LIBERTY GROUP HOLDINGS INC
8-K, 2000-09-29
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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K



                                 CURRENT REPORT



                         Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934



                               September 15, 2000
                                 Date of Report
                        (Date of earliest event reported)



                          LIBERTY GROUP HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)



       Delaware                   0-9201                        59-3453151
    ---------------            -----------               --------------------
    (State or other            (Commission                (IRS Employer
    jurisdiction of            File Number)               Identification No.)
     incorporation)


                    11 52nd Street, Brooklyn, New York, 11232
              (Address of registrant's principal executive offices)



                                 (718) 492-1200
              (Registrant's telephone number, including area code)






<PAGE>
Item 5.  Other Events


         On September 15, 2000 Liberty Processing & Distribution, Inc. ("LP&D"),
a wholly-owned subsidiary of Liberty Group Holdings, Inc. ("LGHI"), entered into
a  Stock  Purchase  Agreement   ("Agreement")  with  Philadelphia   Foods,  Inc.
("Philadelphia")  and Marvin Raab,  Philadelphia's sole stockholder  ("Seller"),
pursuant to which LP&D agreed to purchase all of the stock of Philadelphia  from
the Seller. The consideration for the stock is $8,150,000,  as adjusted pursuant
to the terms of the Agreement,  plus the balance of cash in  Philadelphia on the
closing date. The purchase price payable on closing is to be paid  $2,000,000 in
cash,  plus the cash in  Philadelphia,  and the balance of the purchase price by
delivery  to Seller of two  promissory  notes.  Said  promissory  notes  will be
secured by all of the assets of Philadelphia,  the stock of Philadelphia and its
subsidiaries and guarantees by  Philadelphia,  LGHI, and Liberty Food Group, LLC
("LFG"). The closing is scheduled to occur on November 15, 2000.

         The  Agreement  provides that LP&D will pay a break-up fee to Seller in
the  amount  of  $500,000  if it  fails to pay him the  $2,000,000  due upon the
closing.  As part of the  agreement  among the  parties,  LGHI and LFG agreed to
secure the  payment of said  break-up  fee by  delivering  a letter of credit to
Seller or, in the  alternative,  by  granting  him a security  interest in their
accounts  receivable and their inventory.  Since LP&D did not deliver the letter
of credit to Seller by September  22nd, LGHI and LFG have secured payment of the
$500,000  break-up  fee by  granting  to  Seller a  security  interest  in their
accounts receivable and inventory.

         For the terms and conditions of the Agreement, the notes evidencing the
cash payment due upon closing and the agreements  securing the $500,000 break-up
fee, reference is made to such documents attached hereto as Exhibits 10.18-10.22
and the terms of such  Exhibits  are  incorporated  herein by reference in their
entirety.  All statements  made herein  concerning the foregoing  agreements are
qualified in their entirety by reference to such Exhibits.

Item 7.  Financial Statements and Exhibits.

       10.18  Stock  Purchase  Agreement  dated as of September 15, 2000, by and
              among LP&D, Philadelphia Foods, Inc. and Marvin Raab.

       10.19  Promissory note executed by LP&D,  dated as of September 15, 2000,
              in the original principal amount of $500,000.

       10.20  Promissory  note executed by LP&D,  dated as of September 15, 2000
              in the original principal amount of $1,500,000.

       10.21  Security  Agreement  dated as of September 22, 2000 by Marvin Raab
              and Liberty Food Group, LLC.

       10.22  Security  Agreement  dated as of September 22, 2000 by and between
              Marvin Raab and Liberty Group Holdings, Inc.


                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                      LIBERTY GROUP HOLDINGS, INC.


                                      By: /s/ Dennis Lane

                                          Dennis Lane
                                          Chairman and Chief Executive Officer


Date: September 27, 2000



<PAGE>
                                  EXHIBIT INDEX

       10.18  Stock  Purchase  Agreement  dated as of September 15, 2000, by and
              among Liberty Processing & Distributing, Inc., Philadelphia Foods,
              Inc. and Marvin Raab

       10.19  Promissory  note  executed by Liberty  Processing &  Distributing,
              Inc,  dated as of September  15, 2000,  in the original  principal
              amount of $500,000

       10.20  Promissory  note  executed by Liberty  Processing &  Distributing,
              Inc.,  dated as of September  15, 2000 in the  original  principal
              amount of $1,500,000

       10.21  Security  Agreement  dated as of September 22, 2000 by Marvin Raab
              and Liberty Food Group, LLC

       10.22  Security  Agreement  dated as of September 22, 2000 by and between
              Marvin Raab and Liberty Group Holdings, Inc.



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