Hedge Fund Ousts Board At Chicago Sun-Times

Jan 20 2009 | 2:05am ET

A New York hedge fund has won its proxy battle with the second city’s second newspaper.

On Friday, Davidson Kempner Capital Management said it had won approval of its plan to oust several members Sun-Times Media Group’s board of directors. The activist hedge fund, which owns 5.9% of the troubled publishing company, said it had received and delivered the required number of consents from a majority of shareholders to replace three board members. Davidson Kempner said it wants the new board to replace Sun-Times Media CEO Cyrus Freidheim.

Sun-Times Media publishes the Chicago Sun-Times and dozens of local newspapers in the Chicago area.

Only one member of Sun-Times Media’s board is to be spared: Robert Poile, representing fellow hedge fund Polar Securities. The new members of the company’s board are Jeremy Halbreich, former general manager of the Dallas Morning News, and two business restructuring specialists, Michael Katzenstein and Robert Schmitz.

“Through the provision of these consents, the stockholders have made clear their desire and support for a board of directors that is made up of professionals experienced in publishing and restructuring,” Davidson Kempner said in a statement. “Given the operating and financial challenges before Sun-Times, we believe that the reconstituted board has the better potential to guide and lead Sun-Times.”

For its part, Sun-Times Media said it would hire an independent inspector to verify the consents “purporting to effect the reconstitution of the company’s board of directors.”

Davidson Kempner has railed against the company’s board and management, laying at their feet the blame of its huge losses and terrible stock performance. Sun-Times Media’s share price of 8 cents values the company at less than $7 million.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…