Hollinger Incorporated [H-Inc], the Canadian holding company through which Lord Conrad Black of Crossharbour controls his newspaper publishing empire Hollinger International [H-Intl], on Monday failed to make a substantial debt repayment by the due date, March 1.
The sum due, in the region of $7 million ($5.73m; £3.81m), is interest on a $120m bond. But H-Inc insists that failure to make the payment does not technically constitute a default provided the amount is paid before the end of March.
Black had hoped to ameliorate his liquidity problems by selling H-Inc for $466.5m to reclusive UK businessmen, the joined-at-the-wallet Barclay twins.
But the peer's luck ran out on him last week when the deal was prohibited by the Delaware Court of Chancery where Judge Leo Strine slammed His Lordship for "persistently and seriously" breaching his fiduciary duty [WAMN: 27-Feb-04].
• However, Black's Monday wasn't entirely Black Monday. That day a federal judge in the Chicago District Court froze an order imposed by the US Securities and Exchange Commission to restrict the peer's right to change the composition of the H-Intl board.
Judge Blanche M Manning said the order would remain on ice until both sides had a chance to present their case before her. She will then determine a crucial issue -- whether Black can depose the board of H-Intl in order to prevent it from selling or breaking-up the company.
• Separately, Black and a number of his co-directors face a further inquiry into allegations that they sold H-Intl newspapers to themselves at below market prices.
H-Intl's special board committee is currently investigating all aspects of the peer's corporate governance and will report its findings to the full board and shareholders towards the end of this month.
High on its agenda is the alleged sale at low prices of certain H-Intl newspaper properties to private companies in which Black and his lieutenants had a substantial interest.
Data sourced from multiple origins; additional content by WARC staff