WILMINGTON, Del. – Conrad Black (search), the embattled newspaper tycoon, struck back at his board of directors Friday, testifying that he was railroaded into stepping down as CEO of his publishing empire and agreeing to return payments he received from the company.
In the third and last scheduled day of testimony, Black said he wasn't given enough time to respond to charges from a special committee of the board of Hollinger International Inc. (HLR) that he and other top executives improperly received about $16 million in payments that hadn't been authorized.
Black said he was confronted with the allegations Nov. 6 and given just four days to respond. He met the deadline, but told the court that he felt he didn't have enough time to answer the charges fully.
Black and his lawyers are arguing that enough other evidence has come to light since then suggesting the payments may well have received the proper approval from the board. Black has reversed his promise to repay the money and wants to be reinstated as CEO.
"I was not in a position to refute their findings, and I trusted them," Black said of the board members who made the accusations against him. "In the circumstances, I negotiated the best deal I could."
Black is facing accusations from his own board that he secretly reached a deal to sell control of the company out from under them, undermining a separate sale process that he had promised to support. They say that secret deal benefits Black, the controlling shareholder, at the expense of other shareholders.
The board is also accusing Black of siphoning off millions of dollars in payments to himself and several senior associates. A lawyer for Black, David Braff, produced several regulatory filings from the company Friday disclosing the payments and saying they had been approved by the company's independent directors.
Under questioning, Black said the filings had been prepared by the company's outside auditing firm KPMG, and that an official from that company had access to the meetings of the company's key audit committee.
The day before, a legal adviser to the investigators looking into the payments told the court that Black had frequently threatened the members of the special committee with legal action or removal from the board.
Richard Breeden, a former chairman of the Securities and Exchange Commission (search), said he couldn't remember how many times Black had made such threats. "Mr. Black begins many conversations by threatening everybody," Breeden said.
Breeden also said he believed Black would "get out of Dodge" if a deal that he negotiated on the sly with the Barclay brothers of England went through, placing the money in an overseas bank where investigators seeking to recover the money would have little chance of getting it.
During his testimony, Black's penchant for flowery language was on full display. In several references to amounts of money, he used the Latin term "quantum" instead of "amount," people he was speaking with as "interlocutors," and a page of evidence to which he had been "conducted."
Black was in the middle of a tour to promote his 1,280-page biography of Franklin Delano Roosevelt last fall when the financial scandal erupted. The book has received glowing reviews.
Black also said he was concerned about the effects the accusations against him were having on his public image. "I've been stigmatized as an embezzler," he said. "I'm trying to retrieve my reputation as an honest man."
The outcome of the case may well determine the fate of Hollinger International's newspapers, which include The Daily Telegraph of Londong, the Chicago Sun-Times and The Jerusalem Post.
The case is being tried in Chancery Court in Delaware, where Hollinger International and many other U.S. companies have their legal home.
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