From a report on the opening of Week 2 of the trial, courtesy of 570 News: "Asked if the trial - a showy affair in its opening week - was progressing as he expected, Black replied 'even better.'"
That initial report was written by Romina Maurino. In it, she also discloses that the first witness, Craig Holick, was a no-show, according to Ms. Maurino, so the first witness called was Mike Reed, the ex-CEO of Community Newspaper Holdings, according to her more recent report.
It contains a detailed update, which includes Mr. Reed's testimony about the non-compete agreements in the two Community Newspaper Holdings, Inc. (CNHI) deals. Ms. Maurino reports that Mr. Reed "balked at paying 'non-compete' fees to Hollinger International executives, including Conrad Black,..."
Mr. Reed testified that, for the first deal, he had agreed to a non-compete agreement with Hollinger International, when it was first agreed to by both parties, but not to any other party. Mark Kipnis added Hollinger Inc. to the non-compete before the deal was closed. For the second deal, Reed testified that CNHI refused to put anyone other than Hollinger Int'l in the second non-compete. The updated report itself contains other details.
A further update contains a detail from Edward Genson's cross-examination. From that report: "In cross-examination, Black lawyer Ed Genson suggested that there was no mention in contracts surrounding documents surrounding the deals that the non-competes should only have been paid to Hollinger International." (The architect of the first deal was Mr. Kipnis; the architect of the second one, which Mr. Reed balked at, was Mr. Radler: source.) In that latest report, Ms. Maurino included the name of the next witness expected to testify, Thomas Henson, a name not on the original list of four expected to testify this week (Mr. Holick, Mr. Reed, Bill Paxton and Angela Way,) and contains a new explanation between that discrepancy between the $60 million figure mentioned in Jeffrey Cramer's opening address and the allegation of $83 million in the charges: "In addition to his alleged involvement in the redirection of non-compete payments, he is also accused of misusing about $20 million in corporate funds on personal expenses." Csr. Cramer mentioned the $60 million figure in connection with the non-compete agreements in his address, in which all four defendants were indicted.
Two other reports have been posted. The first, in the Telegraph, contains more detail on the cross-examination of Mr. Reed: "On cross-examination, Mr Reed said he had never met, talked to, or negotiated with Lord Black on the deal and had instead talked to his former partner Mr Radler, who has already pleaded guilty to a single count of fraud." [This report can be found here; it also mentions salacious language.] The second, from the Financial Post, discloses that a "handwritten asterisk on the closing documents" directed that $4.5 million, $4.5 million, $250,000 and $250,000 of the payment on the smaller second deal, with total purchase price of $92 million, be directed (respectively) to Conrad Black, David Radler, John Boultbee and Peter Atkinson. The request, by Mark Kipnis, to divert more than 10% of the sale price to four additional accounts is what got Mr. Reed's attention to the arrangement, especially given the fact that the total non-compete payment allocated for the $92 million sale, in 2000, was $3 million.
The Financial Post report concludes with this excerpt from the cross-examination: "'[The allocation of the non-compete-agreement proceeds] was none of your business,' lawyer Ed Genson said, and Reed agreed."
According to this Bloomberg report, Mr. Reed also testified that "Kipnis wanted the non-compete agreements from Hollinger Inc. and the individuals added them to the deal at no additional cost to Community Newspaper Holdings." This testimony sounds like it was elicited under direct examination; it makes the payment split look like a siphoning of sale proceeds from Hollinger International. In addition, "Reed said [under direct examination] he refused to wire the money because there was no provision for individual payments to the Hollinger executives in the contract."
Also: a lawyer in Whitby, Ontario, takes a crack at explaining what a non-compete agreement is.
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6 comments:
It seems, from this distance, that Black is increasingly justified in his optimism. If he is acquited - Black may very well look to that ridculous Law & Order type photo that the gov. prosecutors posed for as a good omen - Though he'll probably use the word auspices, not oment.
This is just a guess - an armchair guess - that the prosecutors are making many tactical errors. They are focusing too much - in a patronizing way, it seems - on the derivative aspects of the corporate structure, rather than the corporate structure of International itself.
Also - Black's trash talking and fancy language could very well impress working class juries, if contextualized properly and if juries are clear on who he was trashing and who is enemies were.
But - we're just musing on what we read from a variety of pro and anti Black blogs and news. so maybe we are missing something. But regardless - if Sussman was just pretending not to know the the word "calumny" we think the jury will pick up on that and discount him a bit.
You may be on to something. The prosecution has been hapless at times, and Michael Reed's testimony didn't damage the defense's contention that David Radler was responsible for anything illegal.
Thanks for the comment, and for stopping by.
It seems the crux of the case againt Black - if you read the Indictment - is that the structure of his controlling minority interesting in International led to inevitable conflicts and those inevitable conflicts led to the particular violations and then the obfuscations.
In other words = Delawate corporate law stipulates that controlling shareholders and related parties must act a certain way - But the nature of Black and Radler's investment meant that International was often in conflict with Inc amd Ravelston.
In other words - he had to operate against International otherwise his interests in Inc and Ravelston would be harmed - and they had an equity interest in International.
Every alleged violation stems from this - If the jury can be convinced that the structure was corrupt, then everything else would follow. But it seems the prosecutors are doing the opposite - bring up particulars, and this allows defense counsel plenty of avenues to sabotage their particulares along the way.
It would be really ironic if the prosecution particularizes their case away to the extent that David Rader was (by implication) deemed to be innocent of the charge he's already confessed to.
This case it just loaded with ironies. Just loaded with them.
You proved to be ahead of your time with respect to bringing up the tactical errors made by the prosecution. The former lead prosecutor of the case, Robert Kent, has just seconded your call...publicly:
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