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Reader's Digest files prearranged bankruptcy

The publisher of Reader's Digest yesterday filed for Chapter 11 bankruptcy protection, carrying out its plan to cut debt and transfer ownership of the 87-year-old U.S. magazine and other businesses to a group of lenders. The company, named for its general-interest magazine packed with family friendly humour and inspirational stories, said earlier this month that its U.S. units would file for bankruptcy as part of a prearranged plan with lenders to slash debt of $2.2-billion (U.S.) by 75 per cent. The corporation, which publishes 50 editions of Reader's Digest and 44 other magazines including household hints publication Every Day with Rachael Ray, said it planned to continue operations as usual.

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