Judge Rules Against Black, Greenlights Telegraph Sale

30 July 2004

Four hundred and forty-six years after the death of Mary, Queen of Scots, embattled press tycoon Lord Conrad Black is likely echoing her words over the French army's reoccupation of Calais: "When I am dead and opened, you shall find 'Calais' lying in my heart".

In Black's case, however, the word so engraved is 'Strine'. US Judge Leo Strine, Vice Chancellor of the Delaware Chancery Court.

In a long-awaited ruling Thursday, Strine rejected Black's demand that the shareholders in Hollinger International [H-Intl] -- controlled in voting terms by His Lordship's holding company Hollinger Incorporated [H-Inc] -- are entitled to vote on the £655 million ($1.21bn; €1.00bn) sale of Britain's Telegraph Group.

The case hinged on whether Strine found the UK newspapers to represent "substantially all" of H-Intl's assets; and if their sale would "fundamentally change" the newspaper holding company. The judge did not so find.

The Telegraph properties did not represent "substantially all" of H-Intl's assets, ruled Strine, asking: "Has the judiciary transmogrified the words 'substantially all' . . . into the words 'approximately half'?" He then answered that question. "No!"

The Vice Chancellor continued the exquisite torment of His Lordship, who also stands accused of "gross misuse" of H-Intl's funds, telling him his troubles were all of his own making.

Strine continued to etch his words onto Black's cardiac organ: "Whatever inhibitions [H-Inc] suffers as a controlling stockholder are self-inflicted and provide no basis for it to interfere."

Black, a scrapper to the last, immediately sought an emergency injunction to block the Telegraph deal. But the grains of sand were running out of the top half of the hourglass: the sale of the Telegraph properties is set to close today, Friday.

By 12.00 GMT the newspaper group will become the proud possession of Press Holdings, the British acquisition vehicle of secretive twin tycoons Sir Frederick and Sir David Barclay.

Data sourced from: Times Online (UK); additional content by WARC staff