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The amount was the minimum set for the purchase.
Reading, PA –
MediaNews Group has offered the minimum bid to buy the assets of Reading Eagle Company, a bankrupt company, and plans to close the WEEU 830 AM radio station once the deal is finalized, according to court documents filed Tuesday.
An asset purchase agreement filed in the Federal Bankruptcy Court, which was discussed at a hearing this morning and is expected to be approved by Judge Richard E. Fehling this afternoon, shows that MediaNews Group will pay $ 5 million for the assets of the company, which filed bankruptcy protection in March. The documents indicate that a closing date will be set no earlier than 30 days after the approval of the agreement by the court and no later than 31 July.
The lawyers at Reading Eagle Company said at Wednesday's hearing that there were only two options: to sell to the MediaNews group or shut down the entire company.
"Everything happens in a context," said lead counsel Robert Lapowsky. "Either we are going to have a sale, or we are going to have a liquidation."
Representatives of MediaNews Group could not be contacted immediately for comment on Wednesday.
At least five days before the closing date of the sale, MediaNews Group will inform the employees who will be retained and the conditions of their employment, according to the documents of the court. Employees not retained by MediaNews Group will not receive severance pay.
According to the documents, members of four unions representing 39 employees working in production and distribution will probably not be among those selected. They state that MediaNews Group will not assume the six collective bargaining agreements that these unions have with Reading Eagle Company.
Two of the unions, GCIU Local 14M and GCIU Local 4C, had agreed before Wednesday's hearing to amend their four agreements, eliminating wording that required a company buyer to comply. collective agreements. The other two unions, Teamsters Local 429 and Communication Workers of America Local 14827, had their contracts dismissed by a warrant.
The lawyers at Reading Eagle Company will submit an updated written order this afternoon, which Fehling has promised to sign.
At Wednesday's hearing, few objections were expressed about the motion to remove the two union contracts, with the exception of the appellant moving as unfair.
Lawyer Jessica R. Brown, representing Teamsters Local 429, said unionized employees are treated differently than non-union employees. She said the union's employees would all lose their job as part of the sale to MediaNews Group, while many non-union jobs would be saved.
"So you prefer everyone to be laid off?" Fehling asked him.
Brown, who was on the phone, did not answer.
Lapowski had argued that without the rejection of union contracts, a sale to MediaNews Group would not be possible. And, as he said earlier, that would mean liquidation of the company.
Fehling accepted his disastrous account of the situation.
"I am not comfortable refusing a collective agreement willy-nilly," he said. "But it's an all-or-nothing proposition."
Unions are not the only elements of the business to disappear as part of the sale. According to the documentation, as of the closing date, WEEU will no longer be released.
The court documents indicate that Reading Eagle Company will attempt to sell the FCC license of the radio station. If it is purchased, the buyer will be able to use the tower, antenna and WEEU transmitter for five years or until the MediaNews group sells them, according to the first possibility.
Reading Eagle Company includes the Reading Eagle Companies, WEEU 830 AM, the weekly South Schuylkill News, Pretzel City Productions and its commercial printing subsidiary, REP. The company has 234 employees.
The company filed an application for bankruptcy protection on March 20, citing an unsustainable financial situation. The company went on sale and MediaNews Group was the only group to submit a qualified offer by May 15th.
MediaNews Group, which operates more than 50 dailies in the United States, is majority-owned by the New York-based hedge fund Alden Global Capital.
At Wednesday's hearing, Sara April, of Dirks, Van Essen, Murray & April, a company hired by Reading Eagle Company to participate in the sale, briefly mentioned a second offer received.
According to April, the other offer did not yet have adequate funding, which made it unskilled. She did not name the other bidder.
April said that it was not clear if the second bidder would eventually be able to secure adequate funding, but that he certainly could not do it before the company was run out of money and be forced to close.
RE Purchase Agreement by Reading_Eagle on Scribd
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