US judge to rule on sale of 'Daily Telegraph'

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The Independent Online

The denouement in the saga of The Daily Telegraph and disgraced proprietor Lord Black has been scheduled for a Delaware courtroom later this month. The trial, which should end the six-month battle for control of the paper, has been set for 23 July, under Judge Leo Strine.

Judge Strine, who has already played a key role in events, will decide whether to allow Lord Black the opportunity to block the sale of The Daily Telegraph, Sunday Telegraph and The Spectator to the Barclay brothers, owners of The Scotsman and the Ritz hotel.

It follows Lord Black's new lawsuit, filed on Friday night, against Telegraph parent company Hollinger International over the sale. His holding company, Hollinger Inc, owns 18 per cent of Hollinger International shares but controls 68 per cent of its voting rights. He wants to force Hollinger International to hold a shareholder vote on last month's £665m sale to the Barclays.

Hollinger International, which is suing Lord Black for $1.25bn (£680m) damages in a racketeering lawsuit, says it does not need to ask for shareholders' approval.

In January, Judge Strine blocked a secret deal in which Lord Black agreed to sell the Barclays his controlling stake in Hollinger International. But last month he appeared to back Lord Black's shareholder rights when he ordered Hollinger International to hand him confidential financial data over the Telegraph sale, prompting speculation that hecould still back the demand for a shareholder vote.

Lord Black argues that the sale of the Telegraph group is not a good deal for shareholders, despite the high price it fetched. Around £100m must be paid in capital gains tax. Because it is also selling its main asset, Hollinger International must also reduce its debts to meet its official credit requirements. This could leave less than £400m to distribute to shareholders.

Hollinger International directors, including former US secretary of state Henry Kissinger, suspect Lord Black wants to strike a deal, which could see him agreeing not to block the Telegraph sale if the $1.25bn lawsuit is dropped.

Hollinger International has not decided how it will hand out the cash it has made from the Telegraph sale. It says it will either pay a special dividend to shareholders, buy back some of its shares or keep the cash for acquisitions.

It is consulting lawyers on whether it can hold back Lord Black's share of the proceeds. If shareholders do not vote against the Telegraph deal, it will be completed on 30 July.

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