Black's holding company fined
The Canadian holding company that served as the nerve center of media mogul Conrad Black’s newspaper empire was fined $7 million today and ordered to pay $6 million in restitution for its part in a massive shareholder fraud.
The $6 million restitution is to be paid to Sun-Times Media Group, under federal Judge Amy J. St. Eve’s order.
Ravelston Corp., a Toronto-based company that now is in the Canadian equivalent of Chapter 11 bankruptcy reorganization, has so many debts and so little money that there is doubt that either the fine or restitution will ever be paid, company officials said.
‘‘The prospect of any money being paid on the fine or the restitution order I would say is highly remote,’’ said Robert Kofman, Ravelston’s receiver.
Black, 63, and three other men are to be sentenced Dec. 10 their roles in a sweeping fraud scheme that the government says cost shareholders in media giant Hollinger International Inc. $32.5 million.
Ravelston, out of Black’s control since 2005 even though he is the majority shareholder, pleaded guilty in March to one count of fraud involving the sale of Hollinger International newspapers to Forum Communications Inc. for $14 million.
The company admitted that it took part in siphoning some of the proceeds and agreed to pay the $7 million fine.
Conrad Black Capital Corp. still owns 65 percent of the stock.
Black used his stake in Ravelston to control another Canadian holding company, Hollinger Inc., which in turn controlled Hollinger International.
When Black was chairman of Hollinger International, the company owned The Daily Telegraph of London, the Chicago Sun-Times and the Jerusalem Post, as well as hundreds of U.S. and Canadian community newspapers.
Hundreds of community newspapers as well as those in London and Jerusalem have been sold and the company has changed its name to Sun-Times Media Group. The restitution amount of $6 million is to be paid to Sun-Times Media Group, under federal Judge Amy J. St. Eve’s order.
Kofman said $32 million in losses already have been paid to Sun-Times Media Group by various parties to the financial woes that beset the company. But he said that in terms of paying off Ravelston’s bills, ‘‘just to get through the secured debt would take in the range of $60 million.’’
The fine and restitution will be treated as unsecured debt in the Canadian court system.
Black was convicted along with fellow Canadian executives Peter Atkinson and John Boultbee as well as Chicago lawyer Mark Kipnis.
Black’s longtime partner in the newspaper business, F. David Radler, pleaded guilty in the case and became the government’s star witness.
Black and his three co-defendants were found guilty of siphoning money out of a series of newspaper sales and disguising the amounts as ‘‘non-compete’’ payments. Such payments are common in the publishing industry. Sellers promise that in exchange they will not return to the circulation area of the newspapers and go into competition with the new owners.
