By: Jennifer Saba
Hollinger International’s annual shareholder meeting was quieter than anticipated, even after the company announced that two Hollinger Inc. nominees were elected to the board.
Hollinger Inc.’s Chief Restructuring Officer Randall Benson and director Stanley M. Beck both gained seats despite International’s efforts to keep Inc. reps out of the boardroom.
Inc. — which was run by former Hollinger International CEO Conrad M. Black — is International’s largest shareholder with a 17.4% equity stake. It has 66.8% of voting rights through super-voting shares.
Along with Benson and Beck, shareholders elected two new directors, John F. Bard, former CFO of the Wm. Wrigley Jr. Co., and Raymond S. Troubh, a former general partner at Lazard Freres & Co. Directors Cyrus F. Freidheim Jr., John M. O’Brien, Graham W. Savage, Raymond G.H. Seitz, and the company’s chairman and CEO, Gordon A. Paris, were re-elected to their seats.
The election of directors Benson and Beck triggered a stipulation that a court appointed “special monitor” — in this case, former Securities and Exchange Commission chairman Richard C. Breeden — will act as a watchdog over board activities. The provision ensures that the interests of non-controlling and minority shareholders are protected.
The meeting, which took place in The St. Regis Hotel in New York this morning, was anticlimactic since an expected confrontation among shareholders never came to pass — only one person in a room of about 70 came forward during the question and answer session.
A representative for Cardinal Capital Management thanked various board members for their hard work. Cardinal Capital Management, which owns 6.1% of Hollinger’s shares, is against Hollinger Inc.’s move to place two directors on the board.
To complicate matters, International is suing Inc., alleging that Black and others including business partner David Radler plundered $400 million from International. In December, International’s general counsel wrote a letter to Inc. taking issue with Inc.’s desire to nominate two board members on the belief that Inc. directors could not act in the best interests of International’s shareholders.
International proposed that Inc. could have one seat on the board but that member could not have super voting rights for at least 18 months. Inc. rejected the suggestion.
Towards the end of the meeting, Paris addressed the possible sale of the Sun-Times Newspaper Group (STNG) by saying the company would pursue such an option only if it made sense. He acknowledged that before any such move can even be considered, the STNG would have to work through several financial problems, including tax issues.