A Canadian judge has ordered that a court-appointed inspector be assigned to take a close look at the business dealings of Hollinger Inc, the Conrad Black-controlled company said on Friday.
Justice Colin Campbell of Ontario Superior Court approved a request for an inspector made by Catalyst Fund, a Hollinger shareholder, which Hollinger had opposed in recent hearings.
Hollinger Inc said on Friday its three independent directors, who comprise the board's litigation committee, "will consider its options as a result of this order following the issuance of Justice Campbell's reasons for [his] decision."
Campbell's reasons and the investigation's scope are due before Sept. 15, Hollinger said.
A court-appointed inspector in Canada is similar to the court-appointed examiners assigned under US law in the Enron investigation, said Bruce Leonard, a partner with the law firm Cassels Brock & Blackwell LLP.
Court-appointed inspectors, appointed from time to time by Canadian courts, are not judicial in nature; the findings would be "one person's view" and not proved in court, Leonard said.
Hollinger Inc, which is technically the controlling shareholder of Chicago-based Hollinger International, has also taken a number of measures to challenge its erstwhile US subsidiary, which is being run by independent directors.
The battle between Catalyst and Hollinger Inc is one of a growing number of legal actions swirling around Black. He was accused this week by Hollinger International in a special committee report of diverting the company's cash and resources to himself and his close associates.
Black has repeatedly denied wrongdoing and indicated through a spokesman and his companies that he intends to contest the allegations in court.
RSS