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Newspaper lawyer refused to wire money

March 28, 2007|From the Associated Press

CHICAGO — An attorney for a community newspaper group testified Tuesday that he once refused to change a major business deal at the last minute that would send $9.5 million to media mogul Conrad Black and three of his associates.

"At the end of the day, I did not feel comfortable wiring money from this closing to individuals, two of whom I did not know from Adam's house cat," attorney Thomas Barnes Henson of Charlotte, N.C., testified.

Black, 62, and three other former executives are charged with swindling the Hollinger International newspaper empire out of millions of dollars by selling community papers and pocketing money from the buyers in exchange for signed contracts promising not to compete in markets where the papers circulated.

Federal prosecutors say there is nothing wrong with such "noncompete" payments but that those funds should have gone to Hollinger shareholders.

The trial, in its second week, has focused on a $433.8-million sale of community papers by Hollinger to Community Newspaper Holdings Inc. in 1999 and another sale that was worth nearly $93 million to the same company in 2000.

Executives of Community Newspaper Holdings testified Monday that they wanted a noncompete agreement from Hollinger International but had no interest in such an agreement with Hollinger Inc., a separate, Toronto-based company controlled by Black. Henson said Monday that Hollinger International, based in Chicago, had pressed to include money for the Canadian holding company, and his firm did so as "a throw-in."

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