Sun-Times seeks to get suit on track
COURT | Presses to move against Black, others after long delay
Hollinger International, now called Sun-Times Media Group, sued Canadian parent company Hollinger Inc., former CEO Conrad Black, his wife, Barbara Amiel Black, and other former Hollinger executives for alleged fraud against the media company back in January 2004.
Fact finding or "discovery" in the civil suit was halted at the government's request in the summer of 2005 while the criminal case was under way. Black and three other former Hollinger executives were convicted of fraud against the company last month.
Now that the criminal trial is over, Sun-Times Media Group has pressed to move the 3.5-year-old civil suit forward. But the defendants have resisted, by trying to stay the proceedings or extend discovery.
Meanwhile, the Chicago company's stock has fallen to a record closing low Tuesday at $2.80, down 50 cents or 15 percent, on turnover that was more than six times heavier than average daily volume.
Hollinger Inc. filed for bankruptcy protection Aug. 1, and obtained a temporary restraining order from a Delaware court to stay the Sun-Times suit.
Donald Corbett, an attorney for former Hollinger finance chief John Boultbee, argued to U.S. District Judge Blanche Manning on Tuesday that the stay against his client should continue while Boultbee awaits his Nov. 30 sentencing and appeal.
All defendants have told Sun-Times Media Group that even if the court lifts the stay, they need 18 months to complete fact discovery. STMG seeks a Dec. 31 cutoff, a deadline the defendants call "aggressive."
Sun-Times Media Group argued in a court motion that its discovery schedule "is reasonable in light of the extreme delay International has already suffered." STMG called the 18-month request "pure gamesmanship. ... With the criminal trial complete, it is International's turn to seek justice," the STMG motion said.
Abby Rudzin, a lawyer for STMG, told Manning on Tuesday the company would bring a motion to lift the stay against Inc. if it proceeds with counterclaims.
Hearings on both the discovery schedule and the status of the Inc. bankruptcy stay are set for Sept. 6.
Sun-Times Media Group's stock has dropped 29 percent since it reported second-quarter earnings Aug. 8. The Chicago-based company suffered an operating loss of $80.6 million for the second quarter, compared with a loss of $13.7 million for the the same period of 2006.
Net income totaled $528 million in the June quarter, thanks to a favorable settlement with Canadian tax authorities. The company posted net income last year of $20.6 million.
Total revenue fell 12 percent to $94.3 million.