This past spring, with barely a year between it and bankruptcy, RDA Holding Co. appeared to be back on track.

The 89-year-old media company had moved into Manhattan from a Chappaqua, N.Y., campus that, for the better part of seven decades, served as the headquarters of Reader's Digest Association Inc. Its post-bankruptcy board seemed amply along the learning curve for direct marketing, an RDA specialty that even a long-time executive regards "as arcane as anything in business gets." And management, headed by president and CEO Mary Berner and flanked by CFO Tom Williams, was not only refocused on operations but working from the same page.

The problem was six hedge funds, including distressed-asset investors Alden Global Capital and Point Lobos Capital LLC, were also working from the same page. It was page 4, to be precise, of RDA's amended and restated bylaws. Therein, according to one such bylaw, "any director or the entire board may be removed, with or without cause, at any time by the holders of a majority of the shares then entitled to vote."

What's more, the hedge funds were putting the bylaw to use. Although they collectively owned only 31.64% of the vote, they drummed up enough "written consents" from other shareholders to obtain the majority necessary to replace RDA's board.

The hedge funds delivered their consents to RDA on April 18, forcing the resignation of seven of the company's eight directors. The only director to survive the coup, which took place without so much as a proxy fight or even a special meeting, was Berner. A week later, however, she, too, was gone.

Referring to the exodus of directors as a "board transition," a release put out by RDA on April 25 quoted Berner as saying, "This was a natural point to move on." Then, in a nod to the CFO picked to succeed her, she expressed confidence the company remained in "capable hands."

While that may be true, Berner also left a company whose new headquarters on Third Avenue at 46th Street "suddenly got very quiet," says a source with first-hand knowledge.

This quiet was especially noteworthy in light of what RDA workers had already endured. "There'd been an erosion of the business for about 20 years, followed by the extreme pressure of Chapter 11," the source explains. "But as resilient as they were, they were shell-shocked all the same."

So were Manhattan's media and marketing communities. RDA may be known from afar for the pocket-sized magazine that's still of interest and service to grandparents the world over. But those closer to the company consider its future more dependent on top-ranked food site Allrecipes.com, on the AB Circle Pro and other fitness products so expertly marketed by RDA's Direct Entertainment Media Group Inc., and on the integration of recently relaunched monthly Every Day with Rachael Ray with the celebrity chef's daytime television show.

As Berner herself reminded analysts during a March 3 earnings call, having no idea it would be her last: "We engage in all of the digital activity that other media companies pursue. Apps? We have 31 mobile apps in the U.S. alone."

This message from the president and CEO, who had been plucked from Fair­child Publications Inc. in 2007 to lead the company as a newly privatized enterprise, couldn't have been clearer: RDA, once a laggard, was catching up fast. And though public comments have not been forthcoming from any of the hedge fund managers who instigated the insurrection, one so complete as to constitute a "change of control," the message of their collective action was no less clear: RDA, still a laggard, wasn't catching up fast enough.

Many were stunned that any company, particularly one that's privately held, could so swiftly be stripped of its autonomy. But in the case of RDA, the real irony was in the timing. The opulent Reader's Digest of yore -- the one run by beneficent founders De­Witt and Lila Wallace, known for free turkeys to staff at Thanksgiving, spontaneous distributions of cash throughout the year and a corporate art collection encompassing Monet, Renoir and Picasso -- had started to fade before the company went public in 1990. And it was long over when, in March 2007, an investor group led by New York private equity firm Ripplewood Holdings LLC took RDA private again for $2.4 billion.

Ripplewood's take-private transaction proved ill-timed, as it saddled RDA with $2.2 billion in debt just before the financial crisis hit. Credit-rating downgrades ensued, culminating with RDA's bankruptcy petition on Aug. 24, 2009. On Feb. 22, 2010, after six months of Chapter 11 protection, the company emerged in fighting trim: Its debt of $2.2 billion had been slashed by 75% to $550 million, wiping out Ripplewood and other equity investors in the process, whereas its leverage ratio ended the first quarter of 2010 at a manageable 3 times Ebitda.

"We expect that the industry and competitive environment will continue to be demanding," Berner said on the occasion of the bankruptcy exit, "but we have the right team, the right model and relevant brands that engage today's consumer."

