By: E&P Staff A Canadian court has cleared the way end Hollinger Inc.'s control of Sun-Times Media Group (STMG), the Chicago Sun-Times parent announced Tuesday.
STMG said that on Monday, Ontario Superior Court Judge Colin Campbell approved the settlement agreement that resolves all the litigation and disputes among STMG, Hollinger Inc., and Davidson Kempner Capital Management LLC, the Toronto firm that is Hollinger's largest secured crediter.
Under the settlement agreement announced in March and revised earlier this month, All of Hollinger Inc.'s outstanding Class B -- with 10-to-1 voting rights that allowed it to have a 70% voting stake in STMG with just a 19% equity interest -- will be converted to Class A shares with one vote per share.
Davidson Kempner will receive from Hollinger shares giving it an approximately 20% stake in STMG.
Toronto-based Hollinger Inc. is the now-insolvent holding company Conrad Black once used as part of his web of control of his worldwide newspaper empire. He and three other top executives of Hollinger International, as STMG was formerly known, are serving prison sentences on convictions for fraud in the sale of some of the company's community papers.
Several STMG directors installed by Hollinger last year in a corporate coup also agreed to resign at its annual meeting June 17.
STMG is exploring strategic alternatives, including the sale of all or some of its newspapers.
"We are very pleased to have resolved this complicated matter," STMG President and CEO Cyrus F. Freidheim Jr. said in a statement. "This is another step in achieving the goals we have laid out to our shareholders: improved operating performance, resolution of the Company's unique legacy issues, and exploration of strategic alternatives for the Company."
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