RSM Richter

Twenty-Sixth Report of RSM Richter Inc. Re: The Raveiston Corporation Limited, Raveiston Management Inc1, Argus Corporation Limited

RSM Richter Inc. , April 16, 2008

26thjeportjo_court-v5-#1 86669-DMTOR.DOC Table of Contents

INTRODUCTION...... 1 1.1 Overview ...... 1 1.2 Currency...... 2

2. RCL LITIGATION ...... 2 2.1 U.S. Civil Proceedings ...... 2 2.1.1 Hollinger International v. Hollinger Inc., et al.; Case No. o4-C-0968 ...... 3 2.1.2 Hollinger International Securities Consolidated Class Action; Case No. o4-C-0834 ...... 3 2.1.3 SEC v. Black et al.; Case No. O4C-7337 ...... 5 2.2 Canadian Civil Proceedings ...... 6 2.2.1 Canadian Class Actions ...... 6 2.2.2 Hollinger Inc. Action ...... 6 2.2.3 The Hollinger Group v. Black et al ...... 7 2.2.4 RCL, RMI and Argus ...... 7 2.2.5 Former Directors of RCL ...... 7

3. HOLLINGER INC ...... 8 3.1 Hollinger's CCAA Proceedings ...... 8

4. CRIMINAL PROCEEDINGS ...... 10 4.1 Appeals of Convictions by the Defendants ...... 10

5. ARGUS ...... 10 5.1 Artwork ...... 10

6. BANKRUPTCY APPLICATIONS ...... 11

7. INTERIM STATEMENT OF RECEIPTS AND DISBURSEMENTS ...... 12

8. CCAA STAY OF PROCEEDINGS ...... 12

9. CONCLUSIONS AND RECOMMENDATIONS ...... 13

26th_report_to_court-v5-#1 86669-DMTOR.DOC Index of Appendices

Appendix "A" CCAA Term Sheet dated March 24, 2008

Appendix "B" Interim Statement of Receipts and Disbursements for the period April 20, 2005 toApril 14, 2008

26thjeportjo_court-v5-#1 86669-DMTOR.DOC Court File No. 05-CL-5863

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENTACT, R.S.C. 1985, C. C-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF THE RAVELSTON CORPORATION LIMITED AND RAVELSTON MANAGEMENT INC.

AND IN THE MATTER OF THE BANKRUPTCYAND INSOL VENCYACT, R.S.C. 1985, C. B-3, AS AMENDED, AND THE COURTS OFJUSTICEACT, R.S.O. 1990, C.C.43, AS AMENDED

TWENTY-SIXTH REPORT OF RSM RICHTER INC.

April 15, 2008

1. INTRODUCTION 1.1 Overview

This report ("Twenty-Sixth Report") is filed by RSM Richter Inc. ("Richter") in its capacity as receiver and manager, interim receiver and monitor (collectively the "Receiver") of The

Ravelston Corporation Limited ("RCL"), Raveiston Management Inc. ("RMI"), Argus

Corporation Limited ("Argus"), 509643 N.B. Inc., 509644 N.B. Inc., 509645 N.B. Inc., 509646

N.B. Inc. and 509647 N.B. Inc. (collectively, the "N.B. Subs" and, together with RCL, RMI and

Argus, the "Companies").

The Companies' stay of proceedings granted pursuant to the Initial Order and Supplemental

CCAA Order has been extended several times, most recently by Order dated November 7, 2007. The stay of proceedings currently expires on April i8, 2008.

RSM Richter Page 2

The purpose of this Twenty-Sixth Report is to:

a) Update the Court regarding the Receiver's activities and events in the receivership, or impacting the receivership, since the filing of the Receiver's twenty-fifth report dated January 25, 2008 (the "Twenty-Fifth Report"), including:

• The status of the litigation proceedings involving the Companies in and the U.S.;

• The status of Hollinger Inc. ("Hollinger") and its proceedings under the Companies' Creditors Arrangement Act ("CCAA");

The status of the U.S. Criminal Proceedings (as defined below); and

• The status of the sale of the Argus Artwork (as defined below).

b) Request that this Honourable Court make an order: • Approving the Twenty-Sixth Report and the activities of the Receiver as described herein;

• Approving the Receiver's interim statement of receipts and disbursements for the period April 20, 2005 to April 14, 2008;

• Granting an extension of the stay of proceedings to June 30, 2008; and

• Granting an extension of the return date for the RCL and RMI bankruptcy applications to June 30, 2008.

