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Pierre Karl Péladeau had an epiphany in July, 1998. Back then, Péladeau was an e-Luddite. When the Quebecor CEO-in-waiting arrived home from four years of overseeing the company's printing operations in Europe in early 1998, he did not know how to send an e-mail. Secretaries and middle managers summoned to complete the task rolled their eyes as he uttered expletives at his computer. He hated the Internet. He thought it irrelevant to a company like Quebecor. Péladeau had, after all, been weaned on the Old Economy religion of cash flow and physical assets, the staples of the newspaper, printing and forestry holdings that had catapulted Quebecor to greatness under his late father, Pierre Péladeau.

In 1998, Quebecor's hodgepodge of New Economy assets weren't generating much, if any, EBITDA. Péladeau was openly contemptuous of the millions his older brother Érik, then chairman and CEO of a now defunct unit called Quebecor Multimedia, seemed to be frittering away on microscopic dot-com start-ups. A few months before his return, Pierre Karl even refused a request for a meeting from one of Érik Péladeau's star catches, Alexandre Taillefer, a brainy 24-year-old Web-site designer whose firm, Intellia Inc., had been bought by Quebecor in 1996. "The multimedia [investments]just cost us money. They don't bring in any," Taillefer recalls Pierre Karl barking at him in late 1997 over the telephone.

Almost a year later, the two finally were meeting face to face. Érik Péladeau had summoned Taillefer to Quebecor's head office one Saturday to help him set up his latest toy, an MP3 player. Pierre Karl happened to tag along. This did not augur well. Apart from his technophobia, there was the fact that, as the owner of French Canada's biggest record distributor, Quebecor stood to lose big-time from the spread of MP3.

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But the e-skeptic's reaction amazed all present. "Il trouvait ça trippant," Taillefer chuckles, explaining the "trip" the younger Péladeau took downloading songs from the Net. "I think that was the moment Pierre Karl really came to understand the Internet's potential. After that, all he wanted to do was surf."

Says Érik Péladeau, now vice-chairman of Quebecor: "At first, Pierre Karl didn't understand [the Internet] But the thing about Pierre Karl is that, once he understands, he moves fast."

That is an understatement. By this spring, Péladeau was vowing to turn Quebecor into one of the world's 10 biggest media players--an AOL-Time Warner of the North, selling content both English and French from a worldwide stable of newspaper, magazine, television, Internet, telephone and cable properties lumped together in a new publicly traded entity (tentative name: Quebecor Media).

Of course, the linchpin and, currently, missing ingredient in Péladeau's convergence stew is the wires--something competitors BCE Inc. and Rogers Communications Inc. do own. In March, Péladeau staked his claim as BCE's principal Quebec rival with a bellicose $5.9-billion proposal to buy the province's dominant cable operator, Groupe Vidéotron Ltée. Vidéotron's fate may lie with the courts, where the Caisse de dépôt et placement du Québec is challenging a lock-up agreement between Vidéotron's owners--Montreal's Chagnon family--and rival bidder Rogers. But it will take more than a legal reversal in the pursuit of this one target to stop Péladeau. "I firmly believe that companies that do not have a global vision do not have a future," he bellowed at a Quebecor meeting in April as he outlined his dot-com ambitions. The same week, during an evening on-line chat with devotees of Quebecor's Canoe Web portal, he promised: "We intend to grow--big time--with Quebecor Media." You could almost sense the drive that went into each keystroke.

The adventure could prove the stock-market equivalent of white-water rafting for Quebecor's investors. Unlike commercial printing or newspapers, cable and Internet companies still generally eat more cash than they produce. You need a stomach for red ink, something neither Péladeau nor Quebecor's shareholders have demonstrated in the past. "Quebecor is a printing and publishing company. That's what it knows," opines one Bay Street analyst. "What is going to happen as it throws itself into something it doesn't know? How much are those errors going to cost?"

