Reader's Digest to file Chapter 11

NEW YORK Reader's Digest Association Inc. said it has reached an agreement with a majority of secured lenders to restructure its debt. Under the plan, the lenders get ownership of the company and will erase much of the $1.6 billion they have in senior secured notes.

The monthly magazine, founded in 1922 as a collection of condensed articles from other publications, has been searching for a niche as the Internet upends the magazine industry's traditional business models.

This year, it cut the circulation guarantee it makes to advertisers to 5.5 million, from 8 million and lowered its frequency to 10 annual issues from 12.

The magazine was bought by the New York private equity firm Ripplewood Holdings in 2007.

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