Re: Hollinger: Sun-Times CEO Says Paper Under Review
ok join
----- Original Message ----
From: "dkiesq@aol.com" dkiesq@aol.com
To: jeeproject@yahoo.com
Sent: Friday, November 10, 2006 12:48:59 PM
Subject: Fw: Hollinger: Sun-Times CEO Says Paper Under Review
Please advise if I may tell Ronit that LHW will join.
Sent from my BlackBerry® wireless handheld
-----Original Message-----
From: "Setton, Ronit" Ronit.Setton@cwt.com
Date: Fri, 10 Nov 2006 12:38:57
To:dkiesq@aol.com
Subject: RE: Hollinger: Sun-Times CEO Says Paper Under Review
Darren: I recommend that we join for the reasons stated in this e-mail. I consulted with a coverage lawyer in order to get an independent appraisal of the coverage issues, and also spoke with the Company's coverage counsel again. If Mr. Wexner does not join the suit, there are the following risks. If the carriers should settle the suit with the plaintiffs, that settlement could be confidential and we might not get the benefit of that settlement. Although prior efforts to settle with the excess carriers have been unsuccessful, litigation is unpredictable, and it is possible that there would be a settlement and that we would not get the benefit of that. If the suit goes to judgment, Mr. Wexner would get the benefit of a determination on the rescission issue even if he were not in the lawsuit. However, the excess carriers are expected to raise the personal conduct exclusions in the policies as affirmative defenses or raise this issue in some other manner. These are fact-based and specific to each individual. Thus, there is a possibility that the carriers would force us to adjudicate this issue even if they lose on this issue (which is what would be expected) with respect to the other outside directors. (Note that an adjudication of this issue requires discovery.) We may be forced to adjudicate the personal conduct exclusion with respect to Mr. Wexner in Canada. I asked Company's coverage counsel why they did not mention these points on their call with the outside directors last week, and whether they had raised these points with Meitar's and Kissinger's counsel. They said that they just didn't think of raising it but that they would call Meitar and Kissinger's counsel today to raise it with them. Thus, I recommend that Mr. Wexner join the lawsuit to ensure that if the suit is successful, we get the benefit of it without having to take some additional action. Based on the behavior of the excess carriers so far, I wouldn't put it past them to force the non-plaintiff outside directors to bring a separate suit. They have been aggressive, both in the Canadian litigation and in the position they are taking with respect to coverage of the outside directors in their coverage letter.
Ronit Setton
Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York NY 10281
Ph.: (212) 504-6130
Fax: (212) 504-6666
Ronit.Setton@cwt.com
-----Original Message-----
From: dkiesq@aol.com [mailto:dkiesq@aol.com]
Sent: Friday, November 10, 2006 9:19 AM
To: Setton, Ronit
Subject: Re: Hollinger: Sun-Times CEO Says Paper Under Review
Bottom line: do you believe that LHW's involvement will materially enhance the likelihood of success of the litigation, whether through settlement or adjudication? If not, then why join? If yes, then how?
Darren
Sent from my BlackBerry® wireless handheld
-----Original Message-----
From: "Setton, Ronit" Ronit.Setton@cwt.com
Date: Fri, 10 Nov 2006 09:08:30
To:dkiesq@aol.com
Subject: Fw: Hollinger: Sun-Times CEO Says Paper Under Review
Fyi re financial condition of Hollinger, now known as Sun Times
----- Original Message -----
From: Nelson, Tracy
To: Setton, Ronit
Sent: Fri Nov 10 09:00:16 2006
Subject: Hollinger: Sun-Times CEO Says Paper Under Review
Sun-Times CEO Says Paper Under Review
(AP) CHICAGO
Sun-Times Media Group Inc. is considering a complete overhaul of the Chicago Sun-Times amid a continuing steep decline in advertising and circulation revenue at the city's second-largest newspaper, its chief executive said Thursday.
Gordon Paris' comments on a conference call came a day after the company, which also publishes community newspapers around Chicago, reported a $34.9 million third-quarter loss.
Paris attributed the company's 14 percent decline in overall advertising revenues largely to weakness at the Sun-Times, the largest remaining asset in the former Hollinger International Inc. media empire. He said newspaper print advertising was down about 15 percent, worse than the struggling newspaper industry as a whole.
The CEO, who is stepping down from the post Dec. 29, told analysts the company needs to go beyond the "new media" initiatives and advertising sales reorganization plan that it has already put in place to try to stem the Sun-Times' decline.
"We have begun evaluating alternatives to reposition and re-energize the Sun-Times to address the challenging market and competitive environment," he said.
Paris declined to discuss specific options being reviewed but said general areas include content, demographic targeting, marketing and branding, circulation sales and distribution.
The company said last month it had begun looking at strategic alternatives as a faster-than-anticipated decline in the newspaper market adds to its losses.
Asked about a possible sale of the entire company, Chief Financial Officer Gregory Stoklosa said, "We view all options on the table."
The Sun-Times, like other newspapers, has been losing readers and advertisers to Internet competitors. As it undergoes additional audits required by the Audit Bureau of Circulations, the newspaper did not report circulation figures for the latest six months when the rest of the industry did last month.
Paris said its circulation problems have been compounded by strong competitive moves by the Chicago Tribune, including micro-zoning of advertisements and increased distribution of the Tribune's free tabloid RedEye, from 90,000 to 150,000 copies per day.
"The Tribune's actions have involved significant investments over a number of years, a time when the Sun-Times has had to confront historical disinvestment in the business and the damaging competitive impact of circulation issues as well as unfavorable advertising trends," he said.
He declined to provide details on Sun-Times Media's announcement Wednesday that directors have found preliminary evidence the company misdated stock-option awards from 1999 through 2002. If any misdating is found to have been intentional, the company said it could require the restatement of earlier results.
Paris became CEO in November 2003 following the forced ouster of ex-newspaper tycoon Conrad Black, who is set to go to trial in March on fraud and racketeering charges for allegedly plundering millions of dollars from Hollinger.
It has been a profitable three-year stint for Paris. The company disclosed in a regulatory filing Thursday that he will get $2.7 million in severance pay.
Paris told analysts that the company has spent $136 million on legal fees and expenses since mid-2003.
Shares in the company fell 16 cents or 2.8 percent to $5.58 on the New York Stock Exchange, their lowest closing price ever.
Tracy Nelson
Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, NY 10281
212-993-3182
tracy.nelson@cwt.com
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