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Conrad Black leaves after his bail hearing at Federal Court Friday July 23, 2010, in Chicago. (Ryan Remiorz)
Conrad Black leaves after his bail hearing at Federal Court Friday July 23, 2010, in Chicago. (Ryan Remiorz)

Conrad Black gets okay to sue for libel Add to ...

Conrad Black has won court approval to sue prominent U.S. politicians and business people such as Henry Kissinger and Richard Breeden under Canada's strict libel laws.

A panel of three judges with the Ontario Court of Appeal ruled Friday that Lord Black is entitled to proceed in Ontario courts with libel lawsuits against nine former Hollinger International Inc. officers and directors who accused him of running a "corporate kleptocracy" at the Chicago-based newspaper company.

The nine former officials include Mr. Breeden, former chairman of the U.S. Securities and Exchange Commission, who led the investigation into Lord Black's corporate conduct; Mr. Kissinger, former U.S. secretary of state; James Thomson, the former governor of Illinois; and Graham Savage, a director on many corporate boards and the only Canadian resident named in the lawsuit.

None of the officials could be reached for comment.

Although Lord Black has relinquished his Canadian citizenship and the statements against him were filed with U.S. regulators and released on the company's U.S. website, the appeal court said the comments were partly directed at Canadian media against a man who had built most of his reputation in Canada.

"It would be unfair to deprive him of a trial before the community in which his reputation has been damaged," Madam Justice Andromache Karakatsanis wrote in the appeal court ruling.

Lord Black launched a lawsuit against the former Hollinger officials in 2004 seeking damages of more than $1-billion after the company released a voluminous report accusing him of "aggressive looting of Hollinger" and creating a business "in which ethical corruption was a defining characteristic of the leadership team."

The former officials argued that the libel action should be heard in a U.S. court because Lord Black is no longer a resident of Canada and the statements were issued in Chicago by an American company. U.S. libel laws are much laxer than those in Canada.

Judge Karakatsansis said Lord Black's accusers were "sophisticated businessmen who targeted the Canadian media and who reasonably foresaw the possibility that their conduct in posting the statements on the Internet would cause damage to Black's reputation in Ontario."

Earl Cherniak, a Toronto lawyer who represented Lord Black, said his client "is very pleased with the decision and looking forward to a time when the trial of his libel action against Mr. Breeden and others is there."

Legal experts said Lord Black faces a costly and potentially unrewarding legal odyssey in his libel lawsuits. The case would involve hundreds of corporate documents, transactions and evidence submitted in civil lawsuits and in a criminal trial that saw Lord Black and his fellow executives convicted of fraud.

It could take years to pursue such a complex case, and one libel expert, Peter Downard of Fasken Martineau DuMoulin LLP in Toronto, said any potential damage awards could be small if Lord Black prevails.

Mr. Downard said criminal and other regulatory convictions are admissible evidence in libel cases in Ontario and Lord Black's record "could have a very significant impact on the damages that a court might award."

A U.S. appeal court judge is expected to rule as early as next week whether the convictions against Lord Black and his executives can still stand in the wake of a U.S. Supreme Court ruling that struck down one of the fraud convictions, which is known as honest services.

Mr. Cherniak said if all the convictions are struck down "it would be favourable to the libel case."

In addition to the outcome of the criminal case, Lord Black also faces charges from the Securities and Exchange Commission and allegations that he owes U.S. tax authorities $71-million (U.S.) in unpaid taxes and penalties.

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