Securities Law & Instruments

Headnote

Variation of cease trade order previously issued against certain directors, officers and other insiders of a reporting issuer in default of filings required under Ontario securities law -- previous management and insider cease trade order (the MCTO) issued in response to earlier application by the issuer to the Commission under OSC Policy 57-603 Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements (the MCTO Policy) requesting that an MCTO be issued as an alternative to an issuer cease trade order -- issuer remains in default but has filed default status reports on a biweekly basis in accordance with Part 3 of the MCTO Policy -- in accordance with the issuer's prior undertaking, the issuer has advised the Commission of recent changes to the issuer's directors, officers and other insiders -- MCTO varied pursuant to section 144 to reflect additional respondents and certain respondents omitted in the MCTO.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 6(3), 127 and 144.

Policies Citied

OSC Policy 57-603 Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, C. S.5, AS AMENDED (THE "ACT")

AND

IN THE MATTER OF

CERTAIN DIRECTORS, OFFICERS AND INSIDERS OF

HOLLINGER INTERNATIONAL INC.

(BEING THE PERSONS AND COMPANIES LISTED

IN SCHEDULE "A" HERETO)

 

ORDER

(Paragraph 127(1)(2) and Section 144)

WHEREAS on June 1, 2004, the Ontario Securities Commission (the "Commission") made an order (the "Hollinger International MCTO") under paragraph 2 of subsection 127(1) of the Act that all trading, whether direct or indirect, by the persons and companies listed in Schedule "A" (individually, a "Respondent" and collectively, the "Respondents") in the securities of Hollinger International Inc. ("Hollinger International") shall cease, subject to certain exceptions as provided for in the Hollinger International MCTO, until two full business days following the receipt by the Commission of all filings Hollinger International is required to make pursuant to Ontario securities law;

AND WHEREAS Hollinger International has, at the request of the staff of the Commission ("Staff"), made an application (the "Application") to vary the Hollinger International MCTO to reflect certain changes to the class of persons and companies who are officers, directors or insiders of Hollinger International since the date of the Hollinger International MCTO;

AND UPON considering the Application and the recommendation of Staff;

AND UPON Hollinger International having represented to the Commission that:

1. Hollinger International is incorporated under the laws of Delaware and is a reporting issuer in the Province of Ontario.

2. Hollinger International has failed to file its interim statements (and interim Management's Discussion & Analysis related thereto) for the three-month period ended March 31, 2004 as required to be filed under Ontario securities law on or before May 15, 2004.

3. Hollinger International has further failed to file its annual financial statements (and annual Management's Discussion & Analysis related thereto) and its Annual Information Form ("AIF") for the year ended December 31, 2003 by the required filing date under Ontario securities law, namely May 19, 2004.

4. Hollinger International has further failed to file its interim statements (and interim Management's Discussion & Analysis related thereto) for the six-month period ended June 30, 2004 and the nine-month period ended September 30, 2004 by the respective due dates of August 14, 2004 and November 15, 2004.

5. On January 18, 2005, Hollinger International filed its 2003 Form 10-K with the United States Securities and Exchange Commission, which form includes its audited financial statements for the fiscal year ended December 31, 2003 and related MD&A and will constitute Hollinger International's 2003 AIF for the purposes of Ontario securities law. On January 21, 2005, Hollinger International filed its audited financial statements for the fiscal year ended December 31, 2003 and related MD&A on SEDAR. In its press release of January 7, 2005, Hollinger International disclosed that it expected to file, within approximately two months after the filing of its 2003 10-K, its interim financial statements for the fiscal quarters ended March 31, June 30 and September 30, 2004.

6. Accordingly, as of the date of this Order, Hollinger International has rectified the filing deficiencies described in paragraph 3 of this Order but has not rectified the filing deficiencies described in paragraphs 2 and 4 of this Order.

7. On May 4, 2004, Hollinger International made an application to the Commission under OSC Policy 57-603 Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements (the "MCTO Policy") requesting that a Management and Insider Cease Trade Order (as that term is defined in the MCTO Policy) be issued as an alternative to an Issuer Cease Trade Order (as that term is defined in the MCTO Policy).

8. In connection with this application, and in accordance with section 3.1 of the MCTO Policy, Hollinger International provided the Commission with

a) an affidavit listing the names and positions/titles (if any) of each person or company that, in the opinion of Hollinger International, comes within the definition of "Defaulting Management and Other Insiders" (as that term is defined in the MCTO Policy); and

b) an undertaking (the "Undertaking") to provide to the Commission, during the period of default, particulars of any changes to this information that is known to Hollinger International.

