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Conrad Black is scheduled to meet soon with the U.S. Securities and Exchange Commission.

Posted on 12/16/2003 11:41:29 AM PST by Liz

Tweedy Browne suing Hollinger

Top shareholder seeks legal fees

Investigated payments to Black

Hollinger International Inc. is facing a lawsuit from a New York investment firm that helped blow the whistle on millions in unauthorized payments made to Conrad Black, other executives and parent company Hollinger Inc. of Toronto.

Tweedy Browne Co. filed suit yesterday seeking reimbursement of legal fees its Global Value Fund incurred investigating possible wrongdoing at the company that owns London's Daily Telegraph, the Chicago Sun-Times and Jerusalem Post.

The lawsuit against Chicago-based Hollinger International was filed in Wilmington, Del., in the state's Chancery Court.

"Lord Black and his associates had been paying themselves many millions of dollars without proper disclosure,'' said the suit.

The suit asks for fees commensurate with "potential recovery of $31.55 million (U.S.)"

That's roughly the amount a special committee of Hollinger International is seeking from Black, other executives and Hollinger Inc.

Black and two executives have pledged to repay almost half the amount, while no decision has been made by Hollinger on the rest.

A figure for the legal fees — which under U.S. law cannot be charged to shareholders in the Tweedy Browne fund — was not specified. Tweedy Browne owns 13.1 million shares in Hollinger International, 18 per cent of its common stock, making it the newspaper company's second-largest institutional shareholder.

An analyst at the investment firm said seeking repayment from Hollinger International is justified because any unauthorized payments recovered will benefit all shareholders.

"We have been instrumental in seeing this go forward. We're trying to do the right thing," said Laura Jereski. "This should be a shared cost."

Hollinger International wouldn't comment on the lawsuit.

The $32.2 million paid to Black, other executives and Hollinger was for so-called "non-compete" fees as part of sales of Hollinger International newspapers to ensure Black and the others would not start competing newspapers. Tweedy Browne said that money should have gone to Hollinger International.

A special committee headed by former U.S. Securities and Exchange Commission chairman Richard Breeden was struck at Hollinger International earlier this year to look into the payments, and found they were not authorized by the board of directors. The committee is investigating other payments. Tweedy Browne has questioned $300 million in payments since 1995.

The suit was filed as The New York Times reported Black will have his first interview with the SEC on Monday as part of its investigation into the unauthorized payments that prompted him to step down as chief executive of Hollinger International last month. He remains chairman as the company looks at options, including the sale of newspapers, to resolve an impending financial squeeze.

Meanwhile, British stockbroker Collins Stewart confirmed yesterday it has entered the bidding for London's Daily Telegraph, Sunday Telegraph and The Spectator magazine.

But the firm, which usually buys companies and offers shares in them to institutional investors, would not elaborate on a report in London's Sunday Times that it is offering £500 million, or about $1.15 billion (Canadian).

Hollinger International has hired global investment banking firm Lazard to seek potential buyers. A source close to the process said no recommendations have been made to Hollinger International as yet.

"There are some (expressions of interest) that are going to make a short list later on and some won't."

Spokespersons for Black and Hollinger International would not comment on the SEC interview.

"If the SEC wants to discuss the status of their investigation, that's up to them," said Jim Badenhausen, Black's personal spokesperson in New York.

A spokesperson for the SEC in Washington declined comment.

The Ontario Securities Commission is also investigating Hollinger and co-operating with the SEC.

With files from the Star's wire services.


TOPICS: Business/Economy; Crime/Corruption; Extended News
KEYWORDS: caucasuslist; communistsubversion
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To: habs4ever
Why is FDR his hero?
21 posted on 12/16/2003 1:04:56 PM PST by Grampa Dave (George $orea$$ has owned and controlled the Rats for decades!)
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To: Constitution Day
Somebody oughta check Amazon to determine how far down it is in the ratings.
22 posted on 12/16/2003 1:05:49 PM PST by Liz
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To: Grampa Dave
Churchill and Reagan, and the Duke of Marlborough are as well.He likes good, effective leaders.Geez, man, don't be as dumb as TLBSHOW...

