Thursday, January 29, 2009

Not enough to save Canwest

and it barely moved the stock. But is this a big enough financial kick in the teeth to kill the Chicago Sun-Times, the tabloid No. 2 paper of Chicagoland?

Sun-Times owner ordered to pay $42 million
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January 29, 2009

BY DAVID ROEDER droeder@suntimes.com

The owner of the Chicago Sun-Times said Thursday it has been ordered to pay about $42 million to settle a five-year old dispute with a Canadian company.

An arbitrator rendered the decision against Sun-Times Media Group Inc. in a case involving its 2000 sale of newspapers to CanWest Global Communications Corp. The award was $51 million in Canadian dollars, or about $42 million in U.S. currency, and does not include interest and costs still to be determined.

Sun-Times said it has escrow accounts that as of Sept. 30, 2008, totaled more than $30 million. The company also said it held about $99 million in cash as of that date, but that amount is now believed to be sharply lower because of continued losses due to a poor market for advertising.

Cyrus Freidheim Jr., chief executive of Sun-Times Media Group, said, ³We are evaluating our options with respect to the arbitration award, including the possibility of an appeal upon the completion of the arbitration, and we are in the process of assessing the likely impact of any final arbitration award on our financial condition.² The arbitration began in late 2003.

CanWest said Sun-Times has a right to appeal the decision to the Ontario Superior Court within 30 days of a final order. CanWest also said it will argue that interest costs should accrue as of Aug. 31, 2000.

The dispute dates from the practices of Conrad Black, who was imprisoned after being convicted of paying himself illegal bonuses when he ran the Sun-Times owner, then called Hollinger International Inc.

Sun-Times Media Group also owns major suburban dailies and weeklies throughout the Chicago area.

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