The man is nothing if not headstrong. Pierre Karl Péladeau--widely known as "PK"--rebelled early and often. He was, as one family acquaintance puts it,

"the coolest guy." The friend recalls Érik Péladeau hauling his sartorially-challenged adolescent brother on a clothes-shopping expedition. Pierre Karl came back with a sports jacket, but insisted on wearing the same dirty pair of ripped jeans with it. Shortly after his 18th birthday party, at which he stood up to renounce both his father and his wealth, he chose to study philosophy at the left-leaning Université du Québec à Montréal, spurning the establishment Université de Montréal, his father's alma mater.

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It was at UQAM that Pierre Karl, né Pierre-Carl, adopted the current spelling of his name, apparently in honour of Karl Marx. But Péladeau seems to have abandoned his leftist convictions as quickly as he embraced them. At 22, he entered law school in Paris and returned home the following year, in 1985, to complete his Quebec bar exam and join the family business. His natural flair for business impressed Quebecor managers as much as his cockiness irritated them. Blessed with abundant smarts, natural confidence and his mother's good looks, the twentysomething Péladeau emerged almost immediately as heir apparent. While Érik applied himself quietly as a marketing vice-president in the printing division, Pierre Karl honed his skills on the deals that transformed Quebecor from a regional newspaper publisher into a global printing, publishing and forestry conglomerate.

In 1991, at 29, Péladeau was named by his father to head Quebecor Communications, then the newspaper and magazine division. Here he earned his reputation as a ruthless cost-cutter and abrasive boss. It's not certain which irked Pierre Péladeau the most--his son's smart-ass demeanour or his undeniable brilliance. Either way, he soon discovered he didn't want him around and, in 1994, sent Pierre Karl into exile in Europe. But the purgatory proved fortuitous for the company. By the time Péladeau returned home four years later, Quebecor's European printing operations had become the biggest on the continent. And by then his father had passed on. There could be no doubt that Pierre Karl's return to Montreal signalled his elevation to the top job.

When he officially took over as CEO in April, 1999, the younger Péladeau vowed he'd live up to Quebecor's reputation as an aggressive acquisitor. Indeed, at 38, Péladeau has, in a mere year, transformed Quebecor as profoundly as his iconic father did in a lifetime.

Péladeau gave investors an avant-goût of his aggressive style just before becoming CEO, when, with Quebecor Printing's unapologetically in-your-face CEO, Charles Cavell, he co-piloted Quebecor's breast-beating $1-billion takeover of Sun Media Corp. in late 1998. He paid about three times more than his father had offered only a few years earlier for Canada's second-largest newspaper chain. Many analysts fretted. Had Quebecor abandoned the financial conservatism that had always guided its acquisition strategy in the past? By soon after selling four of Sun's regional broadsheets to Torstar Corp. and spinning off 30% of Sun Media to a trio of institutional investors, raising $610 million, Péladeau proved it had not.

With Sun Media, Péladeau fulfilled his father's dream of owning a national network of dailies. He also gave Quebecor a coveted beachhead in the cyber-economy by acquiring Sun Media's 60% stake in Canoe LP. (Last summer, Quebecor bought out BCE's 40% stake in Canoe; Péladeau has since promised to take the portal public.)

But the Sun chain was only the first item on Péladeau's grocery list. Last July, Quebecor Printing spent $1.4 billion (U.S.) to acquire World Color Press Inc. of Greenwich, Conn. The deal vaulted the printing unit (since renamed Quebecor World Inc.) past R.R. Donnelley & Sons Co. to become the globe's biggest commercial printer. Once again, Péladeau demonstrated an uncanny knack for outdoing Dad, who had longed to overtake Chicago-based Donnelley. But he paid handsomely for the distinction. Quebecor World's debt-to-capitalization ratio soared to 62% from 37% with the addition of World Color's $1.3-billion in long-term debt.