1.2 Currency

All references to currency are to Canadian dollars unless otherwise noted.

2. RCL LITIGATION 2.1 U.S. Civil Proceedings

The U.S. civil proceedings to which RCL, RMI and Argus are named defendants have been described in the Receiver's prior reports, including the Twenty-Fifth Report. The following is an update of developments in those proceedings: Page 3

2.1.1 Hollinger International V. Hollinger Inc., et a!.; Case No. 04-C-0968 (the "Illinois Action")

As reported in the Twenty-Fifth Report, on January i6, 2008, Judge Valdez (who is responsible

for all discovery and non-dispositive motions) issued a ruling denying Sun-Times" motion to set

a schedule for discovery and continued the stay of proceedings on account of the pending

appeals by the Defendants in the criminal proceedings.

In accordance with the pending settlement agreement reached between Sun-Times and

Hollinger, at a hearing on April 3, 2008, Sun-Times and Hollinger sought a conditional order of voluntary dismissal, with prejudice, of Sun-Times' action against Hollinger and Hollinger's

counter-claim against Sun-Times. ("Black") objected to the conditional dismissal of the respective claims. The remaining defendants, including RCL and RMI, took no position on the dismissal. Black was given until April 10, 2008 to file a written objection to the joint motion of Sun-Times and Hollinger. Black, in his response, did not object to an order that is without prejudice, if the dismissal converts to an order of dismissal with prejudice if the

Hollinger CCAA settlement is approved (the settlement is described in more detail in Section 3.1 below), Sun-Times and Hollinger filed a joint reply on April 14, 2008 and are now only seeking a "without prejudice" dismissal. Judge Manning set a hearing date for Sun-Times and

Hollinger's joint motion and Black's objection for April 15, 2008.

2.1.2 Hollinger International Securities Consolidated Class Action; Case No. 04-C-0834 (the "U.S. Class Action")

As reported previously, pursuant to an agreement to settle the securities class action suits, currently pending in the United States and Canada (the "Class Action Settlement"), certain insurance carriers providing coverage to defendants for claims asserted in the class action suits will pay a total of $30,000,000 in cash to a settlement fund (along with an additional

'Capitalized terms as defined in previous reports. Page 4

$7,500,000 to be paid by KPMG LLP Canada and the U.S. defendants) to be distributed to

claimants pursuant to a plan of allocation and in exchange for releases to the defendants (the

"Insurance Settlement").

On March 4, 2008, Judge Coar continued the scheduled status hearing until April 7, 2008. The

April 7, 2008 status hearing was also adjourned and continued by Judge Coar to May 7, 2008 based on a status report filed on April 4, 2008 ("Status Report"), by Co-Lead U.S. counsel for the Plaintiffs ("Co-Lead Counsel"). The Status Report updated Judge Coar as to the progress of satisfying the preconditions to the Class Action Settlement which are required before the Class

Action Settlement can be presented to Judge Coar for preliminary approval and the scheduling of a final approval hearing.

Previously, on February 29, 2008, Co-Lead Counsel had filed a status report advising that counsel for the defendants and counsel for plaintiffs in the related Canadian Class Actions (the

"Canadian Plaintiffs' Counsel") were requesting time to review and approve the various ancillary settlement papers, which process was expected to take three to four weeks.

On April 4, 2008, Co-Lead Counsel reported to Judge Coar that the review by Canadian

Plaintiffs' Counsel was substantially completed, and that the Plaintiffs were prepared to move for preliminary approval of the Class Action Settlement before Judge Coar during the week of

April 4, 2008; however, they recently learned that Canadian Plaintiffs' Counsel in the Canadian

Class Actions was seeking to increase from $380,000 to $715,000 the amount to which it is entitled for fees, disbursements and taxes. Pursuant to the Class Action Settlement, Canadian

Plaintiffs' Counsel fees are presently limited to $380,000 for these amounts. Page 5

In the April 4, 2008 status report, Co-Lead Counsel reported that they are currently negotiating

with Canadian Plaintiffs' Counsel as to the amount which Canadian Plaintiffs' Counsel can seek

in fees and expenses. The Receiver understands that any increased amount must then be

approved by U.S. Plaintiffs' Counsel, the Lead Plaintiff and the named plaintiffs in the U.S. Class

Action, as well as the defendants and their counsel. Once approved, notices and related

documents to the Class Action Settlement must be revised to reflect the new agreement and its

corresponding impact on distributions to the members of the Class Action Settlement. Co-Lead

Counsel has advised that it expects that the Plaintiffs will be able to file for preliminary approval

of the Class Action Settlement before Judge Coar by the end of the week of April 14, 2008.

