Hollinger Inc. Sheds Cayman Island Newspaper Holdings

By: E&P Staff

Hollinger Inc., the insolvent holding company Conrad Black used to control his collapsed newspaper empire, shed its 39.99% interest in Cayman Free Press Ltd. (CFP), publisher of The Compass newspaper in the Cayman Islands.

Under the repurchase deal valued at about US$5.5 million, CFP is bought all the shares in its company owned by Hollinger’s wholly-owned subsidiary, Holcay Holdings Ltd. It is to pay out a cash dividend to all its shareholders.

Hollinger Inc. is in bankruptcy protection. Its principal asset is a 70% voting interest and 19.7% equity stake in Sun-Times Media Group (STMG), publisher of the Chicago Sun-Times and about 100 other Chicago-area dailies and non-dailies.

Black was convicted in July in federal court in Chicago on three counts of mail fraud and one count of obstruction of justice. He is due to be sentenced Nov. 30.

An internal investigation by STMG, then known as Hollinger International Inc., alleged that in “massive looting” of the company by Black and other executives, some $1.5 million in dividend payments from CFP could not be accounted for.

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