Legal Conundrum Ensnares Lord Black And Associates

Nothing seems to be going right for Lord Conrad Black these days. The mastermind behind a media empire that once stretched from Europe and Australia to Canada and the United States is currently ensnared in a legal quagmire that could cost him his freedom.

Lord Black is a wanted man in both Canada and the United States, with investigators tripping over each other in search of evidence that could put the wealthy executive behind bars. The problem is that although both the United States and Canada respect due process, they treat the right to refuse self-incrimination very differently. And those differences can trap the unwary.

Around the same time, the U.S. attorney's office in Chicago commenced a criminal investigation dealing with the allegations in the Breeden report.

Meanwhile in September 2004, Catalyst, a shareholder in Hollinger Inc., convinced Justice Colin Campbell of the Ontario Superior Court to order an inspection of various transactions at the parent company. These included the sale of three corporate jets; management fees paid to Black's personal holding company; noncompetition payments received by Hollinger Inc. amounting to $16.5 million; and real estate transactions at Hollinger subsidiary Domgroup Ltd.

Campbell suggested the lawyers find another way--apart from examining the witnesses--to resolve the issue. The answers to the questions E&Y wished to ask, he suggested, might appear after the firm finished examining the documents or interviewed other former Hollinger officials such as Peter Atkinson, Peter White and Black's wife, Barbara Amiel Black, who had agreed to testify about their knowledge of the transactions.

Griffin, agreed, at least temporarily, that E&Y would continue to investigate without conducting the examinations. Griffin made it clear, however, that when E&Y finished poring through the documents, he would renew his application to examine the witnesses. At press time, that had not yet happened.


Julius Melnitzer

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