By: E&P Staff
Toronto-based holding company Hollinger Inc. is forcing a showdown at next Tuesday’s annual meeting of Chicago Sun-Times publisher Hollinger International Inc. over its demand to seat two of its representatives on International’s board of directors.
International said Wednesday that it had received a letter from Inc. stating that the firm — which deposed newspaper mogul Conrad M. Black once used to control a worldwide empire — intended to nominate two its directors for positions on International’s board. Inc. intends to nominate its Chief Restructuring Officer Randall Benson and director Stanley M. Beck for the seats, according to the letter.
Inc. is International’s largest single shareholder, and could easily elect its representatives because it has voting control of the company through its ownership of super-voting shares. Last month, International rejected an Inc. demand that it have at least two representatives on any board of 12 or fewer members, and three representatives on any larger board.
In a statement on the letter, International said U.S. District Court in Chicago on Monday issued an order in the case of the U.S. Securities and Exchange Commission (SEC) vs. Hollinger International Inc. naming former SEC Chairman Richard C. Breeden as “special monitor” of the company “immediately upon the occurrence of certain events, including the election of a new person to the board of directors of the company unless that person is nominated with the concurrence of 80% of the then-incumbent directors.”
The special monitor’s duty would be to “protect the interests of the non-controlling shareholders of the company to the extent permitted by law,” according to International.
International said it would “consider its options” in light of the Inc. nominations, and the court order.
Breeden headed the special committee of International that alleged Black, former Sun-Times Publisher David Radler and other key executives systematically “looted” the publishing company of some $400 million by pocketing improper fees and arranging insider deals.
Radler has pleaded guilty to a single count of mail fraud in exchange for a reduced prison sentence and a pledge to testify against Black, who has pleaded not guilty to numerous federal criminal charges of fraud and money laundering.