(FORTUNE Magazine) – It might seem strange to say that Conrad Black is in a pretty good spot. He's had to resign from his post as CEO of Hollinger International, he must forfeit $7.2 million in payments that the company says he pocketed without authorization, and he's facing an SEC inquiry. But the disgraced Canadian-born newspaper tycoon actually cut a sweet deal for himself when he agreed to step down.

As FORTUNE reported back in October (see "Black and Blue," on fortune.com), shareholders have accused Black, who remains Hollinger's chairman, of siphoning off about $220 million since 1995 from the public company. A special committee of the board agreed to investigate the allegations and discovered in mid-November that another $32 million had flowed without approval to Black, three of his key deputies, and a Toronto holding company he controls. But even after that revelation, Hollinger agreed to extend the terms of a controversial "management services" agreement it has with Ravelston Management Inc., a separate company that the former CEO presides over in Canada.

Black desperately needs cash to pay the interest on $120 million in debt borrowed by the holding company (called Hollinger Inc.). If the holding company defaults, Black could lose control of Hollinger because he has pledged Hollinger shares as collateral. That has loomed as a distinct possibility, as the management-services fee was scheduled to expire Dec. 31. If Black hadn't been able to come up with the money, he might have been liable for the entire amount of the loan. Hollinger cut him a huge break by extending the agreement until June 1, 2004. Robert Curry, a lawyer for Tweedy Browne, Hollinger's second-largest institutional investor, thinks it's "disheartening" that Hollinger is, in effect, servicing an outside company's debt. A Hollinger executive says that the company is not trying to keep Black afloat, and that the fee will be reduced after December by an unspecified amount.

Meanwhile, Hollinger has hired Lazard to explore a possible sale of the company, and analysts put the pricetag at around $2.2 billion. Black, who didn't respond to an interview request, controls 30% of the stock, meaning he could walk away with up to $660 million. That would be more than enough to retire his debt, make good on his promise to return $7.2 million in "unauthorized payments" (plus another $16.5 million that flowed to the holding company), and pay any SEC fines.

Plus, if Black can prevent a default at the holding company, he'll stay in control of enough stock to cast 72% of the ballots in any shareholder vote, wielding considerable influence over the sale process. Some investors fear he may use this power to cut a deal with a potential buyer that absolves him of having to repay any questionable payments. Surely that would further outrage shareholders. But there may be little they can do to stop him. Like Black, Hollinger's long-suffering investors stand to benefit hugely if the company is sold, so much so that they might be forced to ignore any unappetizing deals the chairman may cut on the side. As we said, things are bad for Black, but they could be a whole lot worse. --Devin Leonard