Most qualified observers do, in fact, credit Berner for pursuing the right model. It's called, in RDA-speak, a multiplatform affinity model of powerful brands. But in operating terms, the long-time RDA executive translates it to mean, "building out our affinity clusters to drive future growth while using our direct-marketing businesses as a cash cow."

One affinity cluster, Food & Entertaining, houses such brands as Allrecipes, Every Day with Rachael Ray and the Taste of Home lines. Another, Home & Garden/Do-It-Yourself, comprises Birds & Blooms, Country, the Family Handyman, Farm & Ranch Living and freshHome. A third affinity is the so-called Reader's Digest Community, which remains home not only to the world's most widely read magazine but also to Reader's Digest-branded books, music, video websites, digital newsletters, mobile applications and special-interest publications.

The direct-marketing line, the cash-cow part of the equation, leverages RDA's peerless direct-marketing and database skills to sell brands either owned by the company or developed by third parties. Its six reportable segments -- U.S., Europe, Canada, Asia Pacific and Latin America, Lifestyle & Entertainment Direct and Other -- accounted for nearly two-thirds of the $1.8 billion in revenue recorded by RDA for 2010.

The company's post-bankruptcy mission included cleaned-up budgets as well as a cleaned-up model. Cost savings initiated during bankruptcy are expected to total $34 million in 2011, as are overhead reductions secured in June 2010. These cutbacks combined, at $68 million, represent a significant chunk of the $175 million to $185 million in consolidated Ebitda that RDA expects to report for all of 2011.

Calendar 2010 wasn't bad, either. A pre- and post-bankrupt RDA generated pro forma free cash flow of $86 million, more than enough to fund $43.3 million in share repurchases. These repurchases, achieved through a dutch auction that expired early this year, retired 1.5 million RDA shares at $29 apiece.

That the retired shares accounted for 5.4% of the total conferred a market capitalization on RDA of $800 million. It also indicated an enterprise value of $1.2 billion -- half of what Ripplewood paid for RDA less than a half-decade ago -- after both the addition of $500 million or so of debt that RDA had on its books at the end of the first quarter and the subtraction of almost $100 million in cash.

But that's just one way of looking at the company's value. Another way might be to compare the 535 million annual visits that RDA's Allrecipes receives at its 16 international sites with, say, the 100 million users that LinkedIn Corp. has registered in 200 countries. It's a rough comparison, to be sure, but it could hint at unlocked value if further compared with the $4.3 billion valuation commanded by LinkedIn during its initial public offering two months ago. Moreover, the market rout notwithstanding, LinkedIn's market cap today stands comfortably above $5 billion.

One can't say with certainty that comparisons with LinkedIn or other new-media properties sprinkled with pixie dust are what motivated Alden Global and Point Lobos Capital to join forces with fellow funds Blackwell Partners LLC, Gam Equity Six Inc., Luxor Capital Partners LP and OC 19 Master Fund LP. But a member of a firm that actually trades RDA shares, a permissible activity even though the issuing company is technically private, says the funds' concerted accumulation of the stock was "by design." He also speculates why Berner told the press her "vision is different" on her departure a week after RDA's post-bankruptcy board had been purged: "Best guess is she said 'no' after the hedge funds came in and told her to break things up."

A prominent media banker, who in this case asked not to be named, thinks such a breakup is already a fait accompli.

"Allrecipes is worth a lot more outside of RDA," he says, citing as potential suitors Scripps Networks Interactive Inc. (with its Food Network and Cooking Channel), Meredith Corp. (with its recently acquired EatingWell Media Group), food conglomerates such as Kraft Foods Inc. and General Mills Inc. or, for that matter, any number of established Internet players in search of more traffic. "Get one of those to buy it for an aggressive price, and you still have two or three pieces that would appeal to private equity."

Others agree there are "several ways to cut it," to continue quoting the banker. And it's an open secret that Evercore Partners Inc. and Morgan Stanley have been retained to explore doing just that.

As for the stealth-like characters who emerged from nowhere to shake up RDA's board, and who aren't likely to stop until they shake free one or more of its divisions, the banker searches for the right word a bit before settling on emotionless.

"Let's just say they're not the kind of guys who sit around focusing on what Reader's Digest should be doing for its 90th anniversary," he elaborates.

Still, in fairness to the post-bankruptcy board and the leadership team that these hedgies so unceremoniously dismantled, they weren't those kind of guys, either.