Try to learn a tad about the man before you call him a leftist.
23 posted on 12/16/2003 1:09:38 PM PST by habs4ever
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To: habs4ever
If he is a conservative, that doesn't give him a pass on this.
24 posted on 12/16/2003 1:15:21 PM PST by Grampa Dave (George $orea$$ has owned and controlled the Rats for decades!)
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To: Liz
FWIW: Sales Rank: 149

25 posted on 12/16/2003 1:29:22 PM PST by Constitution Day (Iraqi blogger to President Bush: "The bones in the mass graves salute you, Avenger of the Bones.")
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To: habs4ever; Grampa Dave
Black claimed FDR was "the savior of American capitalism"

Black: "Franklin D. Roosevelt was the most important person of the twentieth century."

I don't feel so good.


26 posted on 12/16/2003 1:49:50 PM PST by AdamSelene235 (I always shoot for the moon......sometimes I hit London.- Von Braun)
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To: AdamSelene235
Thanks. I hope that you get feeling better.
27 posted on 12/16/2003 1:57:56 PM PST by Grampa Dave (George $orea$$ has owned and controlled the Rats for decades!)
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To: Constitution Day
Not bad. Thanks.
28 posted on 12/16/2003 2:52:01 PM PST by Liz
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To: AdamSelene235; Grampa Dave
Somebody get Adam a barf bag, quick.

God, that FDR stuff is so sick.

29 posted on 12/16/2003 5:12:45 PM PST by Liz
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To: AdamSelene235; Beck_isright; Grampa Dave; BOBTHENAILER; Citizen of the Savage Nation; ...

DATELINE 11-19-2003

At Hollinger Big Perks in A Small World / by Steven Pearlstein

EXCERPTED It's amazing the coincidences you find digging into Hollinger International, the publishing empire that includes Chicago's Sun-Times and London's Daily Telegraph and is quickly slipping from Conrad Black's control.

.......there's Washington superhawk Richard Perle, who heads Hollinger Digital, the company's venture capital arm. Seems that Hollinger Digital put $2.5 million in a company called Trireme Partners, which aims to cash in on the big military and homeland security buildup. As luck would have it, Trireme's managing partner is none other than . . . Richard Perle.

Perle, of course, has been pushing hard for just such a military buildup from his other perch at the Pentagon's secretive and influential Defense Policy Board, where there are a number of other Friends of Hollinger.

There's Gerald Hillman, managing partner of Hillman Capital, which also got a $14 million investment from Hollinger, according to the Financial Times. Hillman is also a partner at Trireme.

Between 1998 and 2002, as Hollinger paid out more than $200 million to Black and close associates in the form of salary, management fees and non-compete payments, the company was able to eke out a total profit of $23 million. During that period, Hollinger shares fell 25 percent while other publishing shares rose -- 17 percent at Gannett and 20 percent at Knight Ridder.

This is all, of course, vintage Black, who got his start as a corporate wheeler-dealer snookering Canadian widows and raiding employee pension funds. But shame on Hollinger's directors for letting themselves be used as corporate hood ornaments, lending legitimacy to Lord Black's financial manipulations and relentless social climbing.

Only one, former Illinois governor James Thompson, was willing to defend himself yesterday, suggesting at one point that there was only so much directors could do with a chief executive wielding absolute voting control. So far, however, there is scant evidence that any of them even tried, at least until dissident shareholders threatened to sue.

Copyright 2003, The Washington Post Co. All Rights Reserved

30 posted on 12/16/2003 5:27:25 PM PST by Liz
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To: Liz
The drumbeat gets louder...

31 posted on 12/17/2003 5:42:35 AM PST by JohnGalt (neo-“Mac, Leroy, and José, you do the fighting and dying, we’ll do the talking”-cons)
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