Reader's Digest parent company RDA Holding announced Sunday that it has reached an agreement with its secured lender and more than 70% of its secured noteholders to implement a financial restructuring.

Pursuant to this agreement, RDA has filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the Southern District of New York. According to a press release, the filing covers only RDA's U.S. business, and not its international operations. The company expects to remain under bankruptcy protection for less than six months.

Simultaneously with the filing, RDA entered into an agreement with its secured lender and its secured noteholders, pursuant to which $465 million of the company's secured debt will be converted into equity (owned by the lenders). This will permit the company to emerge from bankruptcy with 80% of its debt extinguished, and only $100 million remaining, the company said.

RDA's lenders have agreed to give the company up to $45 million in new financing to keep it in business during the period of restructuring. Thus, the company says, its Chapter 11 filing "is not expected to impact the Company's day-to-day operations. Reader's Digest will continue to publish throughout the process. Furthermore, it says its pension plan "remains overfunded and will continue to be used to support its retirees."

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