Reader's Digest Bankruptcy Proceedings Moving Fast: Gets Approval From Lenders
Thursday, August 20, 2009; 3:29 PM
Reader's Digest is serious about getting out of Ch 11 bankruptcy fast: it has secured approval of about 80 percent of its senior secured debt holders. This means that these lenders will exchange a substantial portion of RD's $1.6 billion in senior secured debt for equity and will reduce the company's total debt by 75 percent, from approximately $2.2 billion to $550 million. Expect them to come out on the other side soon. Meanwhile, Folio highlights changes in CEO and CFO salary as a result of the bankruptcy: During the Chapter 11 process, Mary Berner will be paid $125K per month in base salary, while CFO Tom Williams will receive $68,200 per month, which means BErner will get $1.5 million in annual salary. This compared to Berner's package in fiscal 2008 where she earned a base salary of $600,000 and a guaranteed annual bonus of $500,000, plus performance incentive bonuses.