The ruling against Conrad Black’s attempt to stop the sale of the Telegraph newspaper paves the way for the Telegraph sale to close as scheduled on Friday, although Black’s holding company said it would appeal the judge’s decision. Hollinger International last month struck a roughly $1.2 billion deal to sell the Telegraph to the UK’s billionaire Barclay brothers.
It also marks the second time that Vice Chancellor Leo Strine, judge at the Delaware Chancery Court, ruled in favor of Hollinger International this year in its tangled legal dispute with Black, who was ousted as chief executive in November in a dispute over payments he collected from the company.
Hollinger International’s interim Chairman and CEO Gordon Paris said in a statement that the ruling puts the company “in a position to complete this transaction and deliver on our promise to create value for all of our shareholders.”
Black’s Toronto-based holding company Hollinger Inc., (HLGc.TO: Quote, Profile, Research) , which owns about 68 percent of publisher Hollinger International’s voting rights, said it was disappointed by the ruling.
“We regret Vice Chancellor Strine’s decision not to uphold the rights of Hollinger International’s shareholders,” Hollinger Inc. said in a statement.
Besides the Telegraph, Hollinger International also is home to the Chicago Sun-Times and the Jerusalem Post.
In the 93-page ruling, Strine said Chicago-based Hollinger International had fully exposed the Telegraph’s value to the market and received competitive bids, undermining Black’s argument that the sale was not devised after a proper review and should be subject to a shareholder vote.
Strine also struck down Hollinger Inc.’s argument that the Telegraph deal would strip Hollinger International of substantially all of its assets, requiring a shareholder vote under Delaware corporate law.
“(Hollinger) Inc.’s motion for a preliminary injunction motion should be denied,” Strine wrote. “Put simply, after the Telegraph Group is sold, International will retain considerable assets that are capable of generating substantial free cash flow.”