A federal judge in Chicago Friday dismissed a $1.25 billion racketeering suit brought by Hollinger International, Inc. accusing former Chief Executive Conrad Black and his various corporate interests of pocketing more than $380 million in company funds in a series of actions recently documented in a scathing Hollinger report filed with the court and the Securities and Exchange Commission. Judge Blanche Manning said she had no jurisdiction in the case under the federal racketeering statute: "The conduct alleged as predicate acts by the plaintiffs would be actionable as securities fraud, and consequently, may not serve as predicate acts for purposes of a RICO civil action." She also said that claims concerning Black's breach of fiduciary duty and unjust enrichment were matters of state law.
Hollinger and Black had been engaged in a bitter dispute which had prompted the company to stop him from buying the London Telegraph and eventually led to his ouster as company head in November 2003. The full text of Judge Manning's ruling is not yet available online. Bloomberg has more.
UPDATE: Hollinger International says that it will continue to pursue its various claims and may even appeal this RICO ruling, emphasizing the dismissal of its case was on "technical grounds." Read the full HCI press release.