Hollinger Agrees to Pay Some of Boultbee's Legal Fees
By Jef Feeley
(Corrects lawyers' clients in story published Jan. 11.)
Jan. 11 (Bloomberg) -- Hollinger International Inc., the
Chicago Sun-Times' publisher, agreed to pay some legal costs of
former finance chief John Boultbee, who is accused of helping ex-
Chief Executive Officer Conrad Black loot the company.
The payment will settle Boultbee's lawsuit demanding that
Hollinger International cover more than $5 million in attorney
fees, according to a Delaware Chancery Court filing. A grand jury
indicted Boultbee, 62, on fraud charges in December.
``The parties have reached a settlement in principle,'
David Eagle, a lawyer with Wilmington, Delaware-based Klehr,
Harrison, Harvey, Branzburg & Ellers who represents Boultbee,
said in a Jan. 5 letter filed with the court. The accord requires
approval from Chancery Court Judge Leo Strine Jr.
Black, 61, who built Hollinger International into the third-
largest publisher of English-language newspapers, pleaded not
guilty last month to federal charges of fraud, money laundering
and obstruction of justice. He is accused of stealing
$83.8 million from the Chicago-based company to pay for his
William Johnston, a lawyer for Hollinger International with
the Wilmington firm Young Conaway Stargatt & Taylor, didn't
return phone calls for comment. Molly Morse, Hollinger
International's spokeswoman, declined to comment today on the
Hollinger International is suing Black, his holding company,
Boultbee and other former officials to recover $542 million it
says Black and associates stole by collecting bogus non-compete
payments and other fees. Black and Boultbee deny the allegations.
Toronto-based Hollinger Inc., Black's holding company, owns
18 percent of Hollinger International's regular shares and all of
its voting shares. A Canadian judge has barred Black from
exerting any control over the unit's management.
Boultbee filed a suit in August claiming Hollinger
International is obligated to pay lawyers defending him from
criminal and civil claims in the U.S. and Canada under the
company's insurance for officers and directors.
The New York-based law firm Morvillo, Abramowitz, Grand,
Iason & Silberberg racked up $5.1 million in fees representing
Boultbee in investigations by federal prosecutors, as well as the
U.S. Securities and Exchange Commission and Canadian securitiesregulators, according to court papers.
Robert Morvillo, who heads the firm, represented home-
decorating guru Martha Stewart when she was convicted of
obstruction of justice charges in March 2004.
The Jan. 5 filing doesn't say how much of Boultbee's legal
fees will be covered by the company. In a Dec. 22 letter to
Strine, Johnston said both sides were still negotiating a formula
to decide the figure. The company will pay ``already-submitted
invoices' within 30 days of the final agreement, according to
Black also has sued in Delaware to recoup money on spent on
defense lawyers. That case, filed in May and seeking $6.8
million, is set for trial in March. Hollinger International
officials said last month that as of September 2004, they had
paid $9 million toward Black's total defense costs.
The case is John A. Boultbee v. Hollinger International
Inc., No. 1585-N, Delaware Chancery Court.
--With reporting by Joe Schneider in Toronto. Editor: Farr.