LawDay reports today that the Securities and Exchange Commission has settled fraud claims against Hollinger Inc., the Canadian company that is the controlling stockholder of the Sun-Times Media Group. The SEC settlement will not require Hollinger to pay any further penalties. However, Hollinger "has agreed, without admitting or denying the allegations, to 'disgorge' $21.3 million in profits and interest received as its share of non-compete fees paid to the company."
Meanwhile, the Sun-Times Media Group has reached a tentative settlement of its claims against Hollinger. According to this press release from the Sun-Times Media Group, subject to approval by interested U.S. and Canadian courts, Hollinger will give up its voting control in the STMG and, in addition, split the proceeds of directors' and officers' claims with the STMG on a 20/80 basis. The STMG press release suggests that the D&O proceeds may amount to as much as $24.5 million "plus interest, less fees and expenses." Also, "certain of the Company's claims against Hollinger will be allowed as unsecured claims, in agreed amounts ('Allowed Claims'). The Company's total recovery in respect of the Allowed Claims will be capped at US$15 million. After the Company receives the first US$7.5 million in respect of the Allowed Claims, 50% of any further recovery received by the Company in respect of the Allowed Claims (subject to the US$15 million cap) will be assigned to Hollinger. Under the terms of the Settlement, the amounts so assigned are intended to be available to fund litigation claims of Hollinger against third parties." Once the settlement is approved by all the courts and other parties that have to sign off, the six Hollinger-appointed directors will resign from the STMG board. And Hollinger is apparently going to reimburse the STMG $1 million in legal fees.
How many real dollars are involved in this settlement is not immediately clear -- but maybe the settlement will help stop the bleeding at the Sun-Times.
Meanwhile, according to the March 25 issue of the LawDay Newsletter, life at a Florida prison seems to agree with Conrad Black. He's serving a 6½ year sentence for "fraud and obstruction of justice over payments he took while he was at the head of the Hollinger International newspaper empire." In what will surely come as a great relief to Sun-Times employees, LawDay quotes an email from Black: "I am doing fine… This is a safe and civilized place and I don't anticipate any difficulty."
Still, all not is rosy for Baron Black of Crossharbour: His recently published biography of Richard Nixon has slipped to #31,200 on Amazon.com. Doing time can really mess up a book tour.
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