Black tells US court to back sale

Black says Hollinger's directors have no right to block the sale

Media tycoon Conrad Black has defended his attempt to sell his newspaper empire before a US court.

Lord Black wants his controlling stake in Hollinger International, owner of the Daily Telegraph and other papers, to go to the Barclay brothers.

But the firm's board wants the court to stop the deal, saying he took multi-million dollar unapproved payments.

In edgy testimony, Lord Black said he had been coerced into resigning and agreeing to return some of the money.

'No duty'

On the stand in the court in Wilmington, Delaware, Lord Black was unrepentant about his dispute with Hollinger International - but was visibly rattled by tough questioning.

His papers, he said, were his "life's work".

"It is not what I want to do to sell it," he told the court in a shaking voice, as Hollinger International's lawyer throughout referred to him as "Mr Black".

He acknowledged that he had signed some official tax documents which later turned out to be inaccurate.

But he insisted he had been without key information over the weekend during which the resignation from the board was arranged.

The Barclay brothers say they would be good managers

"Under the circumstances, I... deferred to the judgement of people whom I knew, had worked with, and believed I should in fact trust," he told the court.

With the benefit of hindsight, "I do not think any reasonable person in my position at this time would conclude that I have a legal or moral duty to repay the money."

On offer

The convoluted corporate structure - whereby Hollinger Inc, a company Lord Black controls, hold 30% of Hollinger International's shares but 70% of the voting rights - was "quite frequently done" in the newspaper business, he told the court.

By selling Hollinger Inc to the Barclays, he would effectively offload his empire before Hollinger International's board could complete its inquiry into what it sees as illegitimate fees collected by Lord Black and Hollinger Inc directors.

The brothers would be solid owners, who would keep "charlatans and bottom feeders" away from the titles.

The Barclay twins, owners of Press Holdings International Ltd and a number of hotels, are pushing ahead with their plans to buy the Hollinger stake.

They made a bid for the company on 28 January.

Countersuits

But the Hollinger International board wants a say over who can buy the controlling stake, and would prefer to auction the assets itself.

It has requested Delaware Chancery Court overturn by-law changes proposed by Lord Black that would block it from intervening in the sale.

The Delaware suit claims Lord Black owes the company $7.2m in unauthorised payments to himself.

Lord Black agreed in November not to sell his Hollinger shares, unless he faced a serious default, and to repay $850,000.

But in a countersuit, Lord Black says there is no obligation to do either as the board of Hollinger, which he founded three decades ago, had tricked him into making the deal.

The judge in charge of the Delaware case has said he will make a decision by 27 February; the proposed closing date of the Barclay offer is 2 March.

The Hollinger board has also sued Lord Black and three of the firm's former executives in a New York federal court in an attempt to recover $200m allegedly taken via unauthorised transfers of funds.