Conrad Black, under pressure to resign from the remaining positions in the newspaper empire he built, offered Tuesday to put his shares in Hollinger International Inc.'s parent company into an independent voting trust.
The parent company, Toronto-based Hollinger Inc., said in a statement that Black has offered to put all shares owned by him or Ravelston Corp., a private company he controls, into a voting trust controlled by people who are independent of him and not involved in the extensive litigation surrounding Hollinger.
Black has been ousted as chairman and CEO of Hollinger International after an internal investigation found that he and several associates looted the company's coffers over a seven-year period. The Chicago-based publishing company owns the Chicago Sun-Times and The Jerusalem Post. Until recently, it also owned The Daily Telegraph of London.
Despite his removal from the executive posts, Black remains the controlling shareholder of Hollinger International through his control of the parent company Hollinger Inc., which holds an 18 percent economic stake and 68 percent of the voting power in Hollinger International.
However, Black's ability to exercise actual control over Hollinger International has been curtailed by courts in Delaware and Chicago.
Black's offer to put his control of Hollinger International's parent company into a voting trust appears to be a compromise after a Toronto investment fund asked an Ontario court to remove Black, his wife Barbara Amiel Black and others from their board and management positions at Hollinger Inc.
Hollinger Inc. said Black has offered to set up a voting trust "if it would facilitate the restoration of Hollinger's rights as a shareholder of Hollinger International Inc."
"Once implemented, the right to vote the shares transferred to the voting trust would be exercised only by persons who are not involved in the significant current litigation and a majority of whom would be independent of Lord Black and Ravelston," Hollinger Inc. said.
Black also said the voting trust would remain in effect until all legal actions involving him have resolved. The special committee of Hollinger International's is suing Black and others in an attempt to recover what they say is some $400 million that Black and his associates took from the company.
Black has denied the allegations and is fighting a multi-front legal battle. He has also faced increased pressure to resign his remaining posts at Hollinger Inc., which is also one of the defendants in the suit filed by Hollinger International.
Hollinger Inc. also announced Tuesday that it had named two additional independent directors to its board, bringing the number of independent directors to five.
The 10-member board would now be equally balanced by independent directors and officers of the company allied with Black. The two new Hollinger Inc. directors are Robert Metcalfe and Allan Wakefield.
Metcalfe is the executive vice president and general counsel of Spotnik Mobile Inc., a Canadian high-speed wireless internet company and a subsidiary of Telus Corp.
Wakefield operates a consulting firm specializing in financial and operations advice for startup companies. He has held a number of senior executive positions, including those with Inxight Software Inc., Kestrel Solutions Inc., Spar Aerospace Ltd., Indal Ltd. and Alcan Aluminum Ltd.
