Hollinger to Pick Up Tab for Black's Legal Expenses

19 April 2006

Lord Conrad Black, former chairman/ceo of Hollinger International, Hollinger Incorporated and Britain's Telegraph Group Newspapers has clearly not lost his persuasive ways despite having fallen on hard times.

Currently enjoying his freedom on a $20 million (€16.3m; £11.29m) bail bond secured by the proceeds from selling his New York apartment and a house in Palm Beach, Florida, Black faces a US criminal case alleging that he and others looted the company of $84 million.

The legal fees associated with this - and various other civil cases in which Black is named - are potentially eyewatering. US lawyers, after all, have families, mansions and LLCs to maintain.

Now take a deep breath. What follows is worthy of the famed Stranger than Fiction cartoon strip.

His Lordship has compelled one of the primary litigants - none other than Hollinger International - to pay 75% of the legal fees associated with the criminal case plus 50% of the bill for all other matters pending against him, including a civil suit filed by the US Securities and Exchange Commission.

Hollinger's apparent shriving springs not from inclination but litigation, Black having filed suit against his former company in March 2004 to demand advances to cover his legal costs.

Despite Hollinger's plea that the peer had breached his fiduciary duties, the parties agreed a settlement under which Hollinger picks up the legal tab unless it can be shown that Black is not indemnified by the company's insurers.

Should the insurers contest that liability, His Lordship may have to sell another few mansions. But he has at least a year's grace before calling in the realtors.

The case is not due to be heard in until March next year and is expected to last at least three months. Until then, Hollinger's long-suffering shareholders must pay up.

Data sourced from Sydney Morning Herald; additional content by WARC staff