Sun-Times Media shareholder's consent solicitation receives support of proxy advisory firm

By Lisa Kerner

Charlotte, N.C., Jan. 12 - RiskMetrics Group/ISS recommends that Sun-Times Media Group, Inc. shareholders elect the dissident slate of nominees to the company's board of directors, Davidson Kempner Capital Management LLC announced on Monday.

Davidson Kempner wants to reduce the Chicago-based newspaper company's board to five directors from seven, it was previously reported.

In addition to current independent director Robert B. Poile, Davidson Kempner said it is nominating:

• Jeremy L. Halbreich, former president and general manager of the Dallas Morning News;

• Robert A. Schmitz, a partner at Quest Turnaround Advisors; and

• Michael E. Katzenstein, founder and principal of CXO, LLC, a restructuring and turnaround management firm.

Davidson Kempner said previously that it wants a reconstituted board to arrest cash burn, resolve an Internal Revenue Services claim and strategically reposition Sun-Times.

"We have been clear from the outset of this consent process that time is of the essence with respect to the future of Sun-Times, given its urgent operating and liquidity needs," Davidson Kempner said in a news release.

Sun-Times recently denied that its board is seeking to entrench itself by delaying the planned departure of three directors, saying the directors agreed to stay on "only so that the board can be properly restructured one way or the other."

According to Sun-Times, Davidson Kempner has:

• Rejected reasonable compromise proposals;

• Refused to permit the nominating and governance committee to meet with or collect information from the shareholder's nominees; and

• Failed to offer concrete proposals for addressing the challenges facing Sun-Times.

Sun-Times said it has an "ambitious and concrete plan" to reduce costs by more than $50 million and achieve cash flow neutrality in the next 12 to 24 months.

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