Monday, May 15, 2006

Send lawyers' bills and money

Saturday's Wall Street Journal (subs. req'd) noted that while Lord and Lady Black, Richard Perle, and a few others are long gone from Hollinger International, itself a reduced version of its former Telegraph/Spectator past, their legal problems are still costing the company money:

According to the company's recent SEC filing: "The following legal fees have been advanced on behalf of directors and executive officers who served as such in fiscal year 2005: [Conrad] Black $4,320,420; [Barbara] Amiel Black $857,235; [Richard] Burt $692,538; [Dan] Colson $552,308; [Henry] Kissinger $56,579; [Shmuel] Meitar $159,920; [Richard] Perle $4,655,491 and [James] Thompson $173,339." The company says it will submit bills to its insurer to get reimbursed for the legal fees.

Besides Mr. Black's bill, Mr. Perle's stands out for its size. Mr. Perle didn't respond to an email requesting an explanation of his bills. Mr. Perle is also among the former directors who were served by the SEC with a so-called Wells notice, which allows recipients to respond to the agency before the regulator takes civil action.

Dick Cheney's daughter Elizabeth is running a large slush fund out of the US State Department to promote regime change in Iran, so if Perle somehow gets stuck with this particular legal bill, he could ramp up that element of his activities. Alternatively, with the money he saved from initially threatening to sue Seymour Hersh (" I’m talking to Queen’s Counsel right now,") but then not actually doing so, he might be good for $4.6 million if Hollinger's insurers come after him.

UPDATE: More problems for the Blacks and their associates: Hollinger Inc, the Canadian holding company that controls Hollinger International, is going to cooperate with Patrick Fitzgerald in his prosecution of individuals:

In exchange the U.S. Attorney's office has agreed not to prosecute Hollinger for any crimes committed by its former officers, directors or employees relating to the $16.55 million in non-compete payments diverted from Hollinger International Inc. (HLR) to Hollinger, as long as Hollinger abides by the terms of the cooperation agreement.

Hollinger has acknowledged that one or more of its former officers, directors or employees acted illegally in connection with the $16.55 million in non-compete payments that Hollinger received and that it's responsible for the repayment of that money, which was repaid to Hollinger International Inc. with interest in 2004 pursuant to a judgment in the Delaware Court of Chancery.

Hollinger has a strange structure in which Hollinger International actually publishes newspapers, but control of the company is held by Hollinger Inc, through its "super-voting" equity stake in the company. Black in turn ran Hollinger Inc through other companies and the chain of fees that all this generated is a big part of Paddy Fitz's prosecution.

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