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BREAKING NEWS & VIEWS
RDA to Seek Chapter 11 Bankruptcy Protection; 'Business as Usual,' Says Berner RDA made what is called "a prearranged filing under Chapter 11 of the U.S. Bankruptcy Code" in order to get a 30-day grace  period on a $27 million interest payment to investors—led by Ripplewood Holdings—that was due today.In addressing the staff, Berner called the situation "strictly a balance-sheet issue" that will have zero effect on day-to-day operations. "There will be no fire sales, no mass layoffs, no cuts in salaries," she said. "This was strictly a consensual deal to lower our debt and ensure the future financial health of the company." She called the procedure similar to those of Macy's and Texaco—two companies that emerged from bankruptcy stronger—though they now have different corporate names: Macy's is owned by Federated; Texaco, by Chevron. Berner said that the RDA financial restructuring will be completed between 30 days and year-end, with fiscal 2009 revenues (ending December 31) projected to be -2%. Berner remains on the privately held RDA board of directors, but Ripplewood executives are out. The new board is expected to be comprised of executives from investors Bank of America, JP Morgan and GE Capital. RDA's international businesses (50 Reader's Digest editions outside of the U.S.) are not affected. If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com COMMENTS
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