The pending appointment, which was announced yesterday (Wednesday, 17 February), comes as a deal to help bail out the company's £125m pension deficit fell through, an issue that the Reader's Digest Association (RDA) blamed on the UK Pensions Regulator.

The business had previously reached an agreement with the trustees of the fund to pay £10.9m in cash and one third of its shares to fill the deficit and transfer the scheme to the Pensions Protection Fund. However, this deal was rejected by the UK Pensions Regulator.

In a statement to employees, Mary Berner, president and chief executive of the Reader's Digest Association, said: "The pension problem in the UK was unique and of longstanding origin, going back many years."

She added: "In a move that, as far as we know, was unprecedented, the UK Pensions Regulator let us know two weeks ago that he would not approve the settlement. 

"Without this expected relief, and given the very significant outstanding liabilities, RDA UK is essentially insolvent."

According to Berner, the UK company will be directly under the control of administrators who will manage it "in the best interests of the UK company’s creditors".

The possible outcomes for RDA UK are a sale as a going concern, licensing of the brand, or an orderly wind-down of the business.

Reader's Digest has a UK presence in London and Swindon, however, the title is printed by French printer Maury Imprimeur with repro done by north London-based FMG.

FMG executive director George Berg said: "RDA UK represents only a fraction of our overall Digest portfolio worldwide, and as such, our position as a major supplier of data management services to Reader's Digest is largely unaffected."

Less than three years ago, Williams Lea landed the contract to manage Reader's Digest's "more than $1bn" worldwide print budget in a business process outsourcing deal of a scale "never seen before".

As a result of RDA UK's administration, The Reader's Digest Association, which filed for Chapter 11 in August 2009, will soon emerge from bankruptcy protection.

Berner added: "This is not the outcome we hoped for or worked towards, but it does constitute a resolution of the issue that had delayed RDA’s emergence from Chapter 11. 

"From this point, emergence is expected to follow promptly, probably within about a week."