Conrad Black is heading back to court in his battle for control of Hollinger International, in an attempt to block the media company's agreed sale of its Daily Telegraph newspaper.
Lord Black's Hollinger Inc, which speaks for 68 per cent of the voting shares in Hollinger International, filed a lawsuit on Thursday in an attempt to force a shareholder vote on the Telegraph transaction.
"We do not believe that Hollinger International should be allowed to disenfranchise shareholders and deny them their fundamental legal rights," Hollinger Inc said.
Last week, after a long-running auction, Hollinger International agreed to sell its most valuable assets, its UK publications -The Daily Telegraph, The Sunday Telegraph and The Spectator magazine - to the Barclay brothers for £665m.
Hollinger International and its financial advisers on the Telegraph transaction are confident the deal does not have to go to a shareholder vote. Legal sources believe that Lord Black, ousted as chairman of Hollinger International, is using the new lawsuit to bolster his negotiating position with the company.
Hollinger International has filed a $1.25bn against Lord Black which accused him of "racketeering" and using company money as a "cash cow" to fund his extravagant lifestyle. Although the company is committed to handing the money raised from the sale to shareholders, it is thought that it is not planning to include Lord Black in that disbursement because of the amount of money it claims he "looted" from Hollinger International.
It is believed that Lord Black wants Hollinger International to drop its lawsuit against him and agree to pay him his share of the Telegraph proceeds. In return, the Conservative peer would retract his legal action over putting the deal to shareholders. A statement from Hollinger Inc did not say it opposed the sale of the Telegraph, but that it had not been provided with enough information to decide its position.
One lawyer close to the issue said the two sides would enter talks to see if a settlement could be reached before Lord Black's case reaches the courts. His case hinges on a clause in the corporate law of Delaware, which states that a disposal requires shareholder approval if it involves all or substantially all the assets of a company.Reuse content