LAWFUEL – The controversial ‘non compete’ fees charged by former Holli…

LAWFUEL – The controversial ‘non compete’ fees charged by former Hollinger International Inc. Chairman Conrad Black from the sale of company assets, the focus of his fraud and racketeering trial, were commonly used to lower Canadian tax payments, a tax expert said, Bloombergs report.

The testimony by Ralph Neville supported defense claims that such agreements were routine and paid to individuals rather than companies. Black, 62, former Chief Financial Officer John Boultbee, 63, and ex-Vice President Peter Atkinson, 60, are accused of stealing $60 million from the company in part by disguising it as noncompete fees. Black faces 20 years in prison if convicted of the most serious counts.

Buyers of assets are usually “concerned about the individuals behind the company and their expertise,” and wanted noncompete payments, Neville told jurors today in Chicago federal court. “It’s rare that a company would sign a noncompete.”

The jury may begin deliberations in the trial, now in its 12th week, later this month. Hollinger was once the world’s third largest publisher of English language newspapers including the Chicago Sun-Times, Canada’s National Post, the Jerusalem Post and the U.K.’s Daily Telegraph. Prosecutors claim the defendants stole from the company as they engineered its sale of more than $3 billion in assets between 1998 and 2001.

Prosecutors have accused the defendants of illegally diverting the noncompete payments, which they say should have gone to shareholders. The prosecutors also allege Black withheld the information from Hollinger’s independent directors.

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