CHICAGO: Fallen media baron Lord Conrad Black went ahead with the purchase of a multi-million dollar corporate apartment in New York despite being told the transaction might displease Hollinger Internat-ional [H-Intl] shareholders.
The fraud and racketeering trial of the newspaper firm's former chairman/ceo and three associates, heard from erstwhile head of investor relations Paul Healy that he told His Lordship ". . . For a company that had limited cash flow - which was about $100 million (€74m; £50,7m) at that point [in 1994] - it seemed excessive."
Nonetheless, H-Intl's purchase of the luxury $3m Park Avenue home went ahead, but Black eventually agreed to foot a $2m refurbishment bill from his own pocket. The property was used chiefly by Black and his columnist wife, Barbara Amiel.
The couple had the right to buy it at any time for a fair market value, the court heard.
In November 2000, the media magnate received C$18m in non-compete fees related to H-Intl's sale of most of its Canuck newspapers to CanWest Global Communications.
Healy told the court that he suggested to Black it might be the right time to buy the apartment in an attempt to quieten investors' grumblings about it.
Black allegedly agreed, but said the option called for him to pay cost - namely the $3m shelled out six years earlier. When Healy said he thought the option called for fair market value, Black "rather emphatically said, 'No, it's cost.' "
His Lordship is charged with racketeering, tax evasion, obstruction of justice and fraud, which include accusations that he abused company perks such as the apartment, a company-paid surprise birthday party for his wife and a trip on a company-leased jet to Bora Bora.
He faces up to 101 years in prison and millions of dollars in fines if found guilty. The three other executives on trial face lesser charges. All the defendants deny any wrongdoing.
Data sourced from Financial Times online and globandmail.com; additional content by WARC staff