The British division of Reader's Digest has collapsed into administration, six months after its US parent group filed for Chapter 11 bankruptcy, administrators have said.
"On 17 February 2010, Phillip Sykes, Jeremy Willmont and Bill Beach of Moore Stephens were appointed joint administrators to The Reader's Digest Association Limited, a UK subsidiary of The Reader's Digest Association," Moore Stephens said in a statement.
Administration is the process whereby a troubled company calls upon independent expert financial help in a bid to remain operational.
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"The joint administrators are reviewing Reader's Digest's financial position and intend to continue RDA UK's trading activities, while seeking a buyer for the business," they added.
"As a result of the company's current financial position, the directors resolved to apply for an order to place the company into administration."
The British version of Reader's Digest dates back to 1938 and has offices in Canary Wharf, east London, and in Swindon in southern England. It employs just 117 people.
In a separate statement issued in the United States, parent group RDA said its British division filed for administration after failing to win British regulatory support for a deal over its pension scheme funding.
In August 2009, RDA had filed for Chapter 11 bankruptcy, which protects a company from its creditors while it restructures.
RDA had announced earlier this month that it would delay emergence from Chapter 11 to address the UK pension issue.
However, it added on Wednesday: "In light of the recent action taken by RDA UK to file for administration, parent RDA expects to emerge from Chapter 11 promptly."
The Pleasantville, New York-based Reader's Digest was purchased by Ripplewood Holdings in March 2007. It publishes 94 magazines, including 50 editions of Reader's Digest.
