Reader's Digest was acquired in a leveraged buyout in 2007 by the private equity firm of Ripplewood Holdings for $1.6 billion. Ripplewood Holdings' investment is now wiped out and its lenders, JP Morgan Chase and Company, will take control of the company.

Reader's Digest, with headquarters in Pleasantville, New York, has had a storied history since it began publishing the pocket-sized magazine in the early 1920s. At its peak the magazine sold 18 million copies, which were translated into several foreign languages.

Like other US publications hit hard by the worsening economy in past years, Reader's Digest has faced circulation declines as readers switched to special interest publications.