'I Am An Honest Man,' Black Tells Delaware Court

23 February 2004

"I have been characterized and stigmatized as an embezzler," Lord Conrad Black of Crossharbour complained Friday to the Delaware Court of Chancery. "I am trying to retrieve my reputation as an honest man."

Judge Leo Strine must rule by February 27 whether Black can sell his privately held company Hollinger Incorporated [H-Inc] -- and crucially its 73% voting interest in Hollinger International [H-Intl] -- to the clamlike British Barclay twins.

Black, giving evidence on the last day of the hearing, defended his labyrinthine financial practices and hit back at former co-directors, accusing them of conspiring against him.

Two other key issues are also before the court: the validity of changes made by Black to company bylaws, intended to reinforce his control over H-Intl; and H-Int's 'poison pill' plan that would enable dissenting shareholders to dilute Black's hegemony.

The special committee formed by the board of H-Intl, a US-registered company, alleges that Black accepted unauthorized payments from third parties that rightly belong to the company, some of which in November he agreed to repay. He has yet to do so.

The committee also claims the former chairman/ceo agreed to relinquish the chief executive role and support a strategic review led by the banker, Lazard. He additionally pledged not to "consummate" any deal at the H-Inc level which could undermine Lazard.

Black told the court that although he agreed to repay $7.2 million in November, he later realized that questions remained as to whether these were unauthorized. He also claimed that H-Inc is on the brink of insolvency, a situation which allows him under the November agreement to sell his shares in the holding company.

Lord Black's honor -- and much else -- now rests with Judge Strine.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff