Ontario court OKs transfer of National Post

Canwest threatened to pull plug on the publication

TORONTO -- An Ontario court has approved the transfer of the National Post newspaper to a new entity after debt-laden Canwest Global Communications Corp. threatened to pull the plug on the loss-making national publication.

Following a hearing Friday afternoon, Justice Sarah Pepall of the Ontario Superior Court approved the transfer of the National Post to Canwest Limited Partnership, a newspaper division not included in Canwest Global's court-directed restructuring unveiled earlier this month.

Earlier in the day, Lyndon Barnes, a Canwest Global lawyer, told the Ontario court that U.S. bondholders who now control the debt-laden broadcaster did not want to fund the loss-making National Post newspaper beyond Friday.

The conservative-leaning National Post newspaper, launched in 1998 by then Canadian newspaper baron Conrad Black, has never made money.

Black is currently serving a six and a half year jail term in the U.S. after being convicted of defrauding shareholders of Hollinger International.

The transfer of the National Post comes as Canwest Global attempts to shed costly assets, recapitalize the company and emerge from creditor protection by January.