Lawyers at Hollinger International were preparing lawsuits yesterday aimed at blocking ousted CEO Conrad Black’s plans to sell his controlling stake in the company, The Post has learned.
The multiple suits could be filed as early as this week, according to sources familiar with the matter.
Meanwhile, the Ontario Securities Commission has opened a formal investigation into companies related to Hollinger Inc. – the Toronto-based holding company that is Black’s vehicle for controlling Hollinger International – a spokesperson for the OSC said last night.
And Hollinger buyers Sir David and Sir Frederick Barclay have required Black to put $60 million in escrow to cover any potential liability from the company’s claims, the Financial Times reported.
The suits are likely to target Black, Hollinger Inc. and perhaps the reclusive Barclay brothers, who have bid more than $300 million for Black’s controlling stake in Hollinger International, the sources said.
A representative of Hollinger Intentional declined comment.
On Tuesday, Hollinger International’s board of directors met and named a committee to review the bid by the Barclays’ Press Holdings International, which was made public on Sunday.
The company’s board is expected to meet again today or tomorrow to weigh how to block the bid, sources said.
Black was forced to step down as CEO in November after the board found that he and others took some $32 million in non-compete payments that were either unauthorized or improperly disclosed.
At the time, Black agreed to repay $7.2 million, but has since reneged on that pledge and now says he owes the company nothing.
On Saturday Hollinger International made public a lawsuit that alleges that Black, his former top deputy David Radler and entities they controlled have looted the company of some $200 million through non-compete payments and management fees.
A special committee headed by former Securities and Exchange Commission chief Richard Breeden has been probing the company’s finances since last spring.
On Friday the SEC, in cooperation with Hollinger International, obtained a court order prohibiting Black from interfering with the special committee investigation.
Lawyers are currently reviewing whether or not a change in control of the company would constitute interference in the probe.
The court could appoint Breeden as a special monitor of the company, which would give him broader powers to protect Hollinger International shareholders.
Hollinger International operates the Chicago Sun-Times, the London Daily Telegraph and the Jerusalem Post, among others.