Hollinger Intl seeks €1bn damages from Black

Publishing giant Hollinger International is seeking more than $1.25bn (€1.05bn) in damages in an amended legal action against former Daily Telegraph boss Conrad Black and other former executives claiming new financial wrongdoing.

The civil lawsuit accuses Black, Hollinger’s former chairman and controlling shareholder, and other executives, of taking part in a racketeering scheme when they sold newspapers for less than their market value in exchange for improperly obtained non-competition fees and other payments.

The company said its new lawsuit was filed yesterday in federal court in Chicago.

Black was forced out as Hollinger International’s chief executive last November after a board of directors’ committee discovered alleged unauthorised or unreported payments paid to Black and three other executives, as well as to Hollinger Inc, a Canadian holding company that Black controls.

He was removed as Hollinger International chairman in January.

The initial complaint filed in January by Hollinger International sought more than €196m in damages.

The amended complaint now seeks to triple damages of more than €377m because of the alleged racketeering, the company says.

Hollinger International owns the Telegraph, the Chicago Sun-Times and the Jerusalem Post.

Toronto-based Ravelston Corporation, a private company controlled by Black and a defendant in the lawsuit, called the addition of racketeering claims "tabloid journalism masquerading as law".

“The vast majority of the agreements and transactions to which Hollinger International is apparently objecting were reviewed and approved by its independent directors,” Ravelston said in a statement.

The company said it had not been served with the amended complaint as of last night.

Hollinger International spokeswoman Molly Morse said she could not provide a copy of the amended lawsuit and she declined to comment further.

The improper payments Black and others are accused of receiving were purportedly for non-compete agreements connected with the sale of some of the company’s newspapers.

Those agreements guarantee a buyer of a newspaper that the seller will not immediately re-enter the same market.

The original lawsuit alleged the payments should have gone to the company.

Keeping the non-compete payments and fees amounted to a breach of the Racketeer Influenced and Corrupt Organisations Act, or RICO, Hollinger International said in its amended lawsuit.

The federal RICO Act originally was aimed at organised crime but includes provisions for civil cases.