A U.S. federal court judge has thrown out Hollinger International's $1.25 billion US racketeering lawsuit against Conrad Black and other former executives of the company.

The lawsuit, which was filed in May, alleged that Black and his associates improperly diverted $380 million US from Hollinger International to companies they controlled.

Hollinger International was seeking triple damages. The plaintiffs were also claiming interest.

Conrad Black wins a round
Conrad Black wins a round

The lawsuit was filed under the provisions of a federal U.S. anti-racketeering law known as RICO (Racketeer Influenced and Corrupt Organizations Act).

But U.S. District Judge Blanche Manning threw out the racketeering allegations.

Saying the balance of the case fell outside her jurisdiction, she then granted the defendants' motion to dismiss the whole lawsuit.

Hollinger International said it was considering whether to appeal but said it wasn't about to let its case die.

"The special committee will pursue these claims aggressively and seek restitution for funds diverted by the defendants from the company," Hollinger International CEO Gordon Paris said in a release.

Hollinger International called the suit's dismissal "technical" and said the dismissal was not related to the merits of the claim.

Defendants claim victory

Hollinger Inc., the Black-controlled holding company, welcomed the dismissal.

"We continue to believe that all of the claims against Hollinger Inc. are without merit and, if any of them are re-filed, we will defend against them vigorously," said Hollinger Inc. co-chief operating officer Peter White.

Black associate David Radler, who was named in the Hollinger International lawsuit, issued a statement through spokesman Josh Pekarksy.

"We have said from the beginning that we felt the RICO claims were overreaching and unsubstantiated by fact," Pekarsky said. "We will continue to pursue this matter through the courts, where we expect Mr. Radler will be fully vindicated."

Black and Hollinger Intl locked in legal battles

Black and Hollinger International have launched several lawsuits against each other as the newspaper publishing company accused its former CEO of misappropriating money he wasn't entitled to.

Black has filed two lawsuits against Hollinger International and a special committee of its board that issued a highly critical report on his conduct.

In August, the special committee accused Black and some associates of running a "corporate kleptocracy" that resulted in the company being "looted" of almost $400 million US.

Black sued Hollinger International for $850 million earlier this year and served notice last week that he would sue the Hollinger special committee and others for $1.1 billion more.

Black has always denied any wrongdoing and said any non-compete payments he received were authorized by Hollinger's board.