Hollinger seeks extra $1bn damages and accuses Black of ‘racketeering’

HOLLINGER INTERNATIONAL has accused ousted chief Conrad Black and others of a “pattern of racketeering” in a revised lawsuit over alleged financial wrongdoing, and the company said it will seek an additional $1 billion in damages.

The allegations are contained in an amended suit filed by a special committee of the newspaper publisher’s board in a federal court in Chicago. The company accused the defendants of “breaches of fiduciary duty” in connection with the sale of newspapers for less than fair value to private companies controlled by Lord Black and others.

The revised lawsuit is the latest development in a battle between Lord Black, who remains the company’s controlling shareholder, and the publisher of the Daily Telegraph and the Chicago Sun-Times. In January, Hollinger International sued Black and others for more than $200 million, contending they collected improper management fees.

The amended lawsuit seeks the recovery of about $485m, including about $381m in damages and $104m in prejudgment interest. The company said it also is seeking treble damages under the Racketeer Influenced and Corrupt Organisations Act, bringing its total claim to more than $1.25bn.

Ravelston, a Toronto-based company controlled by Black said the addition of the racketeering allegations to the company’s lawsuit “is tabloid journalism masquerading as law.”

“When this complaint is heard in a court of law, the poverty of this case will be plainly demonstrated,” it said.

Lord Black resigned as chief executive in November after the special committee uncovered $32m in disputed payments to him and others. He was removed as chairman in January.

Lord Black has said repeatedly he is innocent of any wrongdoing and has sued the special committee members for defamation in a Canadian court.

The new accusations are believed to surround sales of Hollinger International’s community newspapers.