that the Judgment could impair Inc.’s unfettered right under Delaware law to remove and elect
members of International’s board of directors.

Despite knowing that Inc.’s voting rights could be impeded by the Judgment, the SEC
failed to give any notice to Inc. of the Emergency Motion. Instead, on the same day that it filed
this action, the SEC brought the Emergency Motion to the emergency judge — Judge Gettleman.
Moreover, neither the Emergency Motion nor the Judgment even mentioned Inc., let alone gave
any hint that the entry of the Judgment could have a negative impact on Inc.’s voting rights.
Without knowing of the potential harm to Inc.’s interest, Judge Gettleman, relying solely on the
SEC’s written submissions and the fact that the named parties had consented, entered the
Judgment.

Accordingly, because Inc. had a legitimate interest at stake, this Court finds that the SEC
should have given Inc. notice and alerted Judge Gettleman to the possible adverse affect the
Judgment could have on Inc. Because the SEC failed to take the above actions, Judge Gettleman
did not have a complete and accurate view of the facts surrounding the entry of the Judgment,
and therefore, this Court finds that the Judgment should be partially vacated.

The Court, however, will only vacate the portions of Section IV that affect the exercise of
Inc.’s voting rights to elect or remove directors. To ensure the status quo (¢.g., preventing Inc.
from changing the composition International’s board of directors), however, the Court will stay
the entry of this order until the parties have had an opportunity to fully brief and be heard on

whether the facts warrant the impediments imposed on Inc.’s voting rights by the Judgment.'?

2 At the hearing on this motion, the SEC alleged that without the Judgment, Inc. would

have altered the composition of the board of directors and disbanded the Special Committee.
Although no evidence was presented to prove these allegations, the Court feels that these
allegations appear possible based on what transpired in the Delaware action between Inc. and

13



shall be consolidated or coordinated with other actions not brought by the [SEC], even
though such other actions may involve common questions of fact, unless such
consolidation is consented to by the [SEC].
15 U.S.C. § 78u(g) (emphasis added). The SEC and International contend that the above
language precludes Inc. from intervening. In response, Inc. asserts that because section 21(g)
does not specifically mention intervention, it is not precluded. Both sides’ positions are
supported by case law. Before discussing these cases, however, the Court will analyze section
21(g) under the rules of statutory construction.

When construing a statute, courts should look first at its language, which if clear and

unambiguous ends the analysis. Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1998).

Where a statute “is clear and without ambiguity, and where the legislative history so clearly
indicates the intention of Congress, [courts are] not permitted to read into the act words which

Congress has omitted.” United States v. Smoler Bros., 187 F.2d 29, 32 (7th Cir. 1951). See also

Sale v. Haitian Ctrs. Council, Inc., 509 U.S. 155, 168-69 n.16 (1993) (court should not add terms

or provisions to a statute where Congress has omitted them).

Here, because section 21(g) does not specifically prohibit “intervention,” the Court will
examine the legislative history to determine if Congress intended to do so. Congress enacted
section 21(g) to limit private plaintiffs from filing their own actions, “the allegations of which
closely follow those of the [SEC’s] action.” S. Rep. No. 94-74, at 74 (1975), 1975 U.S.C.C.A.N.
179, 252. The drafters were concerned that by “merely rid[ing] along on the Government’s
case,” the private actions would delay the enforcement action by “greatly increasing the need for
extensive pretrial discovery,” particularly with regard to damages which are not generally

required in an enforcement action for injunctive relief. Id. at 76. The Senate also noted that the



violates the “fundamental principles of corporate governance” — the allocation of power between
the corporate owners, the stockholders, and the directors, who control the corporation. Id. at
1126-27. Accordingly, the Delaware Supreme Court looks very unfavorably upon any device
“designed to interfere with or impede the effective exercise of corporate democracy by
shareholders, especially, in an election of directors.” Id. at 1127. See also Nycal Corp. v.
Angelicchio, 1993 WL 401874, at *3 (Del. Ch. Aug. 31, 1993) (Delaware corporate statute
“guarantees the right of a majority of shareholders to remove directors with or without cause”),”
Accordingly, under Delaware law and International’s corporate by-laws, Inc., as the majority
shareholder, has the unfettered right to remove and elect directors.

