K Capital seeks changes to 'ineffective' Sun-Times board of directors

By Lisa Kerner

Charlotte, N.C., Jan. 16 - Sun-Times Media Group, Inc. investors led by K Capital Partners, LLC called on majority shareholder Hollinger Inc. and special monitor Richard C. Breeden to make changes to the company's board of directors.

K Capital sent separate letters to Hollinger and Breeden on Jan. 15. The letters were included as part of a schedule 13D filing with the Securities and Exchange Commission.

In its letter to G. Wesley Voorheis, a director of Sun-Times and a director of Hollinger, K Capital expressed frustration with the current 11-member board.

"This large, ineffective board is a legacy from Sun-Times' past and has overseen massive value destruction. Sun-Times shareholders need a break from the past," the letter stated.

The investor recommended a smaller board with more shareholder representation and said a focus on value creation is needed to lead the company "during this critical period."

According to the letter, Hollinger controls the voting stock of Sun-Times and therefore would need to approve a reconstitution of the board.

K Capital urged Hollinger to request that Sun-Times reduce its board to five member and seek the election of Cyrus Freidheim Jr., Sun-Times chairman and chief executive officer; William Aziz, Hollinger chief financial officer; Graham Savage, Callisto Capital chairman; Gene Fox, Cardinal Capital Management managing director; and Jennifer Wallace, Summit Street Capital portfolio manager.

In its letter to Breeden, K Capital asked that Breeden, as special monitor to Sun-Times, support Hollinger's request to make changes to the Sun-Times board.

K Capital manages investment funds and accounts that beneficially own about 9.7% of the outstanding stock of Sun-Times.

It was previously reported that in December, K Capital called for certain "value enhancing actions" by Sun-Times including completion of the share repurchase program authorized in May 2006 and development of a detailed 2008 operating plan.

In addition, the investor wanted the Chicago-based newspaper company to compensate its chairman, CEO and directors of the board entirely in equity compensation, with no cash compensation.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.