-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K8wNqBHuMmn/jar8tCIJTieSrstvJdXFvItTzPYtu7fxuuFq5buNmS5FFYYm+gb9 B01rDoR+KVfq9sLnxtY05A== 0000909518-08-000288.txt : 20080327 0000909518-08-000288.hdr.sgml : 20080327 20080327161540 ACCESSION NUMBER: 0000909518-08-000288 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20080327 DATE AS OF CHANGE: 20080327 GROUP MEMBERS: 4322525 CANADA INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SUN-TIMES MEDIA GROUP INC CENTRAL INDEX KEY: 0000868512 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 953518892 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43563 FILM NUMBER: 08715290 BUSINESS ADDRESS: STREET 1: 350 NORTH ORLEANS ST STREET 2: FLOOR 10 SOUTH CITY: CHICAGO STATE: IL ZIP: 60654-1771 BUSINESS PHONE: 3123212299 MAIL ADDRESS: STREET 1: 350 NORTH ORLEANS ST STREET 2: FLOOR 10 SOUTH CITY: CHICAGO STATE: IL ZIP: 60654-1771 FORMER COMPANY: FORMER CONFORMED NAME: HOLLINGER INTERNATIONAL INC DATE OF NAME CHANGE: 19951020 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN PUBLISHING COMPANY DATE OF NAME CHANGE: 19940204 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOLLINGER INC CENTRAL INDEX KEY: 0000911707 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 135691211 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 10 TORONTO ST STREET 2: TORONTO CITY: ONTARIO CANADA STATE: A6 ZIP: 00000 BUSINESS PHONE: 4163638721 MAIL ADDRESS: STREET 1: 10 TORONTO ST STREET 2: TORONTO CITY: ONTARIO CANADA STATE: A6 ZIP: 00000 SC 13D/A 1 mm03-2708_13da4.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 4)* SUN-TIMES MEDIA GROUP, INC. --------------------------------------------------------------------------- (Name of Issuer) CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE --------------------------------------------------------------------------- (Title of Class of Securities) 86688Q100 --------------------------------------------------------------------------- (CUSIP Number) G. WESLEY VOORHEIS AUTHORIZED REPRESENTATIVE HOLLINGER INC. 120 ADELAIDE STREET WEST, SUITE 512 TORONTO, ONTARIO CANADA M5H 1T1 (416) 363-8721 --------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) MARCH 25, 2008 --------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 2 of 6 This Amendment No. 4 (this "Amendment") amends the Statement of Beneficial Ownership on Schedule 13D originally filed with the Securities and Exchange Commission (the "SEC") on February 14, 2007 (the "Schedule 13D") by Hollinger Inc. ("Hollinger") and 4322525 Canada Inc., an indirect wholly-owned subsidiary of Hollinger ("Canada Co." and together with Hollinger, the "Reporting Persons"), with respect to the Class A common stock, par value $0.01 per share (the "Class A Common Stock"), of Sun-Times Media Group, Inc., a corporation organized under the laws of Delaware (the "Issuer"), as amended by Amendment No. 1 to the Schedule 13D, as filed with the SEC on June 13, 2007, Amendment No. 2 to the Schedule 13D, as filed with the SEC on August 2, 2007 and Amendment No. 3 to the Schedule 13D, as filed with the SEC on September 5, 2007. The address of the Issuer's principal executive offices is 350 North Orleans Street, Chicago, Illinois, 60654. Unless specifically amended hereby or in Amendment No. 1, Amendment No. 2 or Amendment No. 3 to the Schedule 13D, the disclosures set forth in the Schedule 13D shall remain unchanged. Capitalized terms used herein but not otherwise defined herein shall have the meanings set forth in the Schedule 13D and the amendments thereto. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. ITEM 6 IS AMENDED TO ADD THE FOLLOWING: On March 25, 2008, in connection with the court-supervised restructuring of the Reporting Persons and certain affiliates under the Companies' Creditors Arrangement Act (Canada) (the "CCAA") and a companion proceeding in the United States pursuant to Chapter 15 of the U.S. Bankruptcy Code, the Reporting Persons and their affiliate Sugra Ltd. ("Sugra" and together with the Reporting Persons, the "Applicants") and the Issuer entered into a settlement agreement (the "Settlement Agreement"). The Settlement Agreement forms part of an Amended Plan Term Sheet to be filed by the Applicants (the "Term Sheet") with the Ontario Superior Court of Justice (the "Ontario Court") for relief they are seeking in connection with the CCAA proceeding, which is anticipated to be heard by the Ontario Court on April 22-23, 2008. The Settlement Agreement provides for the resolution of all outstanding matters between the Applicants and the Issuer and would form the basis for a plan of arrangement (the "CCAA Plan") that may be prepared by