Treatment of creditors under the confirmed plan includes:

• Priority claims will be paid in full in cash;

• Other secured claims will either be paid in full in cash or holders will receive the collateral securing their claims;

• Holders of senior noteholder secured claims will receive a share of 100% of the new common stock in the reorganized company;

• Holders of all sub-classes of general unsecured claims will receive a share of a $500,000 general unsecured creditor cash distribution if they vote to accept the plan, and holders of general unsecured claims against Reader's Digest will also receive a share of a $3.88 million distribution if they vote to accept the plan.

Holders of general unsecured claims in sub-classes that do not accept the plan will receive no distribution. The distribution earmarked for those sub-classes will go to claimants in accepting sub-classes. If holders of general unsecured claims against Reader's Digest vote to reject the plan, there will be no Reader's Digest general unsecured claim distribution;

• Plan debtor intercompany claims will be either reinstated or compromised; and

• Existing RDA Holding interests will be cancelled, and holders will receive no distribution.

Reader's Digest, a subsidiary of RDA Holding Co., is a media and direct marketing company based in New York. The company filed for bankruptcy on Feb. 17 under Chapter 11 case number 13-22233.

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