[southnews] Black's media empire now hollowed-out shell Date: Sat, 14 Jul 2007 12:20:26 -0500 (CDT) Conrad Black's guilty verdict may bring the Hollinger International Inc. scandal to a conclusion, but it won't revive the once sprawling media empire. Black - the former owner of the Fairfax newspaper group in Australia - owner of The Sydney Morning Herald and the Melbourne Age - used that money to support a lavish lifestyle that included a $US2.6 million ($A3 million) ring he bought for his wife VINCE TALOTTA / TORONTO STAR *Toronto Star - 35 minutes ago *Conrad Black's guilty verdict may bring the Hollinger International Inc. scandal to a conclusion, but it won't revive the once sprawling media empire. Black, 62, was found guilty yesterday by a Chicago jury on three counts of fraud and one count of obstruction of justice in relation to charges that he and three other defendants looted the company of $84 million (U.S.). Jurors, though, found him guilty of a fraction of that defence lawyers put the amount at $3.5 million. He faces a maximum of 35 years in prison. A lawyer for Black told a U.S. court yesterday that Black plans to appeal the four guilty verdicts. It's a long fall from grace for the former media tycoon, who once presided over the extensive holdings of Hollinger International Inc., now called Sun-Times Media Inc. At its height in 1997, the firm owned 13 big-city dailies the National Post, the Daily Telegraph, The Jerusalem Post, the Chicago Sun-Times and hundreds of community newspapers in Canada and the United States. Now, all that's left in the portfolio is the struggling Chicago Sun-Times, a second-ranked Chicago daily, and dozens of regional community newspapers and shopping flyers. The situation is more dire for Hollinger Inc., the Toronto-based holding company that once constituted the centre of Black's empire. The firm, which continues to hold a 20 per cent stake in Sun-Times and a majority of the voting shares, warned earlier this year that its "ability to continue as a going concern is uncertain" as it owes $93 million worth of senior notes that are in default. "It hangs over our head, but we carry on with our plans to try to maximize our investment in Sun-Times Media," said Wes Voorheis, the company's CEO, in an interview yesterday. "And now that the trial in Chicago is over we can recommence our litigation against the former insiders of Hollinger." Hollinger Inc.'s thinly traded shares closed down 20 cents (Canadian) yesterday at 67 cents. Voorheis said the guilty verdict was "confirmation of a view that we at Hollinger have long held that Black's conduct was criminal." The civil suit seeks "several hundred million" in damages for Hollinger. Black controlled Toronto-based Hollinger, and in turn his newspaper empire, through a privately held Toronto firm called Ravelston Corp. Ltd. Ravelston is now in receivership and Black's control over it has been restricted. Still, there had been speculation that, had he been acquitted, he might have tried to regain control of Sun-Times. But Herbert Denton, a member of Sun-Times' board of directors, told Bloomberg the threat has now all but disappeared. David Radler, the former publisher of the Chicago Sun-Times, was formerly Black's right-hand man and was the prosecution's key witness at Black's trial after cutting a deal. Denton said the guilty verdict should help Sun-Times recoup millions that it says Black stole from the company. Investors pushed up the publisher's shares 13 cents to close at $5.35 (U.S.) in New York. Black began dismantling Hollinger's media empire in 1998 to pay help pay down debts. He resigned as CEO of Hollinger International in 2003 after a company probe into payments he received from buyers of Hollinger International newspapers. The sell-off continued after Black was ousted as chair of Hollinger International in 2004. Today, the firm's shares are worth about half of what they were three years ago. http://www.thestar.com/Unassigned/article/235839 ____________________________________________________ Black felt he 'deserved' stolen cash: prosecutor The Age, Australia June 19, 2007 - 2:46PM Deposed media tycoon Conrad Black stole millions from shareholders because he thought he "deserved" the money, a prosecutor said in closing arguments today at a Chicago fraud trial. And Black - the former owner of the Fairfax newspaper group in Australia - used that money to support a lavish lifestyle that included a $US2.6 million ($A3 million) ring he bought for his wife, prosecutor Julie Ruder told the jury. Black and his associates are accused of skimming some $US60 million ($A71.31 million) from the sale of scores of newspapers in Canada and the United States. "These men were fleecing the shareholders," Ruder told the jury. Ruder described a scheme in which Black and other executives awarded themselves what amounted to massive tax-free bonuses by lying to the board and saying that the buyers of the papers had asked them to sign non-competition agreements. These payments are typical in media transactions, but are legal only if they are actually requested by the buyers as a condition of sale. "They were taking this money because they wanted money not because anyone - anyone -- was worried about their competition," Rudler told the jury. "Conrad Black and Mr (David) Radler used the decision to sell off the company's papers as an opportunity to steal." Radler, who ran the company's US operations and reached a plea deal with prosecutors that could see him spend as little as six months in a Canadian jail, testified that it was Black's idea to begin the scam by awarding money to a holding company he controlled, Hollinger Inc. "When Mr Radler says Mr Black thinks Hollinger Inc deserves the money, what Mr Black was saying is, 'I deserve a cut'," the prosecutor told the jury. The scam was soon expanded to include direct payments to Black and his associates, she said. Black, who renounced his Canadian citizenship to become a British Lord, once presided over the third largest newspaper empire in the world which held such respected titles as Britain's Daily Telegraph, the Jerusalem Post and the Chicago Sun-Times. He has avowed his innocence and blamed the collapse of the company he built from the ground up on the betrayal of his long-time business partner, Radler, and overzealous shareholders who spent far more investigating the wrongdoing than was lost in the alleged fraud. Black's larger-than-life personality, willingness to flaunt his wealth and privilege, conservative views and buccaneer business acumen have drawn a fascinated audience to the 13-week trial, including one man who asked Black to sign a copy of his most recent book, a biography of former US president Richard Nixon. But his arrogance could prove to be his undoing as prosecutors use his "proprietary" airs to show how he flaunted the rules for his own gains. Caught on tape removing 13 boxes of documents from his Toronto offices while under investigation by the US Securities and Exchange Commission, Black has also been charged with obstruction of justice. "The rules don't matter to Mr Black. He wanted those documents out and he took them. Classic, classic Conrad Black," Ruder told the jury. Black has also been accused of misusing corporate perks by charging Hollinger for a portion of his wife's surprise birthday party, using the corporate jet for a holiday in Bora Bora and buying a New York apartment from the company at below market value. His lawyers have argued that many of these expenditures helped him drum up business or were properly accounted for and have accused the prosecution of trying to play up class prejudice by describing Black's extravagant lifestyle. But Ruder said Black stole because of his "need for money" to support a lifestyle he couldn't have afforded otherwise. "How Conrad Black spends his money is up to him," Ruder said. "But when Conrad Black uses other people's money and lies about it and conceals it, that's the government's business and that is a crime." Black, 62, could spend the rest of his life in jail if convicted of fraud, obstruction of justice, racketeering and tax evasion charges. Facing lesser charges are Jack Boultbee, the chief financial officer of Toronto-based subsidiary Hollinger Inc; Peter Atkinson, general counsel for Hollinger Inc; and Mark Kipnis, corporate counsel for Hollinger International. All four men have pleaded not guilty. AFP http://www.theage.com.au/news/world/black-felt-he-deserved-stolen-cash-prosecutor/2007/06/19/1182019091177.html The archives of South News can be found at http://southmovement.alphalink.com.au/southnews/