Court Approves $50M Settlement in Ex-'Sun-Times' Group Lawsuit

By: E&P Staff Delaware's Chancery Court Monday approved a $50 million settlement of the 2003 lawsuit a big shareholder of the Sun-Times Media Group, Cardinal Value Equity Partners, brought against Henry Kissinger, former Illinois Gov. James Thompson and other independent directors of the newspaper publishing company formerly known as Hollinger International.

The settlement, which was made public in May 2005, calls for the $50 million to be paid to Sun-Times Media Group. The settlement will be funded by the company's executive and organization liability insurance policies, the company said.

The company also agreed to pay $2.5 million to lawyers for Cardinal. Sun-Times Media Group also said the Chancery Court approved a previously announced $2.8 million settlement with former executive Peter Y. Atkinson.

Cardinal alleged that the independent directors breached their fiduciary duties by doing nothing while former Chairman Conrad Black and other key executives plundered the company through improper fees, contracts, and other fraudulent methods.

The settlement does not include any admission of wrongdoing or liability by the former directors, the company said.

In addition to Kissinger and Thompson, the former directors who are parties to the Cardinal settlement are Richard R. Burt , Shmuel Meitar, Dwayne O. Andreas, Raymond G. Chambers, Marie-Josee Kravis, Robert S. Strauss, A. Alfred Taubman, Lord Weidenfeld, and Leslie H. Wexner.

As part of the settlement, Cardinal's claims against other defendants -- including Black; his wife, Barbara Amiel Black; Daniel W. Colson; Richard N. Perle, former Sun-Times Publisher F. David Radler; Bradford Publishing Company, and Horizon Publications, Inc., will be dismissed without prejudice, Sun-Times Media Group said.

"The dismissal without prejudice will enable the (board of directors) Special Committee to continue to pursue the company's claims against Mr. and Mrs. Black, Mr. Radler, Mr. Colson, Mr. Perle, John A. Boultbee, Hollinger Inc., Ravelston Corporation Limited, and Ravelston Management Inc. in the U.S. District Court for the Northern District of Illinois," the company said.

Litigation in that civil suit has been stayed pending outcome of a criminal fraud and racketeering case that federal prosecutors in Chicago have brought against Black, Radler, Boultbee, former Hollinger International General Counsel Mark Kipnis, and Ravelston. All have pleaded not guilty, except Radler, who reached a plea agreement for a reduced prison sentence on a single count of mail fraud. The agreement requires him to testify against Black and others.