Hollinger’s Black May Resign Within Days

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The New York Sun

TORONTO – Conrad Black is expected to step down from the board of Hollinger Inc. within the next few days, according to a person familiar with the situation.


Hollinger Inc. is the parent company of Hollinger International Inc., the Chicago newspaper publisher that is immersed in a legal battle with Mr. Black, its former top executive, over payments the company made to him. He has denied wrongdoing. Hollinger Inc. is controlled by Mr. Black, who is chairman of the Toronto holding company, and it has voting control over Hollinger International. Hollinger is a minority investor in The New York Sun.


Catalyst Fund General Partner I Inc., a major holder of Hollinger Inc. preferred shares, has been pressing for Mr. Black’s ouster from Hollinger Inc. through a court challenge in the Ontario Superior Court of Justice. The court recently ordered an investigation into transactions between Hollinger Inc. and companies controlled by Mr. Black.


At a court hearing Friday, a lawyer for Mr. Black indicated the newspaper baron is prepared to step down from the Hollinger board but he didn’t stipulate the timing. Hollinger Inc.’s independent directors had discussed the possible resignation of Mr. Black from the board.


Mr. Black on Thursday issued a proposal for Hollinger Inc. to become a private company solely owned by his holding company Ravelston Corp. Under that proposal, Hollinger Inc. would effectively buy out its minority shareholders, though terms of such a transaction haven’t been set.


Lord Black remains a director of Hollinger International Inc.


Mr. Black’s intention to step down from Hollinger Inc. includes resigning his position as chief executive.


“With the progress that Hollinger Inc. has made in strengthening its financial and legal position and with a privatization proposal in place, Lord Black believes it is appropriate for him to step aside from the Hollinger Inc. board, and as Chairman and Chief Executive, to facilitate the privatization process and eliminate any concern whatsoever that the company’s independent directors will render an objective recommendation regarding the transaction,” said a statement sent by a spokesman for Mr. Black.


The statement said the move follows the “successful completion of two refinancings by Hollinger Inc. and a commitment for the financing necessary for the privatization.”


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