A federal court judge, ignoring last-minute requests to keep the previously secret information under seal, has released data that indicates the closely held company which publishes Reader's Digest, had a net worth a year-and-a-half ago of $325 million.
The information was included in a brief prepared by U.S. District Judge James L. Latchum, who last week fined Reader's Digest Association Inc. $1.75 million for violating a six-year-old federal order that barred the magazine from distributing simulated certificates and checks to potential subscribers.
The order was signed by the company with the Federal Trade Commission in early 1972 after the commission found that in connection with promotional mailings Reader's Digest had mailed almost 14 million such documents, which the FTC felt had misled recipients into believing they had won a prize or something of value.
But, in subsequent years, more than 17 million similar mailings had been sent out, the Justice Department and the FTC told the court.
In reaching a decision on the penalty, however, Latchum used Reader's Digest financial information obtained at the government's request, but placed under protective order. Despite a last-minute letter from company attorneys, Latchum used the data as evidence that the company could afford the $1.75 million penalty. Unless the fine is overturned on appeal, it would be the largest ever for violations of a similar order.
A Reader's Digest spokesman would not comment on the financial data, which indicates the company had after-tax mean profits for the 1976-to-1978 period of more than $37 million and thatits gross revenues for the same period exceeded $475 million. Latchum reported that the company's retained earnings exceeded $70 as of Dec. 31, 1978.
An official of the Pleasantville, N.Y. company did say it "strongly disagrees" with the decision and both the decision and the fine are "entirely inappropriate." The company said it would appeal the case to the U.S. Court of Appeals.