The Receiver understands that the amount of additional fees to be paid to Canadian Plaintiffs'

Counsel would be paid from the Class Action Settlement Fund, not from any additional contribution by the Defendants or their insurers. Approval of the Class Action Settlement is not dependant upon approval of the revised fee request made by Canadian Plaintiffs' Counsel. The

Receiver also understands that none of the other Defendants have objected to this request.

2.1.3 SEC v. Black eta!.; Case No. 04-C-7337 (The "SEC Action")

On March 25, 2008, Hollinger announced that the U.S. Securities and Exchange Commission

(the "SEC') accepted an Offer of Settlement and a Consent submitted by Hollinger relating to proceedings initiated by the SEC on November 15, 2004 in the Illinois District Court against Black, David Radler ("Radler") and Hollinger. Hollinger has consented to the entry of Final

Judgment against it, without admitting or denying the facts contained in the SECs complaint.

The Final Judgment was approved by Judge Hart on April 2, 2008. It provides, among other things, for the disgorgement of approximately US$21.28 million (representing US$16.55 million in alleged non-competition payments received by Hollinger, plus interest thereon), against which will be credited the same amount already paid to STMG in satisfaction of the Delaware Page 6

Court of Chancery judgment against Hollinger and Black in Hollinger International Inc. v.

Black, et al. As a result, the SEC settlement does not involve the payment of any money from

Hollinger to any party.

The SEC had also previously filed a motion for summary judgment against Black. Black filed a response to the motion on February 20, 2008. On March 12, 2008, the SEC filed a reply in support of its motion. On March 24, 2008, Black brought a motion for leave to file a sur-reply brief in opposition to the SECs motion for summary judgment as against Black. Both Black's motion for leave to file a sur-reply and the SEC motion for entry of the consent judgment against

Hollinger were heard by Judge Hart on April 2, 2008 and granted. None of RCL, RMI and

Argus is a defendant to the SEC Action.

2.2 Canadian Civil Proceedings 2.2.1 Canadian Class Actions The Companies are subject to class action proceedings in Saskatchewan, Ontario and Quebec

(collectively the "Canadian Class Actions"). The Canadian Class Actions remain stayed against the Companies in accordance with the provisions of the Receivership Order and Initial Order.

The Canadian Class Actions are to be settled in accordance with the terms of the Class Action

Settlement discussed above.

2.2.2 Hollinger Inc. Action Hollinger and Domgroup commenced an action against, inter alia, RCL and RIVII, claiming

$500 million in damages relating to amounts allegedly owed by RCL and RMI. That action remains stayed by virtue of the Receivership and Initial Orders. Page 7

2.2.3 The Hollinger Group v. Black et aL

Pursuant to Orders of this Honourable Court dated January 27, 2006 and February 27, 2006,

Hollinger, Domgroup, 532252 Canada Inc., TSI and Sugra Limited (collectively, "The Hollinger

Group") commenced a second action against RCL, RMI, and Argus et aL for, inter alia,

contribution and indemnity in respect of existing U.S. and Canadian litigation (the "Hollinger

Group Claim"). In addition, the Hollinger Group added the N.B. Subs as additional named

defendants. That action remains stayed against the Companies by virtue of the Receivership

and Initial Orders.

2.2.4 RCL, PM! and Argus

As previously reported, RCL, RMI and Argus commenced actions in the Ontario Court (the

"Ravelston Contribution Actions") against Black, Amiel-Black, John Boultbee ("Boultbee"),

Radler, Peter Atkinson ("Atkinson"), Daniel Colson, Moffatt Management Inc. ("Moffatt

Management") and Black-Amiel Management Inc. ("Black-Amiel Management") for contribution and indemnity with respect to claims which have been made against RCL, RMI and

Argus in the U.S. and Canadian Litigation. There have been no further developments in the

Raveiston Contribution Actions. The Ravelston Contribution Actions are not affected by the terms of the Class Action Settlement. That is, none of the insureds, as defendants in any proceedings, have released any claims as against one another.

2.2.5 Former Directors of RCL

As also previously reported, there have been no further developments in the contribution and indemnity actions commenced by the former directors of RCL, RMI and Argus, Moffatt

Management and Black-Amiel Management. These claims for contribution and indemnity are also unaffected by the Class Action Settlement and the Insurance Settlement. They are also stayed by virtue of the Receivership and Initial Orders. Page 8

3. HOLUNGER INC. 3.1 Hollinger's CCAA Proceedings

Hollinger, 4322525 Canada Inc. ("432") and Sugra Limited (the latter two being subsidiaries

through which Hollinger holds its Sun-Times shareholdings (collectively, the "Applicants")),

applied for and were granted relief under the CCAA on August 1, 2007.