9. On May 18, 2004, the Director made a temporary order (the "Temporary Order") under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act that the Respondents cease trading in any securities of Hollinger International, subject to certain exceptions as provided for in the Temporary Order, for a period of 15 days from the date of the Temporary Order;

10. On June 1, 2004, following a hearing on the matter, the Commission made the Hollinger International MCTO that provided that all trading, whether direct or indirect, by the Respondents in the securities of Hollinger International shall cease, subject to certain exceptions as provided for in the Hollinger International MCTO, until two full business days following the receipt by the Commission of all filings Hollinger International is required to make pursuant to Ontario securities law;

11. Since the date of the Hollinger International MCTO, Hollinger International has filed Default Status Reports on a biweekly basis in accordance with Part 3 of the MCTO Policy.

12. Since the date of the Hollinger International MCTO, there have been certain changes to the class of persons and companies that, in the opinion of Hollinger International, come within the definition of "Defaulting Management and Other Insiders". In accordance with the Undertaking, Hollinger International has advised the Commission of these changes, and now requests that the Hollinger International MCTO be varied to reflect such changes.

13. Hollinger International believes that, since the date of the Hollinger International MCTO, the following persons and companies have come within the definition of "Defaulting Management and Other Insiders" and accordingly should be named as additional respondents (collectively, the "Additional Respondents") in the Hollinger International MCTO:

Donald M.J. Vale
Monique L. Delorme
James A. Richardson
Jonathan H. Marler
Robert Emmett Tyrrell
Robert J. Metcalfe
Allan Wakefield

14. Each of the Additional Respondents is, or was, at some time since the end of the period covered by the last financial statements filed by Hollinger International, namely since December 31, 2003 (which date reflects the latest filings that are referred to in paragraph 5), a director, officer or insider of Hollinger International and during that time had, or may have had, access to material information with respect to Hollinger International that has not been generally disclosed.

15. In addition, Hollinger International further requests that the list of Respondents appended to the Hollinger International MCTO as Schedule "A" be amended to include

Hollinger Inc.,
504468 N.B. Inc.,
509647 N.B. Inc.,
509643 N.B. Inc. and
509644 N.B. Inc. (collectively, the "Omitted Respondents").

The Omitted Respondents come within the definition of "Defaulting Management and Other Insiders" but were inadvertently omitted in the Hollinger International MCTO.

16. In addition, Hollinger International further consents to the request that the list of Respondents appended to the Hollinger International MCTO as Schedule "A" be amended to delete Mr. Charles G. Cowan (the "Redacted Respondent"). Mr. Cowan retired from all positions with Hollinger International on December 31, 2003. As a consequence of Hollinger International having met its filing requirements for the year ended December 31, 2003, as described in paragraph 5, Mr. Cowan no longer meets the definition of "Defaulting Management and Other Insiders".

AND WHEREAS the Commission is of the opinion that it is in the public interest to make this Order;

IT IS ORDERED under paragraph 2 of subsection 127(1) of the Act and under section 144 of the Act that the list of Respondents appended to the Hollinger International MCTO as Schedule "A" be varied

(a) to include the Additional Respondents and the Omitted Respondents, as those terms are defined in this Order; and

(b) to delete the Redacted Respondent, as that term is defined in this Order.

March 8, 2005.

"David L. Knight"
"Lorne Morphy"

 

Schedule "A"

509645 N.B. Inc.
509646 N.B. Inc.
1269940 Ontario Limited
2753421 Canada Limited
Amiel Black, Barbara
Argus Corporation Limited
Atkinson, Peter Y.
Black, Conrad M. (Lord)
Boultbee, J. A.
Burt, The Hon. Richard
Carroll, Paul A.
Colson, Daniel W.
Conrad Black Capital Corporation
Cowan, Charles G.
Creasey, Frederick A.
Cruickshank, John
Deedes, Jeremy
Dodd, David
Duckworth, Claire F.
Healy, Paul B.
Kipnis, Mark
Kissinger, The Hon. Henry A.
Lane, Peter K.
Loye, Linda
Maida, Joan
McCarthy, Helen
Meitar, Shmuel
O'Donnell-Keenan, Niamh
Paris, Gordon
Perle, The Hon. Richard N.
Radler, F. David
The Ravelston Corporation Limited
Rohmer, Richard, OC, QC
Ross, Sherrie L.
Samila, Tatiana
Savage, Graham
Seitz, The Hon. Raymond G.H.
Smith, Robert T.
Stevenson, Mark
Thompson, The Hon. James R.
Van Horn, James R.
Walker, Gordon W.
White, Peter G.