Tags: Sun-Times | Pays | $32M | Settle | with | Advertisers

Sun-Times Pays $32M to Settle with Advertisers

Monday, 19 September 2005 12:00 AM

Attorneys for advertising customers of the Chicago Sun-Times and two of its sister newspapers announced that they have reached a tentative global settlement with Hollinger International, Inc. , parent company of the publications, which together with earlier settlements provide advertisers with aggregate benefits of $31.8 million in cash and additional advertising.

The original class action complaint was filed following the Sun-Times' voluntary reporting of its circulation problems and was later consolidated with 11 other class action lawsuits filed in Cook County and other courts. The plaintiffs alleged that the Hollinger-owned newspapers inflated their published circulation numbers in order to charge higher advertising rates.

Attorneys for both parties have filed a joint motion to approve the proposed settlement, which would compensate advertisers for damage claims related to the exaggerated circulation figures. The settlement has been approved by the court subject to a fairness hearing in January 2006.

The settlement was the result of a six-month mediation conducted by former federal Judge Abner J. Mikva, who served as the court's appointed mediator.

Michael B. Hyman, co-lead counsel for the class and a principal in the Chicago law firm of Much Shelist, said, "Plaintiffs contended that the newspapers' inflation of their circulation numbers caused our clients to pay more for advertising than they would have paid if the circulation numbers had been accurately reported."

Class counsel conducted extensive discovery involving review of tens of thousands of documents and depositions of several high-level Sun-Times personnel, including Publisher John Cruickshank and Vice President of Advertising Heather McKie.

By court order, the Sun-Times was able to negotiate settlements during the pendency of the litigation with nearly 400 of its largest advertisers for an aggregate consideration in cash and enhanced advertising benefits of $16.8 million.

When coupled with the proposed settlement with the remaining advertisers of $15 million in cash and advertising benefits, the plaintiffs will receive an aggregate total benefit of $31.8 million. The Sun-Times is responsible for paying all costs associated with the administration of the settlement, including publication of notice, mailed notice and distribution of benefits to the class.

The Sun-Times has also agreed to pay an additional sum to cover the fees and expenses of the class counsel up to a total of $5.575 million, which represents less than 15% of the aggregate benefits of the settlement. None of these costs will reduce the benefit to the advertiser class.

Burton I. Weinstein, co-lead counsel for the advertiser class and a partner in the Chicago law firm of Baskin, Server, Berke & Weinstein, stated, "This settlement truly benefits all parties. Members of the class are being fairly compensated for the overstatement of circulation figures, which occurred over several years and only came to light after John Cruickshank's revelation of this practice. Plaintiffs are satisfied with the efforts of the Sun-Times and its sister publications to put in place checks and balances to prevent this from reoccurring."

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Attorneys for advertising customers of the Chicago Sun-Times and two of its sister newspapers announced that they have reached a tentative global settlement with Hollinger International, Inc. , parent company of the publications, which together with earlier settlements...
Sun-Times,Pays,$32M,Settle,with,Advertisers
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2005-00-19
Monday, 19 September 2005 12:00 AM
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