the Applicants within the CCAA proceedings. In order to become effective, the Settlement Agreement must be approved by orders issued by the Ontario Court and the United States Bankruptcy Court for the District of Delaware (the "Delaware Court") (collectively, "Court Approval"). All creditors of the Applicants will have an opportunity to vote on any CCAA Plan that may be presented once the claims of creditors are received and determined in accordance with a claims process that the Applicants are requesting be commenced immediately upon Court Approval. If a CCAA Plan is prepared by the Applicants and approved by the Applicants' creditors, further approval of the Ontario Court and the Delaware Court will be sought and the CCAA Plan will be implemented as soon as possible following such approvals (the "Plan Implementation"). The settlement between the Issuer and the Applicants is not conditional upon Plan Implementation. The principal terms of the proposed Settlement Agreement as it relates to the settlement of outstanding issues between the Issuer and the Reporting Persons are described below. Upon Court Approval, the Ontario Court shall authorize and direct the Applicants, the Issuer and any other party to take the steps necessary to convert all of the shares of Class B Common Stock held by the Reporting Persons into shares of Class A Common Stock on a one-for-one basis. Subject to the CCAA Plan being accepted by the requisite majorities of the Applicants' creditors, upon Plan Implementation, the Issuer will issue and deliver to Hollinger an additional 1,499,000 Class A Shares, providing Hollinger with a total of 16,489,000 shares of Class A Common Stock for the converted Page 3 of 6 shares of Class B Common Stock (a conversion rate of 1.1:1). If the CCAA Plan is rejected, Hollinger will receive only the 14,990,000 shares of Class A Common Stock received upon conversion of its shares of Class B Common Stock, representing a 1:1 conversion. Whether Hollinger receives 14,990,000 or 16,489,000 shares of Class A Common Stock, the Reporting Persons' voting control over the Issuer will be eliminated. The Applicants will release the Issuer, and the Issuer will release the Applicants, from all debts, claims and litigation between the parties, save and except for specific amounts claimed by the Issuer against the Applicants in respect of (i) a promissory note executed by 4322525 Canada Inc. in favour of the Issuer in the amount of US$40.5 million, (ii) present and future claims by the Issuer against Hollinger for contribution and indemnity which are now capped at US$28.6 million and (iii) a claim in respect of an aircraft lease settlement previously entered into by the parties in the amount of CDN$1.3 million (collectively, the "Sun-Times Allowed Claims"). The Sun-Times Allowed Claims will be accepted by the Applicants as valid claims in the aggregate amount of approximately US$70 million. Only the Sun-Times Allowed Claims will be allowed to be filed as unsecured claims by the Issuer against the Applicants in its court-supervised claims process, and recoveries by the Issuer from the Sun-Times Allowed Claims will be limited to US$15 million. However, under the Settlement Agreement, upon the Issuer receiving US$7.5 million in distributions in respect of the Sun-Times Allowed Claims, 50% of all subsequent distributions shall be made available by the Issuer to the Applicants to use, subject to further approval by the Ontario Court at that time, in the pursuit of certain litigation claims held by the Applicants. In addition, any distributions that would otherwise be received by the Issuer in respect of the Sun-Times Allowed Claims in excess of US$15 million will be assigned to the Applicants for the benefit of the Applicants' other unsecured creditors. Pursuant to a stipulation and agreement of settlement of U.S. and Canadian class actions against the Issuer and Hollinger and an insurance settlement agreement dated June 27, 2007, up to US$24.5 million (plus interest, less fees and expenses) will be paid to Hollinger and/or the Issuer and potential other claimants under their directors' and officers' insurance policies (the "Insurance Settlement Proceeds"). Under the Settlement Agreement, Hollinger and the Issuer will cooperate to maximize the recoverable portion of the Insurance Settlement Proceeds payable to them and have agreed that the Issuer will receive 80% and Hollinger will receive 20% of the amounts to be received by Hollinger and the Issuer from such proceeds. In respect of the amount payable to each of Hollinger and the Issuer under the proceedings in Ontario against The Ravelston Corporation Limited