There have been various extensions of the stay of proceedings in Hollinger's CCAA proceedings.

Most recently at an attendance before Justice Campbell on April 15, 2008, the parties involved

in the proceedings were informed that pending motions are to be dealt with in accordance with a schedule for the delivery of materials and cross-examinations, if any, as filed by Ernst & Young

Inc., Hollinger's CCAA Monitor, with the Ontario Court, with a hearing tentatively scheduled for

May 14 and 15, 2008. It is expected that the stay of proceedings currently scheduled to expire on April 23, 2008 will be extended to a date after the tentative date set for the hearing of the motions.

On March 25, 2008, the Applicants announced that they had entered into a settlement agreement (the "Settlement Agreement") with Sun-Times. In order to become effective, the

Settlement Agreement must be approved by the Ontario Court and the United States

Bankruptcy Court for the District of Delaware.

The Settlement Agreement is part of an Amended Plan Term Sheet to be filed by the Applicants with the Ontario Court (the "Term Sheet") for specific relief that the Applicants will be seeking in the CCAA proceedings, which is anticipated to be heard by Justice Campbell on April 22-23, 2008. The Settlement Agreement provides for the resolution of all outstanding matters between the Applicants and Sun-Times and would form the basis for a plan of arrangement (the "CCAA

Plan") that may be prepared by the Applicants within the CCAA proceedings. The Term Sheet incorporating the Settlement Agreement is attached as Appendix "A" to this Report. Page 9

As described in more detail in the Term Sheet, the terms of the Settlement Agreement include:

(i) the exchange of the existing Class B shares (being the multiple voting shares) of Sun-Times

held by Hollinger for an equal number of Class A shares of Sun-Times in order to eliminate

Hollinger's voting control of Sun Times; (ii) Sun-Times will also issue to Hollinger 1,499,000

additional Class A Shares of Sun-Times (representing io% of the existing number of Hollinger

and 432's class A shares of Sun-Times) upon the later of implementation of Hollinger's CCAA plan of arrangement or the approval by Sun-Times' stockholders, if Sun-Times' stockholder approval is required; (iii) execution of mutual releases between Hollinger and Sun-Times, with the exception of certain allowed claims by Sun-Times against Hollinger; (iv) the resignation of

William Aziz ("Aziz"), Brent Baird, Albrecht Bellstedt, Peter Day, Edward Hannah and Wes

Voorheis ("Voorheis") from Sun-Times' board of directors; (v) the appointment of a litigation trustee to supervise, control and administer litigation assets of Hollinger and its subsidiaries (vi) reduction or elimination of Hollinger's board of directors and the resignation of Voorheis as

Chief Executive Officer of Hollinger; (vii) the appointment of Aziz as chief restructuring officer of Hollinger; and (viii) payment by Hollinger of Sun-Times' reasonable fees and costs incurred in connection with Hollinger's CCAA proceedings to a maximum of $i million.

Davidson Kemper Capital Management LLC ("DK") is not a party to the Settlement Agreement.

Prior to the announcement of the Settlement Agreement, DK brought a motion requesting that the Ontario Court grant an order (a) terminating the Hollinger CCAA proceedings and (b) placing Hollinger in bankruptcy. Page 10

4. CRIMINAL PROCEEDINGS 4.1 Appeals of Convictions by the Defendants

Each of Black, Boultbee, Atkinson, and Mark Kipnis ("Kipnis") filed Notices of Appeal to their

respective convictions. Black, Boultbee and Atkinson also filed motions with the U.S. Court of

Appeals (Seventh Circuit) ("Court of Appeals") requesting that they remain free on bail pending

the disposition of their respective appeals. The Boultbee and Atkinson motions were granted

and Black's was denied. On March 26, 2008, the Court of Appeals further amended the

previously ordered schedule for the hearing of the appeals. In accordance with the schedule, the

Appellants filed a joint opening brief on March 13, 2008; the Government is to file its

responding materials by May 1, 2008 and the Appellants are to file their reply material, if any,

by May 15, 2008. Argument on the appeal is anticipated before the end of the Court's term in

June, 2008.

