Objections to the Reader's Digest Association's Chapter 11 bankruptcy plan by a pension trustee were dropped after wording was added to the reorganization plan concerning the pension scheme's unfunded status, according to William Adler, Readers Digest spokesman.
The British pension trustee withdrew its objection to Reader's Digest reorganization plan after wording was included in the plan that reserves the right of the trustee to contest the discharge of its claims against Readers Digest.
The reorganization plan now states that Readers Digest executives do not think the company has any pension plan liability but that the U.K. pension scheme does because the plan is “severely underfunded.” The proposed plan now states that as of March 31, the pension scheme was $181.9 million unfunded, up from $104.3 million on June 30, 2008, and that the deficit has increased even further since March and U.K. regulators are investigating whether to seek contributions from Reader's Digest.
Now that the objection and others have been dropped, Reader's Digest expects U.S. Bankruptcy Court Judge Robert Drain in White Plains, N.Y., to approve the plan.
