CHICAGO (CN) – Former newspaper CEO Conrad Black claims the man he blames for putting him in federal prison is squeezing him out of a newspaper publishing company they co-own.
Black, a Canadian citizen who refers to himself as Lord Black in his complaint in Cook County Court, claims his former business partner David Radler and the directors of Horizon Publications, who “obey Radler’s commands,” diluted and devalued his shares when they sold company stock to straw shareholders.
Black, 67, a member of the British House of Lords, at one time controlled Hollinger International, the third-largest newspaper conglomerate in the world. It published the Chicago Sun Times, Canada’s National Post, the Jerusalem Post, Britain’s Daily Telegraph, and hundreds of small papers.
Black and Radler, who was Hollinger’s chief operating officer, were convicted of fraud in 2007 for scheming to steal from the Chicago-based newspaper publisher and its investors during the sale of more than $3 billion in assets.
In his complaint against Horizon, Radler and others, Black claims that to “minimize possible jail time for himself, Radler chose to lie and betray Lord Black. Radler entered into a cooperation agreement with the government, and proceeded, according to CBCC [Conrad Black Capital Corp.], to testify falsely at the criminal trial against Lord Black and the other defendants, which lasted over three months in 2007.”
Radler was sentenced to 29 months in federal prison, but wound up serving only 10 months after he was transferred to Canada.
Black was convicted of three counts of mail fraud and one count of obstruction of justice. His 6-year sentence was reduced to 3 after appeal. The 7th Circuit overturned two counts in October 2010 and granted him bail. In June this year he was resentenced for mail fraud and obstruction of justice, and sent back to prison.
Black says Radler, who owns more than half of Horizon, used his 2007 criminal conviction and his incarceration in Florida as an opportunity to squeeze out plaintiff Conrad Black Capital Corp. and its 27 percent stake in the Marion, Ill.-based publishing company.
Black claims Radler is using his “infamous Cain-like betrayal” to block Conrad Black Capital from selling its stock in Horizon, which publishes community newspapers in 15 states and two Canadian provinces.
To ease the burden of his $63.4 million fraud settlement with Hollinger, now the Sun-Times Media Group, Black claims, Radler increased Horizon’s part of the settlement by millions of dollars. Black claims the self-dealing arrangement dried up Horizon’s cash resources, forcing it to borrow money.
Black claims Horizon denied him access to its financial records, calling his request a “fishing expedition.”
Conrad Black Capital Corp. seeks $5 million in compensatory damages and $15 million in punitive damages, alleging breach of contract, breach of fiduciary duties and accounting. It is represented by William Kane with Baker & Hostetler.