RDA Holding Co., parent company of The Reader's Digest Association, Inc., announced that it has obtained U.S. Court approval of a variety of motions that will support the company's operations as it proceeds with a financial restructuring supported by its secured lender and more than 70% of its secured noteholders.

U.S. Bankruptcy Judge Robert Drain approved the company's $105 million debtor-in-possession financing, $11 million of which will be available immediately, on an interim basis under an agreement with a group of the company's secured creditors. The financing will be used in conjunction with cash generated from operations to support the company throughout the Chapter 11 process. A hearing to consider final approval of the request will convene next month.

"The relief granted is an important initial milestone in our restructuring process," said Robert E. Guth , the company's president and chief executive officer. "We are very confident that the protections afforded us through this process, when combined with the momentum we already have in our operational transformation, will allow us to create a vibrant and strong Reader's Digest for the future."

In addition to the approval to obtain financing, the company received approval of a variety of motions, including requests to continue paying employees and its network of freelancers without interruption and its request to continue all of its customer programs, including payments to sweepstakes winners.

As previously reported, the company has executed a Restructuring Support Agreement with its secured lender and its secured noteholders. The agreement will result in, among other things, the company converting approximately $465 million of secured notes to equity, which will strengthen the company by significantly deleveraging its balance sheet. It is currently anticipated that the company will exit Chapter 11 within six months with roughly $100 million of debt, about an 80% reduction in its level of indebtedness.