By: Mark Fitzgerald
Chicago Sun-Times publisher Sun-Times Media Group (STMG) and other creditors cannot force Hollinger Inc. out of bankruptcy protection for another four weeks, under an Ontario court ruling.
The court directed creditors to “conduct good faith settlement negotiations” over the $93 million debt owed by Hollinger, the Toronto-based holding company that was a key corporate cog in disgraced newspaper baron Conrad Black now-ruined empire.
Hollinger’s principal asset is a an approximately 66.8% voting stake and 17.4% equity interest in STMG. Hollinger filed for bankruptcy protection Aug. 1 to prevent debt-holders from taking over the company.
STMG and other creditors have asked the court to remove Hollinger from protection under the Canadian Companies’ Creditors Arrangement Act.
Under the court’s rulings, Hollinger’s protection will be extended until at least Sept. 28, with a hearing scheduled for Sept. 26 if the dispute is not settled.
The court order also prohibits Hollinger from using its voting stake to impose any changes at STMG. Last July 31, Hollinger used its voting stake to expand the board of directors, and install its representatives as the board’s majority.
But the Ontario court ruled that, until Sept. 21, those new directors will not attend any meeting of the STMG board or its committees unless their attendance “is required by their fiduciary duties to the (STMG) stockholders, other than solely to Hollinger.”