The issue before this Court thus is whether the Judgment could “impede” Inc.’s
“fundamental right” to vote to elect or remove International’s directors. Under the Judgment, if
Inc. votes to remove or fails to reelect any current director, a “Special Monitor” would
automatically be appointed to oversee International’s activities, at a cost of at least $750,000,
with a mandate to “protect the interests of the non-controlling shareholders.” (Judgment, section
IV.) The Special Monitor would then have the power to come into this Court to report and
contest any actions which the Special Monitor believes are not in the best interests of the
minority shareholders. According to Inc., the appointment of the Special Monitor would result
in “chaos” in the management of Inc. For example, routine corporate actions such as declaring
dividends and the purchase or sale of assets would not be able to be made without this Court first

examining the surrounding circumstances.

? In addition to Delaware jaw, section 2.3 of Intemational’s corporate by-laws expressly

permits Inc. to vote for the election and removal of International’s directors.



unliquidated claim in the company charged in an SEC enforcement action could intervene. In
making this decision, the Eighth Circuit noted that section 21(g) “does not say that no one may
intervene in action by the SEC... . . [indeed] [i]t does not [even] mention [Rule] 24, nor does
Rule 24 contain any clause giving special privileges to the SEC.” Id. Instead, the court found
that “the purpose of this subsection is simply to exempt the [SEC] from the compulsory
consolidation and coordination provisions applicable to multidistrict litigation.” Id.

A number of district courts, including at least one in this district, have followed the
reasoning of the Eighth Circuit and found that section 21(g) does not automatically preclude a
non-party from intervening in an enforcement action. See SEC v. Heartland Group, Inc., 2003
WL 1089366, at *3 (N.D. Ill. Mar. 11, 2003); SEC v. Credit Bancorp, Ltd., 194 F.R.D. 457, 465-
66 (S.D.N.Y. 2000); SEC v. Prudential Sec. Inc., 171 F.R.D. 1, 4-5 (D.D.C. 1997). However, at
least two courts in this district have held that section 21(g) operates as “an impenetrable wal!”
with regard to intervention. SEC v. Wozniak, 1993 WL 34702, at *1 (N.D. IIL. Feb. 8, 1993);

SEC v. Homa, 2000 WL 1468726, at *2 (N.D. Ill. Sept. 29, 2000).

In SEC v. Heartland Group. Inc., 2003 WL 1089366, at *3, in finding that section 21(g)

did not automatically preclude intervention, the court distinguished Wozniak and Homa. The

court found that in those cases, both “would-be intervenors attempted to recover from the very
defendants the SEC was suing.” Id. In Heartland, however, the intervenor did not seek to sue the
defendant in the enforcement action, but, instead, sought to protect its interest in property which
was subject to the enforcement action. Id.

Here, as in Heartland and Flight Transportation Corp., as discussed above, Inc. is not

attempting to recover damages from Intemational, but is only attempting to protect its interests,


private plaintiffs’ objective in filing suit was to receive damages and to adjudicate private
disputes “between citizens,” which is “very different” than the objective of an SEC
enforcement action — to fulfill the legislature’s “mandated scheme of law enforcement in the
securities area.” Id.

Here, none of the concerns cited by Congress above apply to this case. Inc. is not
attempting to intervene to assert its own private action against International. Instead, as
explained below, Inc., as the majority shareholder of International, is simply attempting to
protect its corporate voting rights, which could be affected by the entry of the Judgment. Indeed,
at the February 26, 2004, hearing on this motion, counsel for Inc. stated that Inc.’s only objective
in moving to intervene was to protects its rights as the majority shareholder. Likewise, the
Motion to Vacate seeks only to vacate those sections of the Judgment that affect Inc.’s voting
rights, not the sections which preclude International from violating securities law. Moreover,
Inc. has not filed a separate suit, but instead has filed an answer to the SEC’s complaint asserting
affirmative defenses. Therefore, because intervention is not specifically precluded by section
21(g) and the concerns cited by Congress are not implicated, this Court finds that, for the
purposes of this case, section 21(g) does not preclude Inc. from attempting to intervene under
Rule 247

This decision is supported by a number of cases, including the only circuit court to have
ruled on the issue. In SEC v. Flight Transpotation Corp., 699 F.2d 943, 950 (8th Cir. 1983), in

reversing the lower court’s denial of a motion to intervene, the court held that a creditor with an

3 The Court notes that although intervention will delay the final disposition of this case, “a

prolonged claim resolution process does not justify the application of section 21(g), where, in the
Court’s view, the provision was not intended to apply.” SEC v. Prudential Sec. Inc., 171 F.R.D.
1,5 (D.D.C. 1997).