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Under Cavell's much-praised management, Quebecor World has squeezed twice the amount of synergies ($100 million) out of the combined operation as it forecast, freeing up more cash to pay down debt. The debt-to-cap ratio should fall to around 50% this year. "It's true we're leveraged," Péladeau concedes. "But we're not more leveraged than we were 10 years ago when we bought [Robert]Maxwell's [U.S. printing operations] Obviously, the [debt]numbers are bigger. But the company and its assets are bigger too."

Péladeau's New Economy ambitions became crystal clear last fall when Quebecor took a 58.3% controlling interest in Quebec City-based Informission Group Inc., a Web systems integrator and e-commerce specialist. Quebecor's own Web-site designer, Intellia, had assembled an impressive roster of blue-chip clients but lacked the technological depth needed to manage their sites. Informission provided that. Since the deal, Quebecor has pumped almost $100 million into the merged entity, renamed Nurun Inc., enabling it to swallow more than half a dozen firms. They include Cythère SA, a leading French Web firm that manages big-name sites.

Péladeau envisions synergies between Quebecor's Old and New Economy holdings. Quebecor World prints catalogues and flyers for a host of big-name retailers. Péladeau, through Nurun, now wants to be their e-tailing partner. "We digitalize all their information [pictures, text, prices]to print their catalogues and flyers. Now, we can easily use that information to create and manage retailers' Web sites." Dundee Securities Inc.'s analyst Bill Wolfenden likes what he sees: "Quebecor has made a lot of right moves in the past 18 months. It's transformed itself into a nice blend of the Old and New economies."

In February, Péladeau sold Quebecor's 20% equity (and 63% voting) stake in newsprint producer and industry star Donohue Inc. to Abitibi-Consolidated Inc. for about $1.1 billion in cash and Abitibi stock. The deal left Quebecor as the largest shareholder, with an 11% stake, in the world's dominant newsprint maker. But it is only a matter of time before Péladeau sells the stock and invests the proceeds in another dot-com venture. He's already talking about leveraging Vidéotron's expertise to expand across Canada. And the Cythère deal confirmed Péladeau's determination to crack the French market, where Quebecor--with its abundance of French-language content--has an undeniable advantage over its North American rivals. Péladeau's next move is likely the establishment of a Web portal in France.

The selling spree by the Hollinger Inc. and Thomson Corp. newspaper chains affords more opportunities. In early May, Quebecor was eyeing a possible purchase of Hollinger's The Vancouver Province to complete its chain of tabloids in Canada's major markets. Péladeau is likely to pick up a quantity of other Hollinger or Thomson titles in Canada. Atlantic Canada--where Hollinger is offering the Halifax Daily News--is a priority. Péladeau has also made no secret of his ambition to rehabilitate Quebecor's image in the U.S. market, where its Philadelphia tabloid failed miserably in the early 1980s. Florida is the likely landing point.

It's becoming a Quebecor world, indeed.

The headquarters of the Péladeau family empire are something of a dowdy next-door neighbour to the stately landmarks of Montreal's financial district. In real-estate jargon, it is a "B" building, a fixer-upper slapped together in 1967 with second-rate materials. The stretch-a-dollar state of disrepair extends to the inside, from the cramped, almost seedy, lobby to the fraying carpet of the 13th-floor executive suite, where the aroma of a recently smoked cigar lingers in the chief executive's corner.

A mammoth blue trunk--the kind you're more likely to find in college dorms than the CEO's suite--dominates Péladeau's office. On it, there sits a copy of the latest issue of BCE's Sympatico monthly magazine. Quebecor publishes the magazine; but Péladeau is more likely doing surveillance on the enemy than displaying some of his product. He's unimpressed. "Sympatico considers itself a portal," says Péladeau, as he leans back in a chair that looks far too fragile to house his athletic frame. "But it's not very interesting. You end up on their home page because you pay $19.99 to Sympatico to be your ISP [Internet services provider] Whereas you go on Canoe because you want to go on Canoe."

