The majority owners of Freