Sun-Times Media makes final payment in CanWest dispute

DES MOINES, Iowa -- A Canadian newspaper company said Thursday it has received the final 34 million Canadian Dollars ($26.3 million) from Sun-Times Media Group Inc. to settle a dispute lingering from the 2000 acquisition of a group of newspapers.

The Chicago-based owner of the Chicago Sun-Times sold a group of Canadian newspapers to Canwest Global Communications for $3.2 billion in 2000.

At the time, Sun-Times Media was called Hollinger International and led by former media mogul Conrad Black.

Winnipeg-based Canwest originally claimed it was owed 84 million Canadian Dollars ($65 million) as part of an adjustment to the purchase.

Sun-Times Media contested the claim and the case went into arbitration with a Jan. 29 ruling resulting in an award of 51 million Canadian Dollars ($39.5 million) plus interest and costs.

Canwest subsidiary Canwest Media Inc. has received 30.5 million Canadian Dollars ($23.6 million), increasing the amount received to 50 million Canadian ($38.8 million), which was deposited as cash collateral under its senior credit facility. The remaining 3.5 million Canadian ($2.7 million) in settlement proceeds will benefit Canwest Publications Inc., a subsidiary of Canwest Limited Partnership, the company said.

"We are very pleased to have reached a resolution with CanWest on this matter," said Jeremy L. Halbreich, chairman and interim chief executive of Sun-Times Media Group. "However, the Company continues to face a number of pressing challenges."

He said the company is working to resolve other financial and operational issues "to secure the best possible future for the company's newspaper and Web brands in the Chicago area."

Sun-Times Media has closed 12 Chicago-area newspapers as part of cost-cutting measures brought on by declining revenue.