Still, Péladeau knows he can't be complacent. BCE has just teamed up with U.S. portal leader Lycos Inc. to revamp the Sympatico site, while its $2.3-billion purchase of CTV gives Sympatico exclusive access to a prime source of English-language content. Péladeau concedes he would have rather seen CTV's content on Canoe, but deferred to BCE's deeper pockets. "Yeah, we looked at it," Péladeau says of the network. "But there is so much a man can do with that kind of money."

Péladeau himself wasn't sure exactly what until he spoke in February with Michel Nadeau, the in-house consummate dealmaker at the carnivorous Caisse de dépôt et placement du Québec. Nadeau was canvassing Quebec Inc. in search of a homegrown alternative to trump Ted Rogers's $5.6-billion bid for Vidéotron.

The caisse, which has a 17% voting stake in Vidéotron, was motivated by one part undiluted nationalism and one part good business sense. It worried that a heavily indebted and aging Rogers would before long cede control of his company to a foreign rival, such as AT&T Corp., which already owns a third (with British Telecommunications PLC) of Rogers's cellular telephone operations. What's more, the Toronto-based cable magnate seemed culturally impervious to the on-line potential of the Quebec media market, where loyalty to homegrown content has long made the province an anomaly in Canada. Rogers's long-standing refusal to include Vidéotron-controlled TVA Group Inc., French Canada's most-watched TV network, in its basic cable package was proof of its insensitivity. And its decision to exclude the TVA stake from its Vidéotron bid underscored its failure to grasp the significance of the AOL-Time Warner merger.

With Vidéotron, Quebecor would inherit one of the most modern cable networks in North America, equipped to provide high-speed Internet access to Vidéotron's 1.5 million residential subscribers in Quebec. (BCE is still light-years behind in its high-speed, or broadband, capacity.) Quebecor would make Canoe and its French-language equivalent, Canoë, the default home page of Vidéotron's Internet subscribers, sending the sites coveted traffic. Then there's the prime content of TVA, which also owns Quebec's biggest magazine publisher (Trustar Ltée) and Netgraphe Inc., another dot-com darling with an irresistible stock symbol (WWW) and control of French Canada's leading search engine, La Toile du Québec.

Péladeau would combine Vidéotron with Sun Media, Canoe, Nurun and Télévision Quatre Saisons (TQS) in a new company, Quebecor Media. The caisse would inject $1 billion in cash in exchange for a 14% stake. Quebecor would own 56%; Vidéotron's other shareholders would end up with the remainder. Since Quebecor Media's shares do not yet trade publicly, it's difficult to tell whether the nominal $49-a-share bid--$28.41 of it in cash and the rest in stock--is worth what Péladeau says. And the fine print could change many times before a deal is completed. Péladeau is not married to the idea of owning Vidéotron's cable assets. What he really wants is exclusive access to its wires for Canoe and the rest of Quebecor's content. Why tie up billions in physical assets if you don't have to? Péladeau says he "made a personal sales pitch" to this effect to Ted Rogers, but the cable baron wouldn't bite. "I hope he can change his mind because we think we can offer him a lot."

Canoe, for instance. On Péladeau's watch Canoe has accelerated, becoming the country's best-known Web site and among its most visited. It is a Canadian leader in on-line journalism, with a hip, eclectic mixture of real-time hard news and an abundant offering of lifestyle, financial and entertainment features. It's been an aggressive pioneer on the e-commerce front, putting the equivalent of several West Edmonton malls at surfers' fingertips. More important, it appears to be one of the few Canadian sites with a bona fide business plan.

