Hollinger International Inc., publisher of the Chicago Sun-Times and other newspapers, is seeking damages of as much as $17.2 million plus recovery of $5.4 million of compensation from director and former Pentagon official Richard N. Perle.
The company announced late Friday that it was adding Perle as a defendant in a lawsuit that alleges former chief executive Conrad M. Black and chief operating officer F. David Radler looted Hollinger of hundreds of millions of dollars. A copy of the lawsuit, including the details of the claims against Perle, became available yesterday when Hollinger included it in a regulatory filing. It accuses Perle of failing to protect the company's shareholders while he was a member, with Black and Radler, of the board's executive committee.
"It's ludicrous," Perle said in an interview last night, adding that it was awkward for him to respond to the lawsuit because he had not yet seen it.
Perle, an assistant secretary of defense in the Reagan administration, was chairman of a Pentagon advisory board from 2001 to 2003. He has served on the boards of several corporations and has advised others.
At Hollinger, Perle had multiple roles. He joined the board in 1994, was paid $250,000 plus a $50,000 annual bonus to head a subsidiary that invested in Internet companies, and received an additional $3.1 million in incentive payments from the subsidiary, the suit said.
"Because he was receiving millions of dollars in compensation from Hollinger at Black's and Radler's discretion, Perle had a motive to rubber-stamp transactions Black and Radler proposed, and Perle did so, despite his duty to Hollinger's shareholders," the suit alleged.
Black and Radler have denounced the allegations made by a special committee of Hollinger's board of directors, and Black recently won dismissal of claims the company had brought under racketeering law. Black last month sued members of the special committee for defamation.
In addition to recovering Perle's compensation, Hollinger is seeking to hold Perle jointly liable, with Black and Radler, for damages it said it suffered as a result of actions of the executive committee. The suit accuses Perle of improperly approving a loan to Black's holding company as well as a reduction in the interest rate on a loan to the holding company. It also accuses him of signing consent forms for transactions through which Black and Radler allegedly enriched themselves.
"I didn't benefit from any of the transactions that they're talking about," Perle said.
In a statement, a holding company for Black and Radler said Hollinger "continues to attack transactions that were explicitly approved by its Board of Directors."