The company that publishes Reader's Digest said Monday it has hit a snag with its reorganization plan that will delay its exit from bankruptcy court.
Reader's Digest Association Inc. said regulators in the U.K. will not approve its plan to settle pension costs there. The company had reached a deal to retire a $180 million obligation of a British subsidiary in exchange for a $17.6 million cash payment and giving up a one-third stake in the business.
Reader's Digest said it is reviewing its options after the ruling but it still expects to emerge from bankruptcy protection in the next few weeks.
A judge in the U.S. Bankruptcy Court for the Southern District of New York has already approved the company's Chapter 11 plan, which cuts its debt load to $555 million from $2.2 billion. The company expected to emerge from Chapter 11 by the end of January, with its lenders taking ownership.
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