By: Mark Fitzgerald Chicago Sun-Times parent Hollinger International Inc. will pay $3.5 million to the lawyers for Tweedy Browne Co., the big institutional investor that first blew the whistle on the alleged corruption of former Chairman Conrad Black, the company revealed in a filing with the U.S. Securities and Exchange Commission (SEC).
Hollinger International said it will pay directly to the lawyers $35 million to settle a lawsuit in which two Tweedy Browne entities sought to recover $5 million in legal costs and fees related to an investigation of Black by a special committee of Hollinger's directors. That committee alleged in 2004 that Black, his lieutenant, former Sun-Times Publisher F. David Radler, and other key executives "looted" the company of some $400 million.
Tweedy Browne also contended in its lawsuit that it had assisted in a shareholders' investigation of Black as long ago as 2001.
Tweedy Browne will receive no cash in the settlement, and has agreed to seek dismissal of the lawsuit filed in Delaware Chancery Court, the SEC filing said.
Tweedy Browne owns a 14% stake in Hollinger, and was the first big stockholder to speak out against Black's management of the company. Chicago-based Hollinger International will soon change its name to Sun-Times Media Group, in part to differentiate itself from Hollinger Inc., the Toronto-based holding company that owns a controlling stack in International and was once used by Black to control his worldwide chain of newspapers.
Black is scheduled to go on trial in March in Chicago federal court on charges of money laundering, fraud, racketeering and obstructing justice. He has pleaded not guilty. Radler has pleaded guilty to a single count of mail fraud in a plea bargain in which he agreed to cooperate in the investigation and trials of Black and others.
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