Conrad Black Trial - Issues, Arguments and Chances. Charges and Defence. Opportunities and Challenges

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Updated March 27, 2007. At the time of this writing, there is a 50-50 chance of the trial going either way for Lord Black. This trial should be interesting, educational and entertaining.

Main Charges

Breach of a Fiduciary Duty to Shareholders

Conrad Black is accused of violating his position of trust - his fiduciary duty - with the shareholders of Hollinger International Inc. (HII), during the time he was Chairman and CEO.

Theft of Money Belonging to Shareholders

In a report prepared on behalf of shareholders, Black and his associates are accused of taking more than US$400 million of company funds that belonged to all shareholders. However, the criminal trial is limited to US$80 million of this amount - monies mainly received for non-compete agreements with purchasers of newspapers, media and publishing businesses owned by Hollinger International. Black is also accused of charging personal expenses to HII.


1. Black and his cohorts were legally entitled to the monies taken or received, even if the amounts seem exorbitant. He did not steal from the company - the company was stolen from him.

2. The alleged illegal transactions were approved by the board of directors - directors that included luminaries like Henry Kissinger and Richard Pearle. The chair of a board committee that gave Black approval was James Thompson, former Illinois governor.

3. The non-compete agreements were approved by outside lawyers and auditors.

4. There was full disclosure.

5. Black is a victim of shareholder activism, a smear campaign, corporate governance zealots and a persecution complex following the Enron and Worldcom scandals.


Board Approval for Transactions

The question remains if board approval makes the alleged illegal transactions legal.


Many founders and builders of companies, cannot make the transition from owning and running a private company to governing a publicly owned and traded corporation. As owners of private companies that they had built through their hard work, they were entitled to draw on the earnings and profits of the company as they saw fit. However, when a private company becomes public, they no longer have the freedom to continue that past practice. Many founders are simply unaware of the implications of the changed circumstances.


Powerful Allies and Supporters

Black has powerful and influential friends, especially past directors of Hollinger International who held office during Black's tenure as Chair and CEO. They may stand by him and testify on his behalf. Black's friends and supporters include former British Prime Minister, Mrs. Margaret Thatcher, and Donald Trump. The chair of a board committee that gave Black approval was James Thompson, former Illinois governor. Thompson is probably known to members of Black's jury. He is reputed to have credibility and standing in Chicago.

Good Defence Team

Black has an excellent defence team.

Backlash Against the Power of Government

There is some popular sympathy that Black is a victim of the power of big government. The prosecution runs the risk of overplaying their hand.

Trial Venue- Chicago

Black is not well known in Chicago. This could mean that they do not have to contend with hostile and prejudiced public opinion.

Black's Partner is Expected to be the Prosecutions Star Witness

In a plea bargain with the prosecution, Black's former partner David Radler, has already pleaded guilty and is expected to testify against Conrad Black.


Lack of Board Solidarity

At least one board member, Richard Pearle, told the New York Times that Black duped him.

Defence Team - Too Many Cooks?

Back in December 2005, when Conrad Black pleaded not guilty to criminal fraud charges at a pre-trial hearing, a Chicago federal court made Black sign a waiver acknowledging that he understood that his lawyer, Edward Greenspan, famous as he may be in Canada, was ignorant about US law. As such, if Black loses, he cannot appeal on the grounds that it was his lawyer's fault. Mr. Greenspan is reported to have said, "I love that I've been certified as stupid by the Illinois judge."

Government Prosecutors Usually Win

The success rate for government prosecutors in the Chicago court where Black is facing trial, is over 90%.

Trial Venue- Chicago

A blue-collar town may not be sympathetic to a Lord of the realm charging his wife's handbags as a corporate expense - taking money that could otherwise have gone to pension plans.

Discredited Witnesses

If Black's lawyers can successfully discredit the main prosecution witness, Black's former partner David Radler, Black's chances improve dramatically.