OTTAWA, Jan. 6 /CNW Telbec/ - Canada's largest media union is demanding an investigation into what appear to be certain questionable financial dealings revealed by Hollinger Canadian Publishing Holdings Co (HCPHC) in its recent filing under Canada's bankruptcy protection legislation, CCAA.
"This company appears to have given away tens of millions of dollars," said Peter Murdoch, vice-president media for the CEP. "Hollinger paid out $43 million to its shareholders at a time when it should have been apparent that this would have an adverse impact on the rights and entitlements of retirees."
Documents filed with the Ontario Court of Justice just before Christmas show that HCPHC issued a $43 million dividend to its shareholders, including its parent company Sun-Media Times Company (STMG), only months before STMG went into bankruptcy protection in the United States. The documents further show this $43 million dividend was issued on the basis that HCPHC had sufficient remaining assets to satisfy all of its obligations, including its obligations to Southam retirees. However, HCPHC's single biggest "asset" was a $50 million (US) loan made to its parent company, STMG, which would prove worthless a few months later upon STMG's bankruptcy filing in the U.S.
"The timing of these transactions raise serious questions that require investigation," said Murdoch. "It is unconscionable that a company which should have seen the writing on the wall decided to pay off its shareholders and thereafter abandoned its pensioners. If it isn't illegal, it should be."
The union says it understands there are legal restrictions on companies aimed at preventing distressed/insolvent companies from transferring assets to defeat creditor claims.
"Once again its appears that employees who gave decades of their lives loyally working for a company end up last on the list of creditors and first on the list of victims," said Murdoch.
SOURCE Communications, Energy and Paperworkers Union of Canada
For further information: For further information: Peter Murdoch at (613) 230-5200 or (905) 516-5720