Some well known names have emerged in the Reader’s Digest Association bankruptcy, ranging from law firms to printing companies.
According to documents filed yesterday in connection with RDA’s Chapter 11 filing, BONY Mellon, as a bondholder trustee, is owed about $600 million. That’s followed by Indian information-technology company HCL, which is owed $14.2 million, and by Williams Lea, a London-based print promotion specialist, which is owed $8.9 million.
In all, according to the filing, RDA is listing total liabilities of $3.4 billion against assets of $2.2 billion. The bankruptcy only affects RDA’s US operations, and 1,500 out of 3,000 employees.
The company’s first formal hearing is scheduled for today.
The biggest winners appear to be the many bankers, lawyers and consultants who will be paid a whopping $3.96 million a week over the next month, according to the filing.
As usual in these cases, printers are left holding the bag for a lot of the debt, with Quad Graphics, R.R. Donnelley and Quebecor World among the top 10 unsecured creditors, each owed between $2.3 million and $3 million. A subsidiary of Time Inc. is owed $2.6 million.
Under terms of the pre-packaged Chapter 11 filing, RDA’s senior lenders will convert $1.6 billion of their nearly $2.2 billion in debt for stock. JPMorgan Chase will lead a lending group that will still be owed about $550 million after the restructuring. The group has also pledged to put in another $150 million in debtor-in-possession financing.