TORONTO - Hollinger Inc., the holding company that was at the centre of Conrad Black's collapsed newspaper empire, has filed for bankruptcy-court protection while moving to tighten control over its main remaining asset, a stake in Sun-Times Media Group Inc.
The Toronto-based company said Wednesday it has acted to remove three directors from the board of Sun-Times Media, which owns the Chicago Sun-Times and an assortment of smaller publications in the Chicago area.
At the same time, Hollinger is expanding the board to 11 members with the addition of six of its nominees, including Hollinger CEO Wesley Voorheis, chief financial officer William Aziz, and Peter Dey, former Hollinger director and former Ontario Securities Commission chairman.
Voorheis cited the decline in value of Sun-Times stock, in which Hollinger holds a 19.7 per cent equity interest and 70 per cent voting power.
"We have always believed that Sun-Times should implement a formal strategic process to enhance value for all Sun-Times shareholders,'' Voorheis stated.
"We do not intend to interfere in any way with the mandate of the special committee of the Sun-Times board of directors, which will deal with the claims between Sun-Times and Hollinger, or the special monitor, Mr. Richard Breeden.''
The application for a court-supervised restructuring under the Companies' Creditors Arrangement Act in Canada and Chapter 15 of the U.S. Bankruptcy Code is aimed at giving Hollinger and its subsidiaries "an opportunity to facilitate a restructuring of their assets and affairs,'' the company stated.
Trading in Hollinger shares was temporarily halted on the Toronto stock market.