Still, the high stakes and bitter rivalries at play in the Canadian portal wars may make it impossible for Péladeau to realize his ambitions without owning Vidéotron lock, stock and barrel--especially since Rogers teamed up in March with California-based Excite@Home Corp. and Calgary's Shaw Communications Inc. to launch Excite@Canada. The partners aim to make Excite.ca the premier destination of Canadians on the Web, thanks to the half-million subscribers to the @Home high-speed Internet connections already provided by Rogers and Shaw. Canoe's competition is rearming and Péladeau knows it.

ownstairs from where we conduct our interview, there's one part of the Quebecor building that has been spruced up. It's the funky street-level stu-

dio that Péladeau built last summer for Télévision Quatre Saisons. Péladeau figured the storefront studio would help TQS cultivate a smart new image and pull it out of the ratings hole that had been its home since its 1986 launch. And just in case anyone failed to notice, he threw a gigantic street bash to fete the opening. Quebecor's Le Journal de Montréal devoted its entire front page to a photo of the heartthrob CEO snipping the ribbon. A few days later, it slapped Péladeau's mug on page 1 again to mark the launch of an e-tail site by Quebecor-owned record chain, Archambault. Péladeau sees no conflict in Le Journal's blatant Quebecor boosting. "Every other [media]organization is doing it," he shrugs. "And I'm not gonna ask our competitors to promote our products."

Reporters, including those at Le Journal who've complained to the CRTC about the pressure they're under to pump TQS, may not like Péladeau's views. But they should get used to them. The Vidéotron purchase would tighten Quebecor's grip on the Quebec media market to a degree unheard of elsewhere in North America. Quebecor will control more than half of the province's private television market, more than two-thirds of its cable subscribers, at least half of its magazine sales, a huge chunk of its newspaper readership and its biggest Internet portals.

Péladeau may first have to overcome resistance from broadcasting and competition regulators, who have traditionally looked down on media cross-ownership.

Identifiable critics from other quarters are scarce. "It's a lose-lose situation," one ex-Quebecor executive explains as he assesses the consequences of going on the record with his views on Péladeau--his management style, specifically. In the end, he opts for discretion. "They aren't easy, the Quebecor people." The revolving door speaks for itself. At Le Journal de Montréal, a conspicuous number of senior managers left in 1999. The most recent high-profile departures at Quebecor are those of chief financial officer François Roy, Toronto Sun publisher Doug Knight (see Exit Interview, page 112), and Philippe Marinier, executive vice-president of Quebecor New Media.

Before them, the old guard left: chairman Charles-Albert Poissant, executive vice-president Raymond Lemay, and Quebecor Communications CEO Maurice Daigle all stepped down within 15 months of Pierre Péladeau's death in December, 1997. Jean Neveu, Pierre Péladeau's highly regarded CEO at the printing operations, was given a $2.6-million golden handshake and shuffled out of management. Unlike his father, who surrounded himself with able and trusted managers, Péladeau appears to have few close advisers. Opines one analyst: "It makes you wonder about the depth of management at Quebecor."

Péladeau balances his chair on its rear legs as he ponders this barb. "It is not unnatural to see people leaving a company," he says. "The newspapers talk about them, but they don't talk about the people joining Quebecor." Péladeau is proud of three recent recruits: former World Color president Marc Reisch; Nurun CEO Jacques Malo, a veteran technology executive; and Quebecor Communications head Jean-François Douville, formerly No. 2 of Rogers's Quebec operations. Since we spoke, he has hired Monique Leroux, Royal Bank's top executive in Quebec, as COO. Yet, there are other managers who choose to leave rather than submit to Péladeau's notorious rages and interminable meddling.

"He has this immense capacity for getting down into the weeds to learn what he needs to and pulling up and delegating at just the right time," counters John Paul Macdonald, who handled Quebecor's corporate communications for three years until last fall. When he ran the European operations, Péladeau was almost never seen without a gigantic binder under his arm that contained not only the specifications on every one of his company's presses, but on those of his competitors as well. Péladeau almost never had to open it, having memorized its contents.

