Newspaper publisher Hollinger International Inc said on Saturday a special committee of its independent directors is suing former chief executive Conrad Black and others for more than $200 million.
Hollinger charged that Black and Hollinger Inc - the Toronto-based holding company through which he controls Hollinger International - together with former executive David Radler, collected unjustified and excessive management fees and altered company books and records to conceal their actions.
"The complaint charges that the defendants diverted and usurped corporate assets and opportunities from the company through systematic breaches of fiduciary duties owed to the company and its non-controlling public shareholders," Hollinger said in a statement.
The company, which owns the Chicago Sun-Times and Britain's Daily Telegraph among other newspapers, said the lawsuit, filed in US District Court in Manhattan, alleges conduct by the defendants including "altering the company's books and records." It also accuses them of "misrepresenting or omitting to provide material information in statements to the company's independent directors or to public shareholders."
Black, a member of Britain's House of Lords, resigned as Hollinger International's chief executive in November after the company disclosed that he, Radler and several other executives had received $32.2 million in payments that were not authorised by the board of directors.
A lawyer for Black, John Warden, said in a statement that lawsuit was an attempt by the special committee to draw attention away from new evidence that contradicts earlier statements by independent board members concerning certain payments to Black.
"We believe this lawsuit is an attempt by the special committee now to divert attention from the fallacy of their earlier claims," Warden said.
Black is still chairman of Hollinger International and "has no plans to resign" from that position, his spokesman Jim Badenhausen told Reuters.
Under an agreement reached with the company when he resigned as CEO, Black faces a Sunday deadline to start paying back $850,000 of the roughly $7 million in payments the company deemed unauthorised in November. His spokesman declined to say whether Black intended to meet the deadline.
LONDON: UK business brothers David and Frederick Barclay on Sunday said they had agreed to buy media mogul Conrad Black's controlling stake in publisher Hollinger International, just hours after he was sued by his own company.
The Barclay brothers said they would launch a C$423.8 million offer to buy all of the Toronto-based holding company Hollinger Inc, which controls about three-quarters of the voting stock of Hollinger International.
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