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New Hollinger Suit Seeks More Damages

Action Asks $1.25 Billion From Former Executives

By David S. Hilzenrath
Washington Post Staff Writer
Saturday, May 8, 2004; Page E02

Hollinger International Inc., owner of the Chicago Sun-Times and other newspapers, said last night that it has filed new charges against some of its directors and former insiders, seeking treble damages of $1.25 billion under a racketeering law.

The original lawsuit, filed in January, sought more than $200 million from former chief executive Conrad M. Black, another top executive and companies through which Black controlled the media company.

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The amended complaint, filed in federal court in Chicago, alleges that company funds were fraudulently diverted when Hollinger sold newspapers to companies controlled by defendants at "less than fair value," the company said in a statement. The company did not release the new complaint and the statement did not name those accused.

"The vast majority of the agreements and transactions to which Hollinger International is apparently objecting were reviewed and approved by its independent directors," Ravelston Corp. Ltd., one of Black's companies and a defendant in the initial suit, said in a statement. "Hollinger International's amending its lawsuit to include allegations of racketeering is tabloid journalism masquerading as law," Ravelston said.

Among the new claims, Hollinger said, are an attempt "to recover certain bonuses paid in connection with the operations of Hollinger Digital LLC." Former Pentagon official Richard N. Perle was co-chairman of the subsidiary, which made investments in Internet and technology companies.

According to a source close to Hollinger, Perle was paid at least $2 million in bonuses over the years at Hollinger Digital, as reported by the New York Times.

Perle said last night that he was not aware of the amended complaint and declined to comment on it. He said employees who worked on particular Hollinger Digital investments were paid bonuses based on a percentage of the profit the company earned on those investments. Losses on other investments did not count against the bonuses, Perle said.

While heading Hollinger Digital, Perle also served as a member of the parent company's board and executive committee.

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