Lump of coal

Posted by on Dec 27, 2009 in Brian's Blog | 1 comment

Why is the mainstream media not covering this story? Why have The Globe and Mail, CBC, National Post, Maclean’s et al seemingly missed out on the fact that Hollinger Publishing—Conrad Black’s former newspaper holdings company—has been forced into bankruptcy protection? Why have these national news organizations not reported that more than 3,000 retired newspaper workers—former employees of the Montreal Gazette, Vancouver Sun, Calgary Herald, Edmonton Journal, Ottawa Citizen and other papers now owned by Canwest—were advised by letter just before Christmas that their pension and benefit plans could be in jeopardy?

There are many more questions that demand immediate answers:

· What happened to the $3.5 billion that Hollinger received for the sale of its newspapers to Canwest in 2000? In a court filing (Hollinger Canadian Publishing Holdings Co., File No. 09-8503-00CL. Ontario Superior Court of Justice —Toronto), the company says it has no assets and about $24.5 CAD million in cash. We do know what may have happened to about $6.1 million of it (currently the subject of a US Supreme Court appeal) but what about the rest?

· Why was not some of this money set aside to take care of Hollinger’s existing liabilities when the sale took place?

· What happened to the money that the Southam and Hollinger retirees paid into the pension fund in good faith over a period of many years (in my case, 27)? We were told the money was being held in trust and would not be affected by any future financial problems of the employer. Was this a lie?

· Why did Canwest not assume continuing responsibility for Hollinger’s pension obligations when it bought the company in 2000?

· How did Hollinger expect to continue meeting its pension obligations when, as the letter to retirees now says, it had no “ongoing business activity” to bring new revenue into the company?

· Why did Hollinger tell the retirees in 2007 that the “events” affecting the financial status of the company (i.e. the indictment of certain directors for defrauding shareholders) should not have any impact on the pension and benefit programs administered by the company?

· Why did a Hollinger employee subsequently tell me that my pension plan was fully funded and protected when, in fact, it is “not insured or prefunded”?

· Why is the Sun-Times Media Group, the parent company of Hollinger, not assuming responsibility for the debts of its subsidiary?

Somebody knows the answers. The mainstream media has the resources —and surely as much interest as those of us who used to work for the Southam and Hollinger newspapers—to find out what they are. Canwest is also in what it euphemistically calls “creditor protection.” Could its retirees find themselves in the same situation a few years hence? It’s in their interest to start seeking answers now.

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Copyright 2009 Brian Brennan - Author

One Comment

  1. Good questions, all, Brian. Indeed – where is the Directors' fiduciary responsibility? Apparently it is either misplaced or missing entirely. What seems to be called for here is a class actions suit against the company, the Directors (and possibly former Directors) and likely even Ernst & Young as the supposed "representatives of the plan holders". I doubt very much that E&Y will do the holders any good on any of those fronts.Why were the funds constiuted in such a manner as not to be fully funded? This seems fairly outrageous as the planholders' own funds could well have been misapropriated. Who is going to investigate this? E&Y? Maybe. Where did the $3.5 billion go? It was probably never paid – it was a paper transaction that is now wound up in the the debt of Canwest and likely never will be paid. At least that's my guess…..Class Action suit anyone?

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