Media tycoon Conrad Black and longtime business partner David Radler have resigned as officers and directors of Ravelston Corp., the private holding company behind the troubled Hollinger media empire.
A lawyer for Ravelston told Ontario Superior Court about the resignations Wednesday as the firm sought bankruptcy-court protection from creditors.
According to an affidavit filed by Black's longtime deputy, Peter White, Ravelston Corp. and subsidiary Ravelston Management Inc. are seeking bankruptcy protection because they are insolvent and faced with "an immediate financial crisis."
White said Ravelston has been drained of cash because it no longer receives multimillion-dollar management fees from its subsidiaries Hollinger Inc. and Chicago-based newspaper operator Hollinger International Inc.
Most of the fees were halted in 2003 after a special committee of Hollinger International directors alleged that Black and a team of executives had improperly received more than $32 million in payments.
Since then, the executives have faced additional allegations of securities fraud by U.S. regulators and they are also under criminal investigation by the U.S. Justice Department.
The Ontario Securities Commission has also restricted the ability of various individuals and companies, including Black, the two Hollingers and Ravelston, from buying or selling shares of the various companies.
On Tuesday, the Delaware Supreme Court upheld a scathing ruling brought down more than a year ago against Black. The Feb. 26, 2004 ruling blocked Black's plan to sell control of his publishing empire to the Barclay brothers of Britain.
The court also ruled against an appeal by Toronto-headquartered Hollinger Inc., the holding company at the center of Black's web of corporate holdings.
Chancery Court Judge Leo Strine found that Black had consistently violated his duties to Hollinger International Inc., the U.S.-based operating company he controlled, which at the time owned the since-sold London Telegraph and Jerusalem Post, as well as the Chicago Sun-Times.
