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Black Jury Resumes Work After Deadlock, Judge's Order (Update5)

By Andrew Harris and Joe Schneider

July 10 (Bloomberg) -- The jury weighing fraud charges against former Hollinger International Inc. Chairman Conrad Black and three codefendants resumed deliberations under orders from the trial judge after deadlocking on some charges.

``We have discussed and deliberated on all the evidence and are still unable to reach a unanimous verdict on one or more counts,'' the jury said in a note today in Chicago federal court.

U.S. District Court Judge Amy St. Eve told the nine-woman, three-man jury, which has deliberated nine days, to resume work. She said she wouldn't accept a partial verdict ``at this time,'' adding that she would accept one if the jury remained hung. The jury finished the day without reaching a verdict.

Black, 62, is charged with fraud and racketeering and faces 20 years in prison if convicted of the most serious counts of the 16 charges he and his codefendants face. If St. Eve subsequently declares a mistrial, prosecutors will have to decide whether to retry Black and the other defendants.

The U.S. government accuses him, former Hollinger Vice President Peter Atkinson, 60, and ex-Chief Financial Officer John Boultbee, 64, of stealing more than $60 million from the company.

The money was disguised as payments made in exchange for the executives' agreeing not to compete with newspapers Hollinger sold between 1998 and 2001 for about $3 billion, prosecutors claimed. A fourth defendant, former General Counsel Mark Kipnis, 59, is accused of helping the others steal the money.

Defense Arguments

Defense lawyers have said the fee agreements were required conditions of closing each newspaper sale.

Kipnis' attorney Ronald Safer told St. Eve today that the jury had been ``extremely careful and very precise.'' Speaking on behalf of all defendants, Safer urged the judge to accept their verdict on the counts they had settled.

Lead prosecutor Eric Sussman disagreed, asking the judge to tell the jurors what other options they had. St. Eve called the jury into court and repeated the final instruction she had given before deliberations began on June 27.

``You should make every reasonable effort to reach a verdict,'' the judge said. ``Discuss your differences with an open mind. Do not hesitate to reexamine your own views and change your opinion if you come to believe it is wrong. But you should not surrender your honest beliefs about the weight or effect of evidence solely because of the opinions of your fellow jurors or for the purpose of returning a unanimous verdict.''

Outside the courtroom, Safer declined to comment on today's proceedings.

Chicago litigator Hugh Totten, who has been watching the trial since its inception, said today's note was not unexpected in a case involving four defendants facing more than 40 charges combined. ``It's natural,'' he said.

Partial Verdict?

``There's a 50-percent chance we're going to have a partial verdict,'' predicted Totten, a partner in the Chicago office of Seattle-based Perkins Coie.

Hollinger was, at its peak, the world's third-largest publisher of English-language newspapers, trailing only News Corp. and Gannett Co. Its properties included the Chicago Sun- Times, the U.K.'s Daily Telegraph, Canada's National Post, the Jerusalem Post and hundreds of community newspapers in the U.S. and Canada. It is now called Sun-Times Media Group Inc.

Black was also Hollinger's chief executive officer. He was forced to resign that post in November 2003. Two months later he was fired as chairman. He and his codefendants were indicted in 2005.

The 15-week trial started with opening statements on March 20. July selection began March 14.

The case is U.S. v. Black, 05cr727, U.S. District Court, Northern District of Illinois, Eastern Division (Chicago).

To contact the reporters on this story: Joe Schneider in Chicago at jschneider5@bloomberg.net; Andrew Harris in Chicago at aharris16@bloomberg.net.

Last Updated: July 10, 2007 17:54 EDT

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