and certain of its affiliates under the CCAA and Bankruptcy and Insolvency Act (Canada), the Settlement Agreement provides that each of Hollinger and the Issuer will share equally in any proceeds or recoveries from that estate. Effective upon Court Approval, William Aziz, Brent Baird, Albrecht Bellstedt, Peter Dey, Edward Hannah and Wesley Voorheis will submit their resignations from the Issuer's board of directors. The Issuer has agreed to continue its current examination of all strategic alternatives for improving stockholder value, as announced by the Issuer on February 4, 2008. The Issuer's board of directors has passed the necessary resolutions to ensure that the Settlement Agreement, the Term Sheet and the implementation of the Settlement Agreement and the Term Sheet will not cause any rights granted under the Issuer's current rights plan to become exercisable, will not cause any person to become an "Acquiring Person" under such rights plan and will not otherwise trigger the application of such rights plan. Page 4 of 6 Under the Settlement Agreement, upon Court Approval, Hollinger will pay to the Issuer the reasonable fees and costs of the Issuer incurred in respect of the Applicants' CCAA proceedings from August 1, 2007 up to and including the Court Approval date, up to a maximum of US$1 million. The foregoing summary of the Settlement Agreement is qualified in its entirety by reference to the text of the Settlement Agreement contained in the Term Sheet, which is attached hereto as Exhibit 19 and incorporated herein by reference. In addition, on March 25, 2008, Hollinger issued a press release with respect to the matters described herein, which is attached hereto as Exhibit 20. Item 7. Material to be Filed as Exhibits. ITEM 7 IS AMENDED TO ADD THE FOLLOWING: Exhibit No. Description - ----------- ----------- Exhibit 19 CCAA Plan Term Sheet, containing the Settlement Agreement Exhibit 20 Press release, dated March 25, 2008 Page 5 of 6 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: March 27, 2008 HOLLINGER INC. By: /s/ G. Wesley Voorheis ------------------------------------ Name: G. Wesley Voorheis Title: Chief Executive Officer Page 6 of 6 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: March 27, 2008 4322525 CANADA INC. By: /s/ G. Wesley Voorheis ------------------------------------ Name: G. Wesley Voorheis Title: Authorized Representative EX-99 2 mm03-2708_13da4e19.txt EX.19 - TERM SHEET EXHIBIT 19 ---------- FINAL March 24, 2008 SCHEDULE "A" CCAA PLAN TERM SHEET The Applicants seek Court approval ("Court Approval") to present a plan of arrangement (the "Plan") upon the following terms: A. STMG 1. Upon Court Approval, the Court shall authorize and direct Hollinger, 432, STMG and any other necessary parties to forthwith take the steps necessary to convert Hollinger's and 432's existing Class B shares into an equal number of Class A shares (the "Conversion"), subject to and prior to the steps described in paragraphs 2 and 3 hereof. 2. If STMG's stockholders are required to approve (the "Stockholder Approval") the issuance of the Additional Shares (as defined below), then, upon Court Approval, the Court shall authorize Hollinger, and Hollinger shall approve the issuance of the Additional Shares, pursuant to a stockholder written consent (the "Consent"). 3. If Stockholder Approval is required, as soon as possible after the Consent Effective Date (as defined below), Hollinger and STMG shall effect the Conversion pursuant to the Restated Certificate of Incorporation of STMG. The Consent shall be effective after all actions required by the Securities Exchange Act of 1934, as amended (the "1934 Act"), have been taken and the issuance of the Additional Shares is permitted by the 1934 Act (the "Consent Effective Date"). If no Stockholder Approval is required, Hollinger and STMG shall effect the Conversion pursuant to the Restated Certificate of Incorporation of STMG as soon as possible after Court Approval. 4. Upon the later of (i) Plan Implementation and (ii), if Stockholder Approval is required, the Consent Effective Date, STMG will issue to Hollinger (or as it may direct) 1,499,000 additional Class A shares (the "Additional Shares"). The number of Additional Shares represents 10% of the number of Hollinger's and 432's existing Class B shares. 5. For the avoidance of doubt, if the Plan is (i) rejected by the secured creditor class described herein or (ii) not prepared or otherwise implemented by October 31, 2008, then, in each case, the Additional Shares will not be issued. 6. All transactions will comply with all applicable laws and regulations and rules of applicable stock exchanges. 