In determining the alleged interest, the proposed intervenor need only claim an interest relating
to the suit; the fact that its claim ultimately fails does not affect its status as an intervenor.

American Nat. Bank and Trust Co. v. Bailey, 750 F.2d 577, 585 (7th Cir. 1984). Moreover,

because the interest to warrant intervention as of right is a “highly fact specific determination,
making comparison to other cases [is] of limited value.” Security, 69 F.3d at 1381.

In examining whether the proposed litigant’s interest is impaired, the court need only
determine whether the “purported interest could be decreased in value by a decision” in the

action. FTC v. Med Resorts Int’1, Inc.,199 F.R.D. 601, 606 (N.D. Ill. 2001) (emphasis added).

See also Shea v. Angulo, 19 F.3d 343, 347 (7th Cir. 1994) (“impairment exists when the decision
of a legal question . . . would, as a practical matter, foreclose the rights of the proposed
intervenor in a subsequent proceeding”).

Here, Inc., the majority shareholder of International with 72% of the voting shares and
30% of the equity, contends that the Judgment impairs its ability to exercise control over
International in accordance with Delaware law and International’s certificate of incorporation.
Specifically, Inc. asserts that its right to remove and elect corporate directors is adversely
affected by the Judgment. In response, the SEC and Intemational contend that the Judgment
does not prevent Inc. from exercising its right to vote. Before examining these contentions, the
Court must first look to Delaware corporate law.®

Under Delaware law, stockholders have a “fundamental right” to “vote on specific

matters, in particular, [the] election of directors.” MM Co.., Inc. v. Liquid Audio, Inc., 813 A.2d

1118, 1126 (Del. 2003). Anything which impedes the stockholders’ right to elect directors

6 International is incorporated in Delaware, and therefore, Delaware corporate law governs

Inc.’s rights as a shareholder.



Minute Order Form (06/97)

United States District Court, Northern District of Iinois

Name attic Juas | Blanche M. Manning | Sui Jue Oo
CASE NUMBER 04 C 0336 DATE March 1, 2004
CASE SEC v. Hollinger International
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the
MOTION: nature of the motion being presented.]
DOCKET ENTRY:
qd) oO Filed motion of [ use listing in “Motion” box above.]
(2) a Brief in support of motion due
(3) o Answer brief to motion due___. Reply to answer brief due
(4) Oo Ruling/Hearingon__sset for__att
(5) QO Status hearing[held/continued to] [set for/re-set for]on__——ssetfor_ at
(6) {aa} Pretrial conference[held/continued to] [set for/re-set for]on__—_—s set for sat.
(7+) o Trial[set for/re-set for]on___—_—at
(8) Oo {Bench/Jury trial] [Hearing] held/continued to___ at.
(9) Qo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

O FRCP4(m) OGeneral Rule21 GO FRCP41(a)(1) 0 FRCP41(a)(2).

(10) @ [Other docket entry] For the reasons set forth in the attached Memorandum and Order, Hollinger
Inc.’s Motion to Intervene [9-1] is GRANTED and Motion to Vacate [12-1] is GRANTED in part. The Court
will only vacate the portions of Section IV that affect the exercise of Inc.’s voting rights to elect or remove
directors. To ensure the status quo (e.g., preventing Inc. from changing the composition International’s board
of directors), however, the Court will stay the entry of this order until the parties have had an opportunity to
fully brief and be heard on whether the facts warrant the impediments imposed on Inc.’s voting rights by the
Judgment.

(il) Qa [For further detail see order on the reverse side of the original minute order.]

No notices required, advised in open court.

No notices required.

umber of notices

V_ | Notices mailed by judge's staff. MAR 02 7004

Notified counsel by telephone.

dave docketed

Docketing to mail notices.

Mail AO 450 form. docketing“deputy initiats

Copy to judge/magistrate judge. oS Chow So) re)
courtroom J date mailed notice
RTS depaty’s
initials

Date/time received in
central Clerk’s Office mailing deputy initials



Accordingly, this Court finds that Inc. may intervene as of right under Rule 24(a) because
it has shown that it has a legitimate interest which could be impaired and that the existing parties
may not adequately protect this interest.’

Il. Motion to Vacate

Next, because this Court finds that Inc. may properly intervene, the Court will examine
the Motion to Vacate the Judgment. First, however, the Court will briefly review the standard of
review for amending a judgment under Rule 59e).'°

While Rule 59(e) permits a litigant to alter or amend a judgment, it does not permit a

party to rehash previously raised arguments. Lewis v. Herman, 783 F. Supp. 1131, 1132 (N.D.

