An Ontario judge has pushed a decision on whether Torstar Corp. will be sold to a group led by former Fairfax Financial Holdings Ltd. President Paul Rivett to a later date in order to review whether the deal was conducted in a "fair and reasonable manner."

The court hearing was the latest chapter over a dispute on who will take the 128-year-old publisher private: NordStar Capital LP, a group led by Rivett, businessman Jordan Bitove and former Ontario premier David Peterson, which offered 74 cents a share for the company; or Canadian Modern Media Holdings Inc. (CMMH), a firm led by Avesdo Chief Executive Officer Tyler Proud, that offered a higher bid valued at 80 cents a share on Monday. That offer was rejected by Torstar's board. 

Lawyers representing Torstar, the company's shareholders, and CMMH traded barbs on whether NordStar's offer was conducted in good faith and was the best bid presented to the newspaper chain's board. 

Ryan Morris, Torstar's counsel, argued the sale to NordStar should be approved by the Ontario court. He also stated CMMH's offer was the equivalent of "dust thrown up by a failed bidder" and the group demonstrated a repeated pattern of not providing relevant materials to the company's board in time. 

"CMMH is here to ask the court to overcome a negotiating tactic that backfired on them," Morris said. "Would [Torstar's] board have liked to have seen their offer? Sure, but they didn't get it."  

Morris also highlighted how 98 per cent of the votes cast by Torstar shareholders during a special meeting on Tuesday supported NordStar's bid. As well, nearly 82 per cent of votes by shareholders excluding the company's voting trust or a Fairfax subsidiary (which owns approximately 40 per cent of Torstar, according to Bloomberg data) backed the NordStar offer.

Justice Cory Gilmore, who presided over Thursday's hearing, will also decide later whether a sealed affidavit signed by Infor Financial Group Inc. CEO Neil Selfe, one of CMMH's backers, should be unredacted and become public record. Lawyers representing some of the aggrieved Torstar shareholders argued that the sealed document may contain further information that could show how the sale of Torstar to NordStar Capital wasn't conducted fairly. 

Joseph Groia, who represents at least two Torstar shareholders disputing the sale to NordStar, described the newspaper chain's chair, John Honderich, as "the Ronald Wayne of the 21st century" by selling the company for far less than its actual worth. Wayne was a co-founder of Apple Inc. and famously sold his stake in the company for about US$800. That stake is now estimated to be worth billions of dollars. Honderich declined to comment on Groia's remarks when reached by BNN Bloomberg. 

As well, CMMH's counsel, Alistair Crawley, told the court that Gilmore has a "Herculian task" to determine whether the sale of Torstar was conducted fairly within the constraints of a one-hour hearing that took place virtually over a Zoom meeting. 

Crawley added that the sealed document would contain further information on how negotiations between CMMH and Torstar's board resulted in an unfair outcome that would be of significant interest to shareholders. As well, Crawley alleged that Torstar's claims that CMMH's bid wasn't a firm proposal or lacked financing was "misleading," but that more details on that were contained in the sealed affidavit. 

Gilmore ended the hearing Thursday, stating that she needs an unspecified amount of time to review the filings and to consider whether to unseal Selfe's affidavit. 

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