Brian Mulroney, the former prime minister and member of multiple Quebecor boards, marvels at Péladeau's ability to conceptualize and communicate. "He stood up at a board meeting the other day and, before a blackboard and without any notes, gave the most complex presentation on all the new technologies, the kind you'd expect from an expert. It was quite a performance." Péladeau, Mulroney says, reminds him of a young Paul Desmarais. Unlike Desmarais, however, Mulroney insists he's never heard Péladeau utter a political opinion. This makes him a rarity among Quebec's leading CEOs. Indeed, the most legendary among them--Desmarais, Laurent Beaudoin, Péladeau's father--considered it their duty to intervene in politics. Desmarais and Beaudoin are strident federalists. Pierre Péladeau openly flirted with the separatists.

Péladeau is about to embark on an explanation of his apolitical nature when a loud crack punctuates the reporter's question. The dainty chair has finally succumbed under the strain of its occupant's balancing act. "Wow!" He is down on his knees now, inspecting the sorry wreck. "Go on," he orders, planting himself in a sturdier piece of furniture. And then delivers his response: "I don't think it's my role to comment on politics. It's not even of interest to me. I run a global company." He pauses an instant. "I don't care what's happening in Quebec or Canada."

It is hard not to read into Péladeau's scrupulous refusal to be drawn into Quebec politics and fierce protection of his privacy a conscious attempt to disavow his flamboyant father. Pierre Péladeau eschewed political

correctness and spoke wantonly of his personal life, his sexual conquests and battles with alcoholism and manic depression. He could be foul-mouthed, offensive and inelegant at times. He was, at the same time, a connoisseur of classical music and French literature and probably Quebec's leading arts patron. But he played down his finer features and revelled in the caricature he had created of himself.

Pierre Karl Péladeau himself became a father for the first time in March. It is hard to picture him as the doting dad. But he betrayed a bit of paternal pride during his evening Canoe chat when the usually private executive confided he liked to play with his daughter, Marie. "Fatherhood is going to change him," Mulroney predicts. The new father demurs. "My wife [French-born Isabelle Hervet]is taking care of the baby. I'll be [at home]as usual on the weekend." Within hours of his daughter's birth, Péladeau was putting in 20-hour days on what could well be the defining deal of his career. Then again, with Péladeau's ambitions, probably not.

THE QUEBECOR WEB

NEW MEDIA

Quebecor's Internet sites include canoe.ca, Canada's largest real-time news site; its French-language pendant, canoë.qc.ca; personal-finance site imoney.com; and car specialist autonet.ca. Meanwhile Nurun Inc., one of Canada's leading Web consulting firms, designs and manages the sites of dozens of companies and is fast becoming a leading player in France. The purchase of Vidéotron would add Web-site builder Netgraphe Inc., which owns French Canada's most popular search engine, La Toile du Québec.

FOREST PRODUCTS

With an 11% stake, Quebecor is the biggest shareholder in the world's largest newsprint producer, Abitibi-Consolidated Inc. It controls almost a third of the North American market.

PRINTING

Quebecor World Inc. is the globe's largest commercial printer--of catalogues, magazines, flyers, books--with 40,000 employees at 160 facilities on four continents and annual sales of more than $6 billion (U.S.). Time, Fortune, Sports Illustrated and Paris Match all roll off its presses.

PUBLISHING

Quebecor is a leader in most categories of Quebec's hotly contested magazine market: women (Clin d'oeil, Femme Plus), teenage girls (Filles d'Aujourd'hui), home décor, gardening and cooking. It's also the largest publisher of French-language books in Canada. If it buys TVA, Quebecor will also own Trustar, Quebec's leader in celebrity-gossip titles.

NEWSPAPERS

Canada's No. 2 newspaper chain includes Sun newspapers in five major markets, market leader Le Journal de Montréal, and scores of smaller dailies and weeklies. Acquisitions from Hollinger Inc. and Thomson Corp. will extend the empire.

BROADCASTING

Télévision Quatre Saisons is Quebec's second-largest private network. With the purchase of Vidéotron, Quebecor would also control Quebec's No.1 network, TVA.

RETAILING

Groupe Archambault is the largest Quebec-based music and books chain and on-line music retailer. Quebecor is also French Canada's biggest player in CD and video distribution though Distribution Select, Musicor/GAM and Distribution Trans-Canada.

CABLE

Vidéotron, sought by Quebecor, has 1.5 million residential cable subscribers in Quebec--a market share exceeding 66%.

Péladeau Peacekeeping

"He's not easy to deal with," offers Érik Péladeau, 45, when the subject of his younger brother is broached.

In his will, Pierre Péladeau invested Jean-Paul St-Louis, a retired Youth Court judge, with the power to vote the brothers' Quebecor shares--via the family holding company, the two have a 61.5% voting stake--if they came to an impasse. Érik Péladeau insists his decision to give up his operational role at Quebecor--to avoid "conflicts" with Pierre Karl--does not mean there have been any. Érik remains vice-chairman of the holding company and sits on the executive committees of its subsidiaries. Pierre Péladeau's decision to split control of his Quebecor shares equally between the two sons, Érik adds, ensures that they make all major decisions together.

"They've worked out a modus vivendi which they both enjoy," says Brian Mulroney, a director of Quebecor and its printing unit, and chairman of Sun Media. "Érik is very mature. Pierre Karl trusts him and trusts his judgment implicitly."

Indeed, the brothers pulled together last year in seeking a court order to divest St-Louis of his authority. The move was part of a carefully orchestrated offensive by the brothers to regain the advantage in a public-relations war they had been losing to St-Louis and their estranged sister, Anne-Marie Péladeau. A recovering cocaine addict, Anne-Marie, 35, had been receiving a $10,000 monthly allowance under a 1993 arrangement put in place by her father. Pierre Péladeau had aimed to prevent his troubled daughter from squandering her share of the family fortune. In early 1999, Pierre Karl and Érik stopped payment of the allowance; they told Anne-Marie they would resume it only if she entered a treatment program of their choosing. "What they are doing is not being done out of love," an angry Anne-Marie told La Presse. "They are doing it for control and power. It's cruel and unjust."

Anne-Marie Péladeau sought a court order to reinstate her allowance. St-Louis publicly sided with her. The family feud was front-page fodder for every Quebec daily save those controlled by the brothers. The duo were depicted in the non-Quebecor media as insensitive bullies. "It's their policy to make people do things by cutting the [financial]lifeline and [issuing]threats," St-Louis told a Montreal radio station. Other sordid details of the internecine warfare emerged in lawsuits launched by the brothers' half siblings--Esther, 22, and Simon-Pierre Péladeau, 21--and their mother, Line Parisien, Pierre Péladeau's second wife.

The publicity-shy brothers struck back with an astonishing public declaration. "We are extremely pained that certain people have knowingly chosen to expose our family difficulties in public through court procedures that appear to us to be unfounded, abusive and libellous," read the 800-word statement, published in Le Journal de Montréal. The riposte was orchestrated by Luc Lavoie, the Montreal public-relations guru who counts Mulroney as a showcase client. The legal offensive was led by Mulroney's firm, Ogilvy Renault, and Gérald Tremblay, the high-profile lawyer who represented Mulroney in his successful 1997 libel suit against the federal government.

The costly campaign appears to have worked. The brothers' recalcitrant, dial-a-quote siblings and St-Louis have remained incommunicado ever since, spurning interview requests. In November, St-Louis agreed to resign as an executor of the father's estate. The suits brought by Parisien and her two children were also quietly settled. And Anne-Marie Péladeau has agreed to stop talking to the media as long as her lawyers are involved in settlement talks.reed to resign as an executor of the father's estate. The suits brought by Parisien and her two children were also quietly settled. And Anne-Marie Péladeau has agreed to stop talking to the media as long as her lawyers are involved in settlement talks.

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About the Author

Columnist Konrad Yakabuski writes on politics, policy and business for The Globe and Mail’s Comment section and Report on Business. More

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