7. Effective upon Court Approval, the six directors appointed by Hollinger to the Board of STMG (Wes Voorheis ("Voorheis"), William Aziz ("Aziz"), Edward Hannah, Peter Dey ("Dey"), Brent Baird ("Baird") and Albrecht Bellstedt ("Bellstedt")) will submit their resignations from the board of STMG. Upon Court Approval, each resigning director will receive: (a) a written confirmation from STMG that any existing STMG indemnity will remain in place and that such resigning director will be covered by the STMG directors and officers insurance policy in effect from time to time on the same terms as may be applicable to any other current STMG directors; and (b) reimbursement by STMG of all reasonable legal fees incurred by the independent directors (Dey, Baird and Bellstedt) in respect of their tenure as directors of STMG. Upon payment of such fees by STMG, Hollinger will reimburse STMG for all amounts paid in respect of such legal fees, except for US$75,000. 8. Upon Court Approval, Hollinger will pay to STMG the reasonable fees and costs, including legal fees, of STMG incurred in connection with the CCAA proceedings of the Applicants, from August 1, 2007 up to and including the date of Court Approval. However, the total amounts payable to STMG by Hollinger under this paragraph shall be subject to a cap of US$1 million in the aggregate. 9. STMG and Hollinger will cooperate to maximize the recoverable portion of the class action insurance settlement proceeds payable to them and such proceeds shall be allocated so that STMG receives 80% of such proceeds, and Hollinger receives 20% of such proceeds. 10. Hollinger and STMG agree to divide their respective recoveries from the insolvency proceeding of Ravelston equally as between them. 11. The following claims of STMG shall be allowed as unsecured claims against the Applicants (the "STMG Allowed Claims") in the amounts indicated below, subject to confirmation of the calculations of the quantum of such claims by the Monitor: (a) a claim in respect of the promissory note executed by 4322525 Canada Inc. ("432") in the amount of US $40,545,974; (b) all claims for contribution and indemnity STMG has or may assert against Hollinger in the amount of US$28,663,588; and (c) a claim for the aircraft lease settlement in the amount of CDN$1,281,941. 12. Other than the STMG Allowed Claims, all other claims of STMG and its subsidiaries against the Applicants or any of their other subsidiaries, and all claims of the Applicants and their subsidiaries against STMG and its subsidiaries, shall be released upon Court Approval. The Applicants agree, in connection with their release of STMG, that they will not seek contribution, indemnification, reimbursement or any other form of claims over from Torys LLP or any of its predecessor or successor partnerships, F. David Radler or North American Newspapers Ltd. for any consideration paid or payable by any of the Applicants to STMG under this Term Sheet. For greater certainty, nothing contained in this paragraph shall limit or otherwise compromise in any manner, the Applicants' right to pursue or continue to pursue those named parties for any claims whatsoever, save and except only in respect of consideration paid or payable by the Applicants to STMG under this Term Sheet. 13. Within seven days of execution of this Term Sheet, STMG and Hollinger shall jointly seek an order from the Illinois Court dismissing their claims against each other with prejudice, subject to reinstatement if -2- Court Approval is not obtained, and confirming that STMG is entitled to pursue its claims against the defendants in the Illinois Action other than Hollinger after STMG's claims against Hollinger are dismissed. Obtaining such an order will be a condition precedent to implementation of all terms hereof intended to be effective upon Court Approval. 14. The total recoveries of STMG under the STMG Allowed Claims shall be capped at a maximum of US$15 million (the "STMG Cap"). After receipt of the STMG Cap, the balance of the STMG Allowed Claims will be assigned to the Applicants for the benefit of the Applicants' other general unsecured creditors. 15. Upon STMG receiving distributions in the aggregate amount of US$7.5 million in respect of the STMG Allowed Claims (after giving effect to any valid and effective subordination regarding distributions under the 432 promissory note referred to in paragraph 11(a) above, if any), fifty percent (50%) of all distributions thereafter payable to STMG in respect of the STMG Allowed Claims shall be assigned to the Applicants, and, subject to further approval by the Court at that time, shall be available to be used by the Litigation Trustee (as described herein) in the course of his mandate in respect of the Litigation Assets (as described herein). 16. Prior to any agreement in respect of the terms contained herein, STMG will ensure that nothing in the Plan or its implementation will: (a) cause the Rights (as defined in the STMG rights plan) to become exercisable; (b) cause any Person (as defined in the STMG rights plan) to become an Acquiring Person (as defined in the STMG rights plan); or (c) trigger the application of the STMG rights plan. 17. STMG will continue with its independent examination of all strategic alternatives available to STMG. 18. Subject to the terms of any existing court orders or agreements pursuant to which the Applicants may be restricted, the Applicants will support the making of an order providing STMG with equal rights in respect of the Applicants' Mareva injunction against Conrad Black and Barbara Amiel Black. STMG shall be permitted to reserve its right as to whether to seek such an order. B. RESTRUCTURING OF THE SECURITY FOR THE NOTES At their option, the Applicants may present a Plan to their creditors that contains the terms in this Section B, or such other terms as may be negotiated with the creditors of the Applicants. If no such plan is prepared or implemented by October 31, 2008 STMG shall be relieved from the obligation to issue or deliver the Additional Shares. The provisions of this term sheet other than those contained in Section B will be operative and implemented in accordance with the terms hereof, whether or not such a Plan is ever presented or approved. -3- 19. The exchanged and new Class A shares of STMG referred to in paragraph 1 hereof shall replace the Class B shares now held by the collateral agent for the benefit of the indenture trustees and the noteholders. 20. The collateral agent, the indenture trustees and the noteholders shall forbear from enforcing any rights in respect of the collateral, including exercising any voting rights, until the occurrence of one of the following triggering events: (a) if noteholders are not paid in full by the current stated maturity date; (b) if the noteholders have not received payment in full by the date of the final distribution from the estates of the Applicants; (c) any proposed sale of all or substantially all of the shares or assets of STMG; (d) if Hollinger is declared bankrupt; or (e) upon the commencement of any formal bankruptcy, insolvency, liquidation, winding-up or Court supervised reorganization of STMG. 21. Notwithstanding the above, the indenture trustees shall have the right to direct the voting of the pledged shares in respect of any proposed sale of all or substantially all of the shares or assets of STMG. 22. Prior to the occurrence of a triggering event, Hollinger and 432 shall vote the shares owned by them but will consult with the indenture trustees prior to any vote. C. GENERAL PLAN CONDITIONS 23. There will be procedural consolidation for the CCAA processes of all Applicants and substantive consolidation of all assets and claims of the Applicants which may include a formal amalgamation of some or all of the Applicants and their subsidiaries (other than STMG and its subsidiaries) in order to minimize claims and maximize recoveries. 24. A standard CCAA claims process shall be implemented immediately for all claims against the Applicants except claims against the Applicants by their subsidiaries (other than STMG and its subsidiaries). 25. A subsequent claims process shall be implemented in respect of the non-Applicant subsidiaries of the Applicants to ensure that all creditors of those subsidiaries are identified prior to the asset consolidation herein contemplated. 26. The Applicants, in consultation with the Monitor, shall prepare a plan to consolidate at Hollinger, on a tax-effective basis, all assets of the non-Applicant subsidiaries of the Applicants (other than STMG and its subsidiaries) after payment of all claims of creditors of such subsidiaries. 