Hollinger judge clears way for Black's return

THE US judge who blocked Lord Black from interfering in Hollinger International's sale of the Telegraph newspaper titles, has ruled that the former media tycoon will be free to intervene in Hollinger's restructuring from the end of October.

The ruling is one of the first in Black's favour following a string of adverse court decisions this year that have prevented him from intervening in the sale of his company's leading assets.

Judge Leo Strine of the Delaware Chancery Court extended his earlier ban on Black's interference to 31 October, but is allowing the injunction to expire after that.

He said he hoped Hollinger and Black could reach an out-of-court settlement before then.

Insiders said that although Black may try to prevent Hollinger disposing of assets after October, he was unlikely to be in time to prevent the Telegraph sale.

Hollinger may announce the winner of its auction of the UK newspaper titles as early as next week. Frontrunners include the Daily Mail and General Trust, owner of the Evening Standard, private equity group CVC, the Barclay brothers and 3i, the venture capitalist firm.

However, Black may be able to influence the fate of other Hollinger assets such as the Chicago Sun-Times and the Jerusalem Post.

The company had at first attempted to sell all of its assets together, but found that potential buyers were only interested in the Telegraph.

Once the UK papers have been sold, however, it may try to sell off the other assets piecemeal.

Earlier this year, Judge Strine prevented Black's company, Hollinger Inc, which owns twothirds of the voting rights in Hollinger International, from interfering in Hollinger International's assets sale.

But although the court ruling may now give Black some power over Hollinger after October, his ability to intervene may be limited as he grapples with other substantial problems.

Judge Strine also ordered Black to repay Hollinger nearly $30 million (Pounds 16.3 million) in cash rather than stock options. The decision could have a severe impact on the former mogul's finances.

He was forced to step down as Hollinger's chairman earlier this year after it emerged the company paid him and several colleagues million of dollars in fees that were not approved by the board.

The company has now charged him with racketeering and is seeking to recover $1.25 billion from him and his associates.

Black also faces an investigation by the Securities and Exchange Commission.

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