Hollinger Inc. Will Cooperate With Feds In Case Against Conrad Black

By: E&P Staff Hollinger Inc. -- the Canadian-based holding company disgraced mogul Conrad Black once used to control a worldwide newspaper empire - - agreed Monday to flip on its former chairman.

Hollinger signed a 1,600-word cooperation agreement with the United States Attorney's Office in Chicago that ensures that no former executives, directors or employees will be prosecuted for any crimes relating to the $16.55 million in non-compete payments diverted from Hollinger International, which publishes the Chicago Sun-Times and other papers, to Hollinger Inc., which then was controlled by Black, with stakes held by his former lieutenant David Radler and others.

The principal asset of Inc., as it is referred to in the agreement, is its approximately 66.8% voting and 17.4% equity interest in Hollinger International, which intends to change its name to Sun-Times Media Group.

In the agreement, which is also signed by U.S. Attorney Patrick J. Fitzgerald, Hollinger Inc. "acknowledges that the government has developed evidence during its investigation that Inc. is criminally liable because one or more of Inc.'s former officers, directors or employees violated federal criminal law with the intent, in part, to benefit Inc. in connection with the above-described fraudulent diversion of approximately $16.55 million from International to Inc. Inc. further acknowledges that one or more of its officers, directors or employees acted illegally in connection with Inc.'s receipt of approximately $16.55 million in non-compete payments and that it is responsible for the repayment of such money."

Inc. noted in a separate statement that money had been "repaid to Hollinger International Inc. with interest in 2004 pursuant to a judgment in the Delaware Court of Chancery."

With the agreement, the former holding company, which is now under court receivership in Canada, joins Radler in agreeing to cooperate in the racketeering fraud and money laundering case against Black, and two former key International executives, Mark Kipnis, Jack Boultbee, and Peter Atkinson. They have pleaded not guilty. Black's trial has been scheduled for March 2007.