27. There shall be two classes of creditor claims under the Plan as follows: -4- (a) a secured creditor class which shall be comprised of the secured claim of the trustee of the senior noteholders on behalf of the senior noteholders in an amount calculated as follows: i. for voting purposes, the amount of the 20-day weighted average trading price of a single STMG Class A share based on the 20-day trading period prior to the tenth day before the vote multiplied by the number of Class B shares or Class A shares (if the Class B shares have converted prior to any such vote) held as collateral; and ii. for distribution purposes, the amount of the 20-day weighted average trading price of a single STMG Class A share based on the 20-day trading period prior to the tenth day before the plan implementation date multiplied by the number of Class A shares held as collateral immediately after plan implementation; and (b) one general unsecured creditor class incorporating all other claims, including restructuring claims for contracts repudiated by the Applicants in accordance herewith and including a deficiency claim for secured creditors which will be calculated as follows: i. for voting purposes, the total amount owing to the indenture trustees, including all principal, interest and reasonable fees in accordance with the indentures on the tenth day before the vote less the amount of the secured creditors' claims allowed for voting purposes; and ii. for distribution purposes, the total amount owing to the indenture trustees, including all principal, interest and reasonable fees in accordance with the indentures on the tenth day before the plan implementation date, less the amount of the secured creditors' claim for distribution purposes. 28. In the event that the plan is not approved by the requisite statutory majorities of secured creditors, the shares held as collateral shall be transferred into the name of the collateral agent whereupon they shall be converted into an equivalent number of Class A shares of STMG, unless previously converted in accordance with the terms of this Term Sheet. 29. The form and content of the Plan as it relates to STMG shall be satisfactory to STMG, acting reasonably. D. CORPORATE GOVERNANCE 30. Aziz, or an entity controlled by him, shall be appointed forthwith by the Court Approval order as the chief restructuring officer (the "CRO") of the Applicants and an officer of the Court in consideration of a monthly salary of $65,000, payable in advance, plus GST as applicable and reimbursement of reasonable expenses. Such engagement shall be on a month-to-month basis and may be terminated by Aziz upon 30 days' prior written notice. -5- 31. The CRO shall be responsible, among other things, for developing and implementing the asset consolidation and repatriation plan and assisting the Monitor with the claims process. 32. The board of directors of Hollinger shall be reduced as soon as possible to a maximum of three persons. 33. Upon Court Approval, Hollinger and Voorheis will agree to suspend payment of all monthly work fees payable under Hollinger's consulting agreement with Voorheis or any entity controlled by him and Voorheis shall resign as an officer and director of the Applicants or any subsidiary. 34. In accordance with the engagement letter between Hollinger and BMO Nesbitt Burns Inc. ("BMO"), dated June 15, 2007, payment of all monthly work fees payable to BMO ceased in February 2008. E. LITIGATION ASSETS 35. As part of the Court Approval order, justice John D. Ground shall be appointed as an officer of the Court to perform the role of litigation trustee (the "Litigation Trustee") of all litigation assets of the Applicants (the "Litigation Assets") on such terms as may be agreed between the Applicants and justice Ground and subject to approval by the Court. 36. The Litigation Trustee will supervise, control and administer all aspects of the Litigation Assets of the Applicants, in consultation with the Applicants and subject to monitoring by the Monitor and supervision by the Court. 37. The Litigation Trustee may, if he considers it necessary or advisable, retain the services of Voorheis or an entity controlled by him on an hourly basis to provide assistance or advice in respect of the Litigation Assets. 38. The Litigation Trustee will be responsible for administering the Litigation Assets efficiently and in a cost-effective manner with a view to maximizing the net return, after costs, from the Litigation Assets to the Applicants and their stakeholders. Subject to approval of the Court being obtained to the above terms, pursuant to an Order in the -6- form and content satisfactory to the parties, for consideration received, each of the undersigned agrees to the above as evidenced by their respective signatures this 25th day of March, 2008. HOLLINGER INC., SUGRA LIMITED AND 4322525 CANADA INC. Per: /s/ G. Wesley Voorheis -------------------------------------- (I have authority to bind each of the corporations) SUN TIMES MEDIA GROUP, INC. Per: /s/ James McDonough -------------------------------------- Per: /s/ Cyrus Freidheim, Jr. -------------------------------------- (I/We have authority to bind the corporation) -7- EX-99 3 mm03-2708_13da4e20.txt EX.20 - PRESS RELEASE EXHIBIT 20 ---------- HOLLINGER INC. HOLLINGER