Hollinger Inc.

Hollinger Inc.

July 14, 2008 15:54 ET

Hollinger Inc.: Update on Cease Trade Order to be Issued by Canadian Securities Regulators

TORONTO, ONTARIO--(Marketwire - July 14, 2008) - Hollinger Inc. (the "Company") (TSX:HLG.C)(TSX:HLG.PR.B) announced today that the Ontario Securities Commission (the "OSC") has provided it with a copy of the form of cease trade order to be issued by the OSC. The date upon which the cease trade order will be issued has not yet been determined.

The cease trade order will apply to all securities of the Company but will contain carve-outs to permit trades in the Company's securities that are made: (i) in connection with proceedings under the Companies' Creditors Arrangement Act (Canada) (the "CCAA") and approved by the Ontario Superior Court of Justice and, if required, related proceedings under the U.S. Bankruptcy Code and approved by the U.S. Bankruptcy Court; (ii) for nominal consideration for the purpose of permitting a holder to crystallize a tax loss; or (iii) by or to an entity that qualifies as an "accredited investor" as that term is defined under applicable Canadian securities laws.

The Company has also been advised by the Toronto Stock Exchange (the "TSX") that, provided the consent described below is granted, the TSX will initiate a process that will lead to the delisting of the Company's common shares and Series II preference shares from the TSX following the issuance of the cease trade order.

The Company and Ernst & Young Inc., its court-appointed Monitor, are prepared to consent to the issuance of the cease trade order and delisting provided that they are authorized to provide such consent by the Ontario Superior Court of Justice. The Company will be requesting such authorization from the Court at a hearing scheduled for July 21, 2008.

The cease trade order is being issued as a result of the Company's previously announced determination, in the interests of reducing its costs for the benefit of its stakeholders, not to prepare and file annual audited financial statements and other annual disclosure documents in respect of the Company's financial year ended March 31, 2008. Consequently, following June 30, 2008, the Company has been in default of its continuous disclosure filing requirements under Canadian securities laws.

Under the terms of the May 21, 2008 order issued pursuant to proceedings under the CCAA, the Company is in the process of conducting a claims process for the Company and its subsidiaries, Sugra Ltd. and 4322525 Canada Inc. (the "Applicants"), and will also do so for its non-Applicant subsidiaries as part of their winding-up. Also, under the May 21, 2008 CCAA order, retired justice John D. Ground has been appointed as Litigation Trustee to administer the Company's litigation assets, assisted by an Advisory Committee, and under the supervision of the Monitor and the CCAA court.

Preliminary estimates prepared by the Company, in conjunction with the Monitor, indicate that there is a significant risk that there will not be adequate recoveries from the Company's assets for there to be any residual value for the Series II preference or common shareholders of the Company.

This media release contains forward-looking information. The words "anticipates", "believes", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedules", "should", "will", "would" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. The forward-looking information reflects management's current beliefs and is based on information currently available to the Company's management. The forward-looking information is subject to risks, uncertainties and other factors that could cause actual results to differ materially from results anticipated by the forward-looking information. The factors which could cause results or events to differ from current expectations include, but are not limited to: the outcome of litigation, the CCAA process, regulatory and other proceedings; the actions of Canadian securities regulators in response to the Company going into default under its continuous disclosure obligations; and other factors, many of which are beyond the control of the Company. For additional information with respect to the Company's risk factors, reference should be made to the Company's continuous disclosure materials filed with Canadian securities regulatory authorities.

All forward-looking information in this media release is qualified in its entirety by the above cautionary statements and, except as required by law, the Company undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise.

Contact Information

  • Media contact:
    Hollinger Inc.
    William E. Aziz
    Chief Restructuring Officer
    (416) 363-8721 ext. 262
    Email: baziz@hollingerinc.com