Reader's Digest Association Inc., publisher of the country's most popular general interest magazine, says it will file for Chapter 11 protection.
It says it has reached an agreement with a majority of secured lenders to restructure its debt. Under the plan, the lenders will exchange $1.6 billion worth of senior secured notes for ownership of the company.
Reader's Digest has been hobbled by declining circulation, an industrywide advertising slump and large debts.
The monthly magazine, founded in 1922 as a collection of condensed articles from other publications, has been searching for a niche as the Internet upends the magazine industry's traditional business models.