Conrad Black will be a free man as early as Wednesday after a Chicago judge sets the conditions of his bail at a morning hearing, but his release will be overshadowed by costly and extensive legal battles that remain to be fought.
It is unknown what terms Judge Amy St. Eve will set for Lord Black's bail conditions, but the last time she granted him bail, in 2005 before the start of his criminal trial, she restricted him to the United States, took away his passport and required a $20-million (U.S.) bond. The bail hearing follows a U.S. Supreme Court decision last month to overturn a key element of his fraud and obstruction of justice convictions, which return to a federal appeal court for reconsideration.
The appeal is one of several major legal assaults, including securities and tax charges, that remain to be defended by Lord Black. But unlike the legal skirmishes that followed his ouster from his newspaper conglomerate, Hollinger International Inc., in 2003, he is now paying the legal bills himself.
According to people familiar with Hollinger, an insurance policy that covered most of Lord Black's legal costs for seven years was quietly terminated last year when the company filed for bankruptcy protection. One source said the policy, known as directors and officers insurance, has paid more than $40-million (U.S.), the bulk of Lord Black's legal bills since 2003.
The closed policy means that Lord Black faces a potentially enormous challenge to pay for a myriad of lingering charges and court cases. Legal experts estimate it has cost Lord Black more than $1-million just to mount his appeal to the U.S. Supreme Court of his 2008 criminal convictions.
The former newspaper baron also faces what experts predict will be a multimillion-dollar battle to defend himself against charges filed by the U.S. Securities and Exchange Commission, a case which has been stalled pending the outcome of the criminal case. He also is facing allegations from the Internal Revenue Service that he owes $70-million in unpaid taxes and penalties. A number of other cases, including libel charges against a number of former Hollinger officials, are also working their way through the courts.
"He will have to fund his litigation out of his own pocket. Maybe now we will finally be able to see how wealthy he really is," said Eugene Fox, a partner with Connecticut-based Cardinal Capital, which lost money after investing in Hollinger International.
Little remains today of the corporate or personal empire Lord Black had accumulated by the time of his ouster from Hollinger International in 2003. The company's flagship newspaper, The Telegraph of London, has been sold and his core U.S. holding, the Chicago Sun-Times, was sold for $5-million and unspecified debts in 2009.
Lord Black's Toronto headquarters at 10 Toronto Street, a storied grey stone temple that has been his core business perch since 1978, has been acquired by a money management company. Two luxury homes in London and New York were sold, and a U.S. hedge fund controls most of the ownership of his oceanside Palm Beach home.
According to Toronto property records, his wife Barbara Amiel registered a three-year, $3-million mortgage in December, 2008, with an annual interest rate of 12.68 per cent, against his remaining residence, a sprawling estate in north Toronto that was originally owned by his father.
If the U.S. appeal court agrees to reverse Lord Black's fraud and obstruction of justice convictions or reduce his prison sentence, friends and associates interviewed said they expect him to apply to return to Toronto. Although he gave up his Canadian citizenship to qualify as a peer of Britain's House of Lords in 2001, legal experts said he is eligible to apply for Canadian residence.
Lord Black declined in an e-mail to comment.
But one friend who asked not to be identified said he remains "very energized" and "hasn't lost his taste for being front and centre," and plans to return to an active life in Toronto.
Hal Jackman, a prominent Bay Street financial player and long-time friend, said Lord Black would find many sympathetic friends in Canada, but he warned business backers will be scarce.
"I don't think people will line up to give him $100-million to buy a newspaper company," Mr. Jackman said.
Instead, he said Lord Black's future "lies in the realm of ideas and books."
Douglas Pepper, publisher of McClelland and Stewart Ltd., said he hopes to release this fall Lord Black's memoir of the last decade, tentatively titled The Fight of My Life.
"There's a final chapter to be written and we want to make sure we publish when he and his lawyers are comfortable," he said.