Publisher’s Letter Calls Hoiles a ‘Spoiled Child’

In an angry letter that surfaced in court documents filed this week, the publisher of the Orange County Register called estranged Freedom Newspapers shareholder Harry H. Hoiles “a spoiled child” who is “throwing a tantrum because he can’t have his way.”

The letter, part of court documents Hoiles filed Wednesday, reveals just how deep the family split has been at Freedom Newspapers Inc., owner of the Register, 28 other daily papers and four television stations.

Hoiles, one of three children of Freedom Newspapers founder R. C. Hoiles, is asking the Orange County Superior Court to stop the families of his sister and his late brother, each holding about a third of the stock, from voting on or implementing anti-takeover measures he claims will lower his own family’s one-third interest in the corporation.

Hoiles has been trying to force Freedom to give his family either a third of the company’s assets or the market value of those assets. His 4-year-old lawsuit to dissolve Freedom Newspapers and split the assets proportionately among the three family groups is tentatively scheduled for trial April 7.

Hoiles’ Claims

A hearing has been set for Feb. 6 on Hoiles’ bid to halt shareholders from voting at the Feb. 10 annual meeting on the anti-takeover measures, which include issuance of up to 5 million new shares of corporate stock.

In his dissolution suit, Hoiles has claimed that the Register has strayed from the strict libertarian philosophy of his late father. He claims also that management of Freedom Newspapers by a troika with no one individual in charge violates his father’s philosophical tenets and that the rest of the family reneged on a promise to make him chief executive upon the death of his older brother, Clarence.

Before he died on Dec. 31, 1981, Clarence Hoiles had proposed splitting the company’s assets into thirds and letting each of the families take a proportionate share, and he asked his family members for their thoughts.

In a lengthy, handwritten letter, son-in-law R. David Threshie, publisher of the Register, argued that the Harry Hoiles family should receive a discounted price--only 27% of what then was an estimated value of $320-per-share--because the family owned a minority interest.

‘Can’t Have His Way’

Threshie also argued in his letter that “we think that, first, the situation has nothing to do with libertarianism, R.C., management by committee, unkept promises or any of the other rationalizations Harry has used. It’s simply a case of a spoiled child throwing a tantrum because he can’t have his way.”

Threshie would not comment Friday on the letter.

In his latest court action, Hoiles claims that proposals to create a preferred class of stock with 2.5 million shares and to authorize 2.5 million non-voting common shares of Freedom stock would dilute his family’s interest in the company. Because the company’s most recent proxy statement says nothing about how much the shares will cost or to whom they can be sold, Hoiles claims, the majority directors could bar him and his family from purchasing any of the stock.

According to the proxy statement, Freedom Newspapers wants the stock held in reserve for future financing considerations and for thwarting any takeover attempts.