Reader's Digest, publisher of the monthly magazine which claims the largest circulation in the world, filed for bankruptcy protection on Monday in an agreement with its major lenders.
Reader's Digest Association said that as part of its previously announced restructuring plan it had filed for Chapter 11 bankruptcy, which protects a company from its creditors while it restructures.
It said the Chapter 11 filing only applies to its US businesses and not its operations in other countries.
Reader's Digest said last week that the restructuring agreement calls for a "substantial portion" of its 1.6 billion dollars in debt to be swapped for equity and ownership of the company to be transferred to the lender group.
A total of 550 million dollars in debt will remain on Readers's Digest's books when it emerges from bankruptcy.