Letter from Media VP about Hollinger CCAA filing

Dear colleagues:

Here’s basic rundown of where we are with the Hollinger CCAA filing.

Several years ago, Hollinger Canadian Publishing Holdings Co. (”Hollinger”) sold its newspaper businesses in Canada and, since that time, has had no ongoing business activity. However, it continues to administer post-employment, post-retirement and pension benefits for approximately 3,000 former employees of the Southam newspaper chain. Hollinger is a wholly owned direct and indirect subsidiary of Sun-Times Media Group Inc. (”STMG”). STMG is in Chapter 11 bankruptcy proceedings in the United States and recently sold the majority of its US-based assets.

As you are likely aware, on  December 10, 2009 Hollinger filed for protection from its creditors under the Companies’ Creditors Arrangement Act (”CCAA”). Pursuant to the Initial Order, the Ontario Superior Court of Justice granted a stay of proceedings against Hollinger in order to facilitate its restructuring. Further, the Initial Order provides that Koskie Minsky LLP is appointed as representative counsel for all members and beneficiaries of Hollinger’s health and welfare plans. At this juncture of the proceedings, the Court has not appointed representative counsel in connection with Hollinger’s pension plans. Since the December 10, 2009 filing for creditor protection under the CCAA, the CEP and our legal team have been monitoring the proceedings closely to ensure that the interests of all CEP former members are protected to the greatest extent possible.

CEP believes that it is the proper party to represent the interests of its former members in the Hollinger CCAA proceedings. CEP is consulting with its legal counsel to determine a course of action. Rest assured, CEP will do whatever it can to ensure that its former members are treated fairly in the proceedings.

Not surprisingly, Hollinger retirees form the single largest group of creditors in the Hollinger CCAA proceedings. The liabilities associated with the provision of post-employment and post-retirement health and welfare benefits to retirees are considerably greater than Hollinger’s existing assets. The last actuarial valuations prepared in respect of Hollinger’s six defined benefit pension plans indicate that the majority of beneficiaries are participants in pension plans that were in a surplus position. Despite the economic crisis in 2008-2009, we are cautiously optimistic that the pension plans remain in a surplus position. Hollinger, in conjunction with its actuary, is in the process of completing current actuarial reports for all of its pension plans which we anticipate will be completed by the end of January or early February. For those members that are beneficiaries in an under funded pension plan, CEP will take all steps necessary to advance your interests in Hollinger’s CCAA proceedings.
Along with the pension financial situation, there are a number of questions which as of yet have no answers but are being pursued. We need to know which people are in which plans. For instance, we do not at this time know who all the former employees are, we need to know the status of those folks on LTD. But first we need to be recognized as representing our former members. These and other matters are being pursued by counsel.

We are also disturbed by the financial shenanigans that have gone on leading up to the filing of CCAA by Hollinger. We are asking that some form of investigation take place.

There is no timeline established for the CCAA proceedings. However, it is expected that the proceedings will last at least four to six months. Although this is a difficult time for everyone involved, you can rest assured that CEP will do everything in its power to protect the interests of its former members in the Hollinger CCAA proceedings.

Sincerely,

Peter Murdoch

Vice-President Media

This entry was posted on Wednesday, January 6th, 2010 at 7:29 am and is filed under Local News.