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Lawyers cleared of conflict-of-interest charges over Hollinger newspaper deals

A lobby sign identifies the Toronto offices of Hollinger International Inc. in 2004. Two Toronto lawyers have been cleared of wrongdoing in a years-long corporate case concerning the sale of Hollinger newspaper assets to CanWest Global Communications Corp. and Osprey Media Holdings Inc.

J.P. MOCZULSKI/THE GLOBE AND MAIL

Two Toronto lawyers have been cleared of any wrongdoing in a corporate case that dragged on for years after they were accused of conflict of interest.

A Law Society of Upper Canada panel has ruled that there was no evidence Beth DeMerchant and Darren Sukonick acted improperly in their roles related to non-compete clauses, a small part of massive deals to sell Hollinger newspaper assets to CanWest Global Communications Corp. and Osprey Media Holdings Inc. more than a decade ago.

The two lawyers had been fighting allegations that they violated the legal profession's conflict-of-interest rules while acting for Conrad Black and his executives, as well as Hollinger International Inc. and subsidiaries.

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Ms. DeMerchant, who has retired from Torys LLP, and Mr. Sukonick, who is now a partner at the law firm, were exonerated of accusations of professional misconduct by the disciplinary panel.

"The panel's careful, closely reasoned decision has important implications for corporate legal practice and for the Law Society's standards of investigation and prosecution," Philip Campbell, counsel for Ms. DeMerchant, said in a statement Thursday night.

The allegations, launched by the Law Society in 2006, focused on non-compete payments to Mr. Black and some of his top executives.

"It has been a terrible waste, not only of the limited money and resources that the Law Society has to protect the public, but especially of Mr. Sukonick's time and efforts," Ian Smith, counsel for Mr. Sukonick, said in a statement.

Torys managing partner Les Viner added that the law firm deeply regrets the personal toll suffered by Ms. DeMerchant and Mr. Sukonick, but the two lawyers deserve the vindication after they displayed courage and determination.

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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