REACHES SETTLEMENT WITH SUN-TIMES MEDIA GROUP TORONTO, Ontario, March 25, 2008 - Hollinger Inc. ("Hollinger") (TSX:HLG.C) (TSX:HLG.PR.B) announced today that it has entered into a settlement agreement (the "Settlement Agreement") with Sun-Times Media Group, Inc. ("Sun-Times"). Hollinger holds an approximate 70% voting interest and 19.7% equity interest in Sun-Times. In order to become effective, the Settlement Agreement must be approved by orders issued by the Ontario Superior Court of Justice (the "Ontario Court") and the United States Bankruptcy Court for the District of Delaware (the "Delaware Court") (collectively, "Court Approval"). Hollinger and its subsidiaries, Sugra Ltd. and 4322525 Canada Inc. (collectively, the "Applicants") are currently subject to proceedings in Canada under the Companies' Creditors Arrangement Act (Canada) (the "CCAA") and in the United States under Chapter 15 of the U.S. Bankruptcy Code. The Settlement Agreement forms part of an Amended Plan Term Sheet expected to be filed by the Applicants with the Ontario Court on March 26, 2008 (the "Term Sheet") for relief it is seeking in connection with its CCAA proceeding, which is anticipated to be heard by the Ontario Court on April 22-23, 2008. The Settlement Agreement provides for the resolution of all outstanding matters between the Applicants and Sun-Times and would form the basis for a plan of arrangement (the "CCAA Plan") that may be prepared by the Applicants within the CCAA proceedings. All creditors of the Applicants will have an opportunity to vote on any CCAA Plan that may be presented once the claims of creditors are received and determined in accordance with a claims process that the Applicants are requesting be commenced immediately upon Court Approval. If a CCAA Plan is prepared by the Applicants and approved by the Applicants' creditors, further approval of the Ontario Court and the Delaware Court will be sought and the CCAA Plan will be implemented as soon as possible following such approvals (the "Plan Implementation"). The settlement between Sun-Times and the Applicants is not conditional upon Plan Implementation. The principal terms of the proposed Settlement Agreement as it relates to the settlement of outstanding issues between Sun-Times and the Applicants are described below. OBTAINING VALUE FOR HOLLINGER'S VOTING CONTROL OVER SUN-TIMES Hollinger owns, directly or indirectly, a total of 782,923 Class A Common Stock of Sun-Times ("Class A Shares") and 14,990,000 Class B Common Stock of Sun-Times ("Class B Shares"). Through the multiple-voting nature of the Class B Shares, the Applicants have voting control over Sun-Times. Upon Court Approval, the Ontario Court shall authorize and direct the Applicants, Sun-Times and any other party to take the steps necessary to convert all of these Class B Shares into Class A Shares on a one-for-one basis. Subject to the CCAA Plan being accepted by the requisite majorities of the Applicants' creditors, upon Plan Implementation, Sun-Times will issue and deliver to Hollinger an additional 1,499,000 Class A Shares, providing Hollinger with a total of 16,489,000 Class A Shares for the converted Class B Shares (a conversion rate of 1.1:1). If the CCAA Plan is rejected, Hollinger will receive only the 14,990,000 Class A Shares received upon conversion of its Class B Shares, representing a 1:1 conversion. Whether Hollinger receives 14,990,000 or 16,489,000 Class A Shares, its voting control over Sun-Times will be eliminated. -2- RESOLUTION OF ALL CLAIMS AND LITIGATION BETWEEN HOLLINGER AND SUN-TIMES Hollinger will release Sun-Times, and Sun-Times will release Hollinger, from all debts, claims and litigation between the parties, save and except for specific amounts claimed by Sun-Times against Hollinger in respect of (i) a promissory note executed by 4322525 Canada Inc. in favour of Sun-Times in the amount of US$40.5 million, (ii) present and future claims by Sun-Times against Hollinger for contribution and indemnity which are now capped at US$28.6 million; and (iii) a claim in respect of an aircraft lease settlement previously entered into by the parties in the amount of CDN$1.3 million (collectively, the "Sun-Times Allowed Claims"). The Sun-Times Allowed Claims will be accepted by the Applicants as valid claims in the aggregate amount of approximately US$70 million. Only the Sun-Times Allowed Claims will be allowed to be filed as unsecured claims by Sun-Times against the Applicants in its court-supervised claims process and recoveries by Sun-Times from the Sun-Times Allowed Claims will be limited to US$15 million. However, under the Settlement Agreement, upon Sun-Times