11.1991). The grounds for amending a judgment under Rule 59(e) “are newly discovered
evidence, an intervening change in the controlling law, and manifest error of law or fact.”
Cosgrove v. Bartolotta, 150 F.3d 729, 732 (7th Cir.1998). A number of courts have also held
that a judgment may be altered to prevent a “manifest injustice.” See C.H. Robinson Worldwide.

Inc. y. Nat’} Prod. Corp., 2002 WL 99735, at *1 (N.D. Ill. Jan. 25, 2002); Bollig v. Christian

Community Homes and Servs., Inc., 2003 WL 23211142, at *2-3 (W.D. Wis. Oct. 27, 2003);
Firestone v, Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996). Whether to grant a Rule 59 motion

“is entrusted to the sound judgment of the district court.” Matter of Prince, 85 F.3d 314, 324 (7th

Cir. 1996).

Here, after reviewing the law and the facts surrounding the entry of the Judgment, this

° The SEC and International have not contested the timeliness of the Motion to Intervene,

and based on the current record, this Court finds the motion is timely, as it was filed 10 days
after entry of the Judgment.

0 Inc. also moved to vacate the Judgment under Rule 60(b)(3) and (6). Because this Court

finds that the motion has merit under Rule 59(e), it will not discuss Rule 60.

1



After reviewing Delaware law and the current factual record, this Court agrees with the
SEC and International that Inc. could still exercise its voting rights. This, however, is not the
issue. The issue is whether the Judgment could “impede” Inc.’s “fundamental right” to vote to
elect or remove International’s directors. After careful consideration, this Court finds that
although Inc. could still vote with the Judgment in place, its unfettered and fundamental right to
do so, under Delaware law, could be impeded by the Judgment. Thus, this Court finds that Inc.
has shown an interest which could be impaired by the Judgment.*

As for adequacy of representation, the required showing is “minimal.” Med Resorts Int’]

Inc.,199 F.R.D. at 606. “[T]he movant need only show that the representation of his interests

may be inadequate.” Id. (emphasis added) (citing Trbovich v. United Mine Workers of Am., 404

US. 528, 538 n.1 (1972)). See also Miami Tribe of Oklahoma v. Walden, 206 F.R.D. 238, 243

(S.D. Ill. 2001).

Here, based on the parties’ submissions, statements in court, and the on-going litigation
in Delaware, the Court finds that Inc.’s interests may not be adequately represented by the SEC
and International. For example, the SEC sought entry of the Judgment, which, as explained
above, could affect Inc.’s voting rights, without giving Inc. any notice whatsoever. Moreover,
the directors and management of International are currently involved in litigation in Delaware
state court against the management of Inc. Thus, Inc. has shown that the SEC and International

may not adequately represent Inc.’s interests in this action.

8 The Court notes that although Inc. has shown its voting rights, as protected under

Delaware law, could be impaired, the Court, at this time, does not make a finding that the
Judgment is in contravention of Delaware Corporate law. It is entirely possible that the
Judgment could be properly entered based on the conduct of Inc. and other related parties.

At this time, however, the Court does not believe that the SEC or International have put forth
sufficient evidence to warrant such a drastic measure.

10


as majority shareholder — namely its corporate voting rights — which are affected by the

Judgment. Therefore, this Court finds Wozniak and Homa distinguishable and holds that section

21(g) is not an absolute bar to intervention in this action by Inc.

B. Intervention Under Rule 24

Having determined that section 21(g) does not preclude Inc. from moving to intervene,
the Court will next examine whether Inc. is entitled to intervene as of right, pursuant to Federal
Rule of Civil Procedure 24(a).‘

To intervene as a matter of right, the proposed litigant is required to show: (1) an interest
relating to the subject of the action; (2) the disposition of the matter would likely impair or
impede its ability to protect its interests; (3) the existing parties to the suit would not adequately
represent its interests; and (4) the motion is timely.’ Sokaogan Chippewa Community v. Babbitt,
214 F.3d 941, 945-6 (7th Cir. 2000). Here, the SEC and International contend that Inc. has
failed to show that it has a legitimate interest which would be impaired or that the existing
parties would not adequately protect its interests.