5. ARGUS 5.1 Artwork

As discussed in the Receiver's Twenty-Fifth Report, Argus' assets included a collection of

artwork (the "Artwork"), including three paintings of Black by Andy Warhol (the "Warhols").

In accordance with the Artwork Settlement Agreement as approved by the Court on

September 27, 2007, the first Warhol was auctioned by Christie's on November 14, 2007 in New

York for a "hammer price" of US$240,000.

On February 7, 2008, the second Warhol was auctioned by Christie's in London, England and realized a "hammer price" of £150,000. Page ii

Black exercised his option to purchase the third Warhol (previously referred to as the "Pink"

Warhol) for US$265,650 (the average of the "hammer prices" realized at auction of the first and second Warhols). The Receiver received those funds on February 26, 2008.

The bond provided by Black under the Artwork Settlement Agreement (the "Artwork Bond") expired on February 29, 2008. After the purchase by Black of the third Warhol, the Artwork Bond was returned to Black.

The status of the remaining Artwork is as follows:

1. Sailing Boats by Lewsey - This painting was auctioned by Joyner Waddington Canadian Fine Art ("Waddington") on November 27, 2007. The net proceeds realized at auction were immaterial (as was anticipated).

2. Battleship by Beament - This painting is scheduled to be auctioned by Waddington on May 27 or 28, 2008.

3. Wayfarers by Watts - This painting is to be auctioned by Christie's. The auction date is not presently known.

4. Pleasure Boats by Rapp - The location of this painting is unknown. The appraised value of this painting is nominal ($4,000).

6. BANKRUPTCY APPLICATIONS

On March 1, 2006, the Honourable Mr. Justice Farley granted an order temporarily lifting the stay of proceedings against RCL and RMI in order to allow for the filing of bankruptcy applications against each of RCL and RMI and naming Richter as the proposed trustee in bankruptcy. The primary purpose of filing the bankruptcy applications was to crystallize the date for potentially challenging voidable transactions among related parties. Page 12

The bankruptcy applications are currently returnable on April i8, 2008. The Receiver remains of the view that pending the final outcome of Hollinger's CCAA proceedings, it may be appropriate to consider terminating some or all of the CCAA proceedings. At this time, there is limited cost to continue the CCAA proceedings, and thus, the Receiver believes the decision to terminate the CCAA proceedings should continue to be deferred until the outcome of Hollinger's

CCAA proceedings is substantially resolved.

7. INTERIM STATEMENT OF RECEIPTS AND DISBURSEMENTS

An interim Statement of Receipts and Disbursements (the "R&D Statement") for the period

April 20, 2005 (the date of the Receiver's appointment) to April 14, 2008 is attached as

Appendix "B". The R&D Statement reflects approximately $57,000 and $1.6 million currently on deposit in the Receiver's estate bank accounts maintained for RCL, RMI and Argus2.

There is a further $3.9 million in a segregated trust account (the "Trust Account"), representing a portion of the proceeds of a settlement agreement between RCL and CanWest Global

Communications Corporation, which was approved by this Honourable Court pursuant to an order issued on August 25, 2006. The funds in the Trust Account cannot be drawn without prior approval of this Honourable Court.

8. CCAA STAY OF PROCEEDINGS The stay of proceedings granted under the Initial Order and Supplemental CCAA Order currently expires on April i8, 2008.

2 Includes US dollars converted to Canadian dollars at a rate of $1.00. Page 13

The Receiver is of the opinion that the stay of proceedings for the Companies under the CCAA

should be extended to June 30, 2008. For the reasons detailed in Section 7, the Receiver believes that granting this relief continues to be appropriate. The Receiver does not believe that continuing the stay of proceedings under the CCAA adds incremental cost to these proceedings.

Even with a termination of the CCAA proceedings, the receivership could continue, which itself has a broad stay of proceedings.

9. CONCLUSIONS AND RECOMMENDATIONS

Based on the foregoing, the Receiver respectfully recommends that this Honourable Court grant the relief detailed in Section i.i of this report.

All of which is respectfully submitted, -Th 'l I

RSM RICHTER INC. IN ITS CAPACITY AS RECEWER AND MANAGER, INTERIM RECEWER, AND CCAA MONITOR OF THE RAVELSTON CORPORATION LIMITED, RAVELSTON MANAGEMENT INC., ARGUS CORPORATION LIMITED, 509643 N.B. INC., 509644 N.B. INC., 509645 N.B. INC., 509646 N.B. INC. AND 509647 N.B. INC., AND NOT IN ITS PERSONAL CAPACITY