Tuesday, March 29, 2005

Lord Black and Shareholders' Rights

Lord Conrad Black has been dealt another setback in his efforts to regain control of Hollinger International Inc. The Ontario Securities Commission, which last year suspended all trading by Hollinger executives, has kept kept the freeze in place, blocking his bid to buy out other shareholders at a company meeting scheduled for March 31.
Last year, a study commissioned by the Hollinger board found that Lord Black had looted the company to the tune of $400 million. The
Ontario Securities Commission decision blocks Lord Black from using his ill-gotten gains to take control at the expense of other shareholders.
Lord Black's lawyer characterized the bid for the outstanding shares as the last chance for shareholders to get their money out of the company--a not very subtle threat from someone who has habitually ignored the interests of minority shareholders.
Delaware Chancery Court had blocked Lord Black from seizing control of Hollinger in a coup that would have stripped the board of its governance power.
What this case is about is whether a majority shareholder can act in defiance of the board and shareholders of a publicly traded company.


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