Conrad Black has settled a fight with the Canada Revenue Agency over $15-million in liens it had slapped onto his Toronto mansion over unpaid tax bills, which the former newspaper baron says are "strenuously contested."
Mr. Black, who is waging a battle with the CRA over taxes dating back more than a decade, had challenged a move last month by the tax collector to place liens on his 26,000-square-foot house in the city's posh Bridle Path neighbourhood.
According to court documents, the liens had threatened Mr. Black's plans to sell the mansion for $14-million, pay off $13-million in mortgages and then live in the house while leasing it back from the purchaser for $155,000 a year.
But just before the challenge was supposed to go before a Federal Court judge in Toronto on Tuesday, Mr. Black's lawyers dropped the case. In an e-mail, Mr. Black said a deal had been reached with the CRA about the liens: "It has been resolved to the shared satisfaction of the parties involved, and I will have no further comment on it."
The terms of the settlement were not disclosed.
According to court documents, the CRA had filed the liens on Mr. Black's 6.6-acre property in May because it believed that the former media magnate could leave Canada without paying $31-million in tax debts the agency says he owes to the Canadian and U.S. governments.
The CRA also alleged that Mr. Black planned to transfer or deplete assets in order to avoid paying his tax bills, and alleged that the sale price he had accepted for his house was below market value.
Mr. Black, who was convicted of fraud and obstruction of justice in 2007 for actions related to the sale of parts of his newspaper empire, says in court documents that he has no intention of moving assets or leaving Canada and argues that the sale price for his house represents market value.
In his affidavit, he says the sale would save him $1-million a year in interest and allow him to retire the last of his mortgage debt, improving his financial position and his ability to pay any tax debts he is eventually found to owe.
And although he was forced to give up his Canadian citizenship in order to sit in Britain's House of Lords in 2001, he says he plans to renew his temporary resident permit, then apply for permanent residency and eventually his Canadian citizenship.
The CRA's move had stalled the sale of the mansion for $14-million to a friend of Mr. Black's, multimillionaire businessman Harold Peerenboom, who had agreed to lease the house back to Mr. Black and his wife, Barbara Amiel.
The first lien on the property demanded $12.3-million for the CRA in unpaid taxes, while a second lien demanded $2.8-million on behalf of the U.S Internal Revenue Service.
According to court documents, Mr. Black also faced an action filed earlier in June by the holder of two mortgages on the property that was trying to force a sale after the mortgages went into default.
In a court document filed in his dispute over the liens, one Mr. Black's lawyers, David Foulds, said Mr. Peerenboom's offer to buy the mansion would expire June 30. The submission also states that Mr. Black was "prepared to put the net proceeds of the sale of the residence into trust," pending the outcome of his challenge.
According to a May 5 order from the Federal Court, the CRA says Mr. Black owes $12.3-million in taxes to the Canadian government for 2002, 2003 and 2008 and more than $19-million to U.S. tax authorities.
In court documents, Mr. Black said the CRA's tally is "substantially overstated," and he continues to fight the tax agency in court. In an e-mail, he also said U.S. authorities do "not now make any such claim."
Editor's Note: An earlier version of this article incorrectly stated that Mr. Black had been facing a $16-million liens. In fact, the figure was closer to $15-million. This version has been corrected.