Black Ordered Not to Interfere With Hollinger Sale

By: (AP) A Delaware judge Tuesday said he would continue until the end of October an injunction barring former Hollinger International Inc. chief executive Conrad Black from interfering with the Chicago newspaper company's sale plans.

Leo Strine, vice chancellor of Delaware's Chancery Court, rejected Black's request to lift the ban the court imposed in March, which blocked the former CEO's planned sale of a controlling stake in Hollinger International to Britain's David and Frederick Barclay, owners of London's Ritz Hotel.

But Strine also rejected Hollinger International's bid to prolong the ban until a deal is closed, or until the end of 2004, depending on which comes first.

The judge Tuesday rebuffed Black's challenge to a May ruling in which Strine granted Hollinger International summary judgment against its one-time chief, and extended the injunction on wrongful interference with Hollinger International's auction of the London Daily Telegraph.

In public statements, Hollinger International said it has backed away from plans to sell all of its assets, which include the Chicago Sun-Times (Click for QuikCap) and other newspapers, as well as the Telegraph. While plans to sell the company as a whole are off, the Telegraph itself remains on the selling block.

Strine earlier this year found Black violated duties to Hollinger International by trying to sell his shares of Hollinger Inc., a Canadian company that owns a controlling block of shares in Hollinger International.

The injunction will not bar Black from commenting publicly on the Telegraph deal, Strine said, particularly since Black, through Hollinger Inc., still owns a 72.4% voting interest and 30% equity interest in Hollinger International.

The question of whether Hollinger International can close a deal for the Telegraph without the consent of its controlling shareholder is one that a court may have to decide, Strine said.

Tuesday's hearing also focused on a May ruling from the Delaware court that Black and Hollinger Inc. owe nearly $30 million to Hollinger International, money from allegedly fictitious non-competition agreements entered into in connection with past asset sales.

Black has tendered options in payment and Hollinger International rejected them, saying the ex-CEO is not entitled to the options due to alleged breaches of fiduciary duty.

Strine ruled the payments, which were due June 1, should be cash.

He told attorneys to draft an order reflecting his decision, which will be entered as the final judgment in the Delaware Chancery Court matter. Black has already appealed Strine's earlier rulings to the Delaware Supreme Court.