Washington — Deposed media tycoon Conrad Black is cynically trying to scuttle the $1.8-billion sale of Britain's Daily Telegraph in order to line his own pockets, rival Hollinger International Inc. says in a Delaware court filing.
In a blistering legal attack, newspaper publisher Hollinger International said Lord Black and his Toronto-based holding company, Hollinger Inc., have "conjured up" an imaginary plot to thwart the sale of the Telegraph, according to a brief filed yesterday in a Delaware Court.
Delaware-based Hollinger International said Lord Black's legal case is feeble and hypocritical.
"[Hollinger Inc.'s] indignant criticism of the Telegraph sale is just a cover for Black's relentless effort to extricate himself from the damage he has caused [Hollinger] International by diverting every benefit and corporate opportunity from the shareholders to himself," the company said in its filing.
"[Hollinger] Inc.'s real desire is to block the Telegraph sale to advance its self interest, rather than the best interests of the majority of International shareholders."
Lord Black wants Delaware's Court of the Chancery to force a vote by shareholders on the pending sale of the Telegraph Group of newspapers to Britain's billionaire Barclay brothers. As majority shareholder, Lord Black would win any vote. The court is due to hear oral arguments in the case today.
Lord Black has accused Hollinger International of trying to force through a fire sale of the Telegraph without his consent, thereby wrecking the company and leaving it with a second-rate batch of newspapers, including the tabloid Chicago Sun-Times.
The courtroom showdown is the latest chapter in a seven-month legal battle for control of the once-sprawling Hollinger media empire, which once included Canada's Southam chain of newspapers and the National Post.
Lord Black was ousted as Hollinger International chairman earlier this year amid allegations that he and other executives pocketed tens of millions of dollars in unauthorized secret payments. He remains at the helm of Hollinger Inc., but he has been frozen out of most decision-making by an earlier order.
A key test for the court is whether the Telegraph, Britain's leading daily, represents the bulk of Hollinger International's assets. If so, Lord Black may have a strong case for arguing that he deserves a say in its sale.
Lord Black owns 18.2 per cent of Hollinger International's stock, but multiple voting shares give him 68 per cent voting control.
