Mar 25, 2008 8:53 pm US/Central
Sun-Times Media Group, Hollinger Reach Settlement
CHICAGO (AP) ―
Hollinger Inc. would relinquish its voting control over the Sun-Times Media Group under a proposed settlement that would end pending litigation between the companies, officials said.
The settlement announced Tuesday would reverse a stock ownership structure dating back to the Conrad Black era that gave Canada-based Hollinger 20 percent of the Sun-Times' stock but 70 percent of its voting shares.
Hollinger would receive 20 percent of regular Class A stock and give up its voting control under the proposal, which is subject to approval by the Ontario Superior Court of Justice and the United States Bankruptcy Court for the District of Delaware.
The deal also calls for the resignations of six directors that Hollinger appointed to the Sun-Times board last summer, and for the Sun-Times to be reimbursed $1 million in legal expenses incurred during the takeover.
The deal would settle all pending legal disputes between the companies, said Tammy Chase, spokeswoman for the Chicago-based Sun-Times.
The Sun-Times Media Group, publisher of the Chicago Sun-Times and dozens of smaller newspapers in the metropolitan area, was known as Hollinger International Inc. until July 2006.
Black, the company's former CEO, is in federal prison for his role in swindling Hollinger International shareholders out of millions of dollars. Tuesday's settlement does not end litigation filed by the Sun-Times against Black, Chase said.
Sun-Times Media Group shares have lost 96 percent of their value since peaking at just above $20 in 2004. The stock was up 15 cents to 95 cents in after-hours trading on Tuesday night.
Hollinger representatives did not immediately return messages Tuesday from The Associated Press.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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