Cost-cutting MNG reaches deal to buy bankrupt Reading Eagle
MNG Enterprises, after losing its $1.36 billion bid to stage a hostile takeover of Gannett, this week got a consolation prize when it reached a deal to pay $5 million to acquire the Reading Eagle out of Chapter 11 bankruptcy.
According to a WARN (Worker Adjustment and Retaining Notification) notice filed with the Pennsylvania Department of Labor, all 221 employees will be laid off. Workers are not expected to receive any severance beyond the 60-day requirement by the state.
The family-owned business, headed by Chairman Peter Barbey, put the company into Chapter 11 in March. He did not return a call.
Some of the staffers will be rehired by MNG, which also goes by the name Digital First Media, and is owned by controversial, cost-slashing hedge fund Alden Global Capital, headed by Heath Freeman.
“We don’t know how many people will be retained,” said Sara April at Dirks, Van Essen, Murray & April, which handled the sale for the sellers
MNG, which has made deep cuts at such papers as the Boston Herald and the Denver Post, was mum on the size of the new staff planned in Reading. “As the lone qualified bidder, MNG is pleased to save the Reading Eagle from liquidation and help ensure the people of Berks County don’t lose access to an important source of local news,” the company said.
