Lord Black of Crossharbour "on many occasions" threatened to sue members of his own board if they did not do what he told them, a court in Delaware heard yesterday.
The court heard highly personal testimony in the case set to determine whether Lord Black can complete a sale of his newspaper holdings to the Barclay brothers.
Richard Breeden, a former chairman of the Securities and Exchange Commission who has headed a special committee probing alleged financial misdeeds at Hollinger International, the owner of the Telegraph Group of newspapers, noted that while no criminal charges have been filed so far, they could be in the offing.
The trial, which is due to end this evening with a ruling next week, was set alight when Mr Breeden was asked if Lord Black had ever made any threats in the weeks after he was confronted with evidence by the special committee that he and other senior executives had received unauthorised payments of $32m (£17m) arising from a number of deals entered into by Hollinger.
He said that "on many occasions" Lord Black "would casually begin meetings by suggesting that he would sue every member of the board if they did not go along with everything he wanted".
Mr Breeden described a meeting at the law offices of Sullivan and Cromwell with himself, Lord Black and other directors present, where Lord Black made repeated direct threats. Admitting he was paraphrasing, he said the peer intimated that he would "fix their wagons good". Among those threatened was Raymond Seitz, a former US ambassador to Britain appointed by Lord Black to the Hollinger board last summer, who participated in the special committee.
At that meeting, Lord Black "glared" at the participants, Mr Breeden said, "telling us he had every intention of bringing action against every member of the special committee and that he didn't care what the defamation laws were in the US, because in the UK and Canada they were different". Lord Black last week sued members of the board for defamation in a court in Ontario, Canada.
Mr Breedon said that Lord Black targeted Mr Seitz, saying "he knew where Ray Seitz had property in the UK" and that he would take action to have it seized. "I frankly wanted to get up and leave the room at that point," he said.
Soon afterwards, Mr Breeden tangled with Gregory Joseph, a lawyer for Lord Black, who underlined to the court that no indictments, or charges, had been filed against any of the protagonists in the case. Mr Breeden swiftly replied, "no indictments yet", which earned him a reprimand from Mr Joseph for playing to the press gallery. Mr Breeden went on to say that they were "in the early stages of the case" and that future charges against any of the players could therefore not be ruled out.
The exchanges set the stage for high drama today when Lord Black will testify. Hollinger is suing him for allegedly reneging on an agreement of 15 November last year under which he would pay back $7.2m he is alleged to have wrongly received and would not interfere with a strategic review of the company, possibly leading to a sale of assets including the newspaper titles.
Mr Seitz said on the stand yesterday that Lord Black had failed to fulfil the terms of the agreement, noting that he had not refunded any of the money. "We had a perfectly good agreement," Mr Seitz said. "It became clear, in my view, Mr Black was reneging on several parts of that."
Hollinger says the agreement was also meant to prevent Lord Black from pursuing any deals of his own. The company was stunned in mid-January when Lord Black announced he was selling his controlling interest in Hollinger, held through Hollinger Inc, a holding company in Toronto, to Press Holdings International, owned by the Barclays. Hollinger is asking the court to block that sale.