Yup, Conrad Black can sue

Jacquie McNish and Cigdem Iltan -

The Court of Appeal of Ontario has granted Conrad Black the right to pursue a libel action in Ontario against the directors and officers who accused him of running a “corporate kleptocracy” at Hollinger International Inc.

In its ruling a panel of three appeal court judges said that although Lord Black is no longer a citizen of Canada ““it would be unfair to deprive him of a trial before the community in which his reputation has been damaged …. there is no unfairness in requiring the defendants – sophisticated businessmen who targeted the Canadian media and who reasonably foresaw the possibility that their conduct in posting the statements on the Internet would cause damage to Black’s reputation in Ontario – to defend defamation actions brought in Ontario, where both the tort and the damages occurred.”

Lord Black launched a libel action in 2004 against nine former Hollinger directors and officers, including former Securities and Exchange Commission chairman Richard Breeden, who led an internal investigation into the conduct of the companies senior executives. Other officers named in Lord Black’s lawsuit are: Canadian-based director Graham Savage; former Illinois Governor James Thompson, and former U.S. Secretary of State Henry Kissinger and Richard Burt, Raymond Seitz, Shmuel Meitar, Gordon Paris and Paul Healy.

Lisa Munro, a lawyer for Lord Black, said: “As you can imagine, Mr. Black is very gratified with the decision and is looking forward to going ahead with the trial of his action against Mr. Breeden and the other former Hollinger International directors.”

Lord Black alleges that the Hollinger officials defamed him when they issued a press release and report in 2004 on the company website which accused Lord Black and his executive team of misappropriating more than $200-million (U.S.) from the company by engaging in “repeated and systematic” schemes to wrongfully divert corporate assets to themselves.

The report, which was also filed with U.S. securities regulators, said there were “few parallels to Black and Radler’s brand of self-righteous, and aggressive looting of Hollinger to the exclusion of all other concerns or interests, and irrespective of whether their actions were remotely fair to shareholders.”

The decision upholds a 2009 decision by Ontario Superior Court judge Edward Belobaba who ruled that Lord Black was entitled to pursue the case in Ontario because of his “real and substantial” connection to Ontario.

Lawyers for the defendants argued that Lord Black was wrongly “forum shopping” for a law suit in Canada, where libel laws are stricter than those in the U.S. The defense lawyers argued the libel case should be pursued in the United States because Hollinger International released its report in Chicago, where the company is based.