receiving US$7.5 million in distributions in respect of the Sun-Times Allowed Claims, 50% of all subsequent distributions shall be made available by Sun-Times to the Applicants to use, subject to further approval by the Ontario Court at that time, in the pursuit of certain litigation claims held by the Applicants. In addition, any distributions that would otherwise be received by Sun-Times in respect of the Sun-Times Allowed Claims in excess of US$15 million will be assigned to the Applicants for the benefit of the Applicants' other unsecured creditors. Pursuant to a stipulation and agreement of settlement of U.S. and Canadian class actions against Sun-Times and Hollinger and an insurance settlement agreement dated June 27, 2007, up to US$24.5 million (plus interest, less fees and expenses) will be paid to Hollinger and/or Sun-Times and potential other claimants under their directors' and officers' insurance policies (the "Insurance Settlement Proceeds"). Under the Settlement Agreement, Hollinger and Sun-Times will cooperate to maximize the recoverable portion of the Insurance Settlement Proceeds payable to them and have agreed that Sun-Times will receive 80% and Hollinger will receive 20% of the amounts to be received by Hollinger and Sun-Times from such proceeds. In respect of the amount payable to each of Hollinger and Sun-Times under the proceedings in Ontario against The Ravelston Corporation Limited and certain of its affiliates under the CCAA and Bankruptcy and Insolvency Act (Canada), the Settlement Agreement provides that each of Hollinger and Sun-Times will share equally in any proceeds or recoveries from that estate. CORPORATE GOVERNANCE OF SUN-TIMES Effective upon Court Approval, William Aziz, Brent Baird, Albrecht Bellstedt, Peter Dey, Edward Hannah and Wesley Voorheis will submit their resignations from the Sun-Times' board of directors. Sun-Times has agreed to continue its current examination of all strategic alternatives for improving stockholder value, as announced by Sun-Times on February 4, 2008. Sun-Times' board of directors has passed the necessary resolutions to ensure that the Settlement Agreement, the CCAA Plan and the implementation of the Settlement Agreement and the CCAA Plan will not cause any rights granted under Sun-Times' current rights plan to become exercisable, will not cause any person to become an "Acquiring Person" under such rights plan and will not otherwise trigger the application of such rights plan. -3- LITIGATION ASSETS At the same time that Court Approval is sought, the Applicants will be seeking the appointment of retired Ontario justice, the Honourable John D. Ground, as an officer of the Ontario Court to perform the role of litigation trustee (the "Litigation Trustee") of all of the litigation assets of the Applicants (the "Litigation Assets") on such terms as may be agreed between the Litigation Trustee and the Applicants, and subject to approval by the Ontario Court. The Litigation Trustee will supervise, control and administer the Litigation Assets in consultation with the Applicants and subject to monitoring by Ernst & Young LLP, the Monitor and supervision by the Ontario Court. HOLLINGER CORPORATE GOVERNANCE Pursuant to the Term Sheet and subject to Court Approval of the Settlement Agreement being obtained, Hollinger intends to reduce the size of its board of directors or, if possible, to eliminate it. Also upon Court Approval, G. Wesley Voorheis, Chief Executive Officer of Hollinger, will resign as an officer and director of the Applicants and any subsidiaries. The Litigation Trustee may retain the services of Mr. Voorheis or an entity controlled by him to provide assistance or advice in respect of the Litigation Assets. At that time William Aziz, Hollinger's Chief Financial Officer, or an entity controlled by him, will be appointed as Chief Restructuring Officer of Hollinger and an officer of the Ontario Court in consideration of a monthly salary of $65,000. Such engagement shall be on a month-to-month basis and may be terminated by Mr. Aziz upon 30 days' prior written notice. PAYMENT OF A PORTION OF SUN-TIMES COSTS AND FEES Under the Settlement Agreement, upon Court Approval, Hollinger will pay to Sun-Times the reasonable fees and costs of Sun-Times incurred in respect of the CCAA proceedings from August 1, 2007 up to and including the Court Approval date, up to a maximum of US$1 million. CONTACT INFORMATION Media contacts: G. Wesley Voorheis Chief Executive Officer (416) 363-8721 ext. 237 wvoorheis@hollingerinc.com William E. Aziz Chief Financial Officer (416) 363-8721 ext. 262 baziz@hollingerinc.com -----END PRIVACY-ENHANCED MESSAGE-----