Sun-Times Media shareholder Davidson Kempner accuses board of entrenchment

By Lisa Kerner

Charlotte, N.C., Jan. 5 - Sun-Times Media Group, Inc. shareholder Davidson Kempner Capital Management LLC took issue with the company's latest announcement that three directors would not resign from the board as planned on Dec. 31 as part of a board-led restructuring.

Davidson Kempner said Sun-Times shareholders should be concerned by the decision of the board to further entrench itself.

According to Sun-Times, its recruitment of new directors to replace the three has been hampered by Davidson Kempner's consent solicitation process.

Davidson Kempner said Sun-Times' recruitment, which has been underway "for many months," has nothing to do with the shareholder's consent solicitation and "everything to do with the dismal track record of the current directors who do not possess the necessary publishing and restructuring credentials."

"Under the incumbent board of directors, Sun-Times has experienced serious declines in operating performance, a potentially destructive liquidity crisis, and the almost complete deterioration of stockholder value with shares now trading at a paltry $0.06 per share," the stockholder said.

Davidson Kempner wants to reduce the Chicago-based newspaper company's board to five directors from seven and put forth its own slate of director nominees, it was previously reported.

In addition to current independent director Robert B. Poile, Davidson Kempner 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.

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