Although “the “interest required by Rule 24(a)(2) has never been defined with particular
precision,” the would-be intervener's interest must be a “direct, significant, legally protectable
one... . something more than a mere ‘betting’ interest, but less than a property right. . . .”

Security Ins. Co. of Hartford v. Schipporeit, Inc., 69 F.3d 1377, 1380-81 (7th Cir. 1995).

4 Because this Court finds that intervention is proper under Rule 24(a), it will not address

Inc.’s assertion that it may permissively intervene under Rule 24(b).

5 When analyzing an intervention motion, courts should “construe Rule 24(a) liberally,”

Miami Tribe of Oklahoma v. Walden, 206 F.R.D. 238, 241 (S.D. Ill. 2001), and “must accept as
true the non-conclusory allegations of the motion,” Reich v. ABC/Y ork-Estes Corp., 64 F.3d
316, 321 (7th Cir. 1995), “resolving doubts in favor of intervention.” Walden, 206 F.R.D. at 241.



are attempting to thwart and obstruct the efforts of the Special Committee.” Attached to the
emergency motion was a document styled “Consent of Defendant Hollinger International, Inc.,”
in which International consented to the entry of a partial final judgment and waived its right to
appeal.

Relying solely on the SEC’s written submissions and presumably without being advised
of the potential effect on Inc.’s interests, Judge Gettleman, entered the Partial Final Judgment
and Order of Permanent Injunction and Other Equitable Relief (“the Judgment”), which was
attached to the Emergency Motion.” Ten days after the entry of the Judgment, Inc. brought the
instant motions to intervene and to vacate the Judgment, which are currently before the Court.

ANALYSIS
L Motion to Intervene

The SEC and International contend that Inc. should not be permitted to intervene
because: (A) section 21(g) of the Securities Exchange Act of 1934 (15 U.S.C. § 78u(g)) bars
intervention in enforcement actions brought by the SEC; and (B) it has failed to meet the
requirements of Federal Rule of Civil Procedure 24. The Court will address each of these
contentions in turn.

A. Section 21(g) and Intervention in an SEC Enforcement Action

Section 21(g) states that:

[nJot withstanding the provisions of section 1407(a) of Title 28, or any other provision of
law, no action for equitable relief instituted by the [SEC] pursuant to the securities laws

2 The portion of the Judgment at issue is the section which states that if Inc. votes to

remove any of International’s current directors or fails to reelect any director, a “Special
Monitor” would automatically be appointed to oversee International’s activities, at a cost of at
least $750,000, with a mandate to “protect the interests of the non-controlling shareholders.”
(Judgment, section IV.)



Although Inc. has shown its voting rights, as protected under Delaware law, could be
impaired, the Court, at this time, does not make a finding that the J udgment is in contravention
of Delaware Corporate law or that the Judgment not could be entered as currently worded.
Instead, this Court simply finds that Inc. should have been given notice and an opportunity to be
heard before entry of the Judgment. In moving for the Judgment, the SEC asserted that the
“triggering events” to appoint the Special Monitor were needed because “there have been
growing indications that some of the very same [International] corporate insiders and related
entities who improperly received corporate assets are attempting to thwart and obstruct the
efforts of the Special Committee.” Based on the current record, the Court cannot, at this time,
determine whether this statement is true, and if it is true, whether this Court could enter an order

limiting Inc.’s right to vote under Delaware law."? _

International.
8 On February 26, 2004, after the hearing on this matter, the court in the Delaware action
(Hollinger International, Inc. v. Black, 2004 WL 360877 (Del. Ch.), issued an opinion. While
the court did state that the Judgment was not at issue, id, at *23 n.63, it did find that the terms of
the Judgment did not prohibit Inc. from exercising its right to vote. Id. at *55-56. Although the
Court has ruled, the parties are free to address if, and to what extent, the recent Delaware
decision has on this action.

14



company, International is controlled by Inc. which owns 30% of its equity and 72% of its voting
rights. The SEC alleges that from 1999 until at least 2001, International made unauthorized
transfers of at least $32 million to corporate insiders and related entities, including Inc. In an
attempt to hide these transactions, International allegedly made false statements and failed to
disclose material information in violation of the Securities Exchange Act of 1934 and SEC rules.

In response to complaints by shareholders, International’s board of directors established a
special committee of independent directors (“the Special Committee”) to investigate and recover
these unauthorized transfers. The Special Committee’s investigation appeared to be successful
in that International admitted $32.15 million in unauthorized payments to Inc., Conrad Black, the
former CEO of International and owner of a controlling interest in Inc., and David Radler,
International’s former president and COO and current COO of Inc. In a November 2003
agreement, Inc. and Black agreed to a repayment plan. Before the first repayment, which was
due on January 18, 2004, however, the SEC alleges that Black began to make public statements
indicating that he had done nothing wrong and might not be obligated to repay the alleged
unauthorized transfers.

On January 16, 2004, two days before the first repayment was scheduled, the SEC
brought the instant action against International, alleging violations of the securities laws and
seeking injunctive and other equitable relief. On the same day that it filed this action, the SEC
brought an Emergency Motion for Entry of Settled Partial Judgment and Order (“Emergency
Motion”), before Judge Gettleman, the emergency judge presiding at that time. The Emergency
Motion stated that “there have been growing indications that some of the very same

[International] corporate insiders and related entities who improperly received corporate assets



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
SECURITIES AND EXCHANGE )
COMMISSION, )
)
Plaintiff, )
y Hon. Blanche M. Manning
v. )
) Case No. 04 C 0336
: ONAL, INC. DOCKETED
HOLLINGER INTERNATIONAL, INC, )
) MAR 0 2 2004
Defendant. )
MEMORANDUM AND ORDER

Plaintiff Securities and Exchange Commission (“the SEC”) brought the instant
enforcement action for injunctive and other equitable relief against Hollinger International, Inc.
(“Intemational”), alleging violations of federal securities laws. On the same day it filed this
action, the SEC brought an emergency motion seeking entry of a partial final judgment, which
was entered that day. Hollinger, Inc. (“Inc.”), the majority shareholder of International, now
moves to intervene and to vacate the partial judgment. For the reasons set forth below, these
motions are GRANTED.

BACKGROUND’

This action arose from a corporate dispute between a parent (Inc.) and its subsidiary
(international). International, a publicly traded corporation incorporated in Delaware, is one of
the larger newspaper publishers in the world, whose publications include the Chicago Sun-

Times, the Jerusalem Post, and the London Daily Telegraph. Although a publicly traded

} The facts in the Background section are derived from the SEC’s complaint and the

parties’ submissions and attachments thereto.



Court finds that: (1) Inc. should have been given notice and an opportunity to object to the
Judgment before it was entered by Judge Gettleman, and (2) it appears, based on the parties’
representations to this Court and what took place before Judge Gettleman, that the SEC and
International failed to present a complete factual picture to Judge Gettleman, which in tun,
prevented him from properly assessing whether the Judgment was fair, reasonable, or if, and to
what extent, it affected the rights of Inc.

When the parties to a dispute agree to the entry of a consent order, which may require
continuing supervision or impose costs on non-parties, the court “must not mibberstamp the
proposed consent order but must review it carefully to make sure that it does not create undue (]

burdens.” Blankenship v. N.L.R.B., 54 F.3d 447, 449 (7t h Cir. 1995). See also N.L.R.B. v.

Brooke Indus., Inc., 867 F.2d 434, 435 (7th Cir. 1989) (courts should reject consent judgments
which affect the rights of third parties), Additionally, in determining whether to enter a
proposed consent order, the court should determine whether it is lawful, fair, reasonable, and
adequate. E,E.O.C, v. Hiram Walker & Sons, Inc., 768 F.2d 884, 889 (7th Cir. 1985).""
Moreover, anytime the government brings an action which may deprive a party of a property
right, the party, whose interests are affected, must receive notice and be afforded an opportunity
to protect its rights. United States v. James Daniel Good Real Prop., 510 U.S. 43, 48-49 (1993).
Here, the SEC and International do not contest a non-party’s right to notice, where that
party has a right adversely affected by the entry of a consent order. Instead, they contend that
Inc. did not have a right to notice or to object to the Judgment because it does not have a legally

viable interest affected by the Judgment. As explained in detail above, however, this Court finds

u In SEC v. Woldcom, Inc., 273 F. Supp. 2d 431, (S.D.N.Y. 2003), the court applied many
of the above factors to a settlement agreement in a securities action brought by the SEC.

12



CONCLUSION
For the reasons discussed, Hollinger Inc.’s Motion to Intervene [9-1] is GRANTED and

Motion to Vacate [12-1] is GRANTED in part. It is so ordered.

ENTER: Wh ned Mert,

BLANCHE M. MANNING’

U.S. DISTRICT COURT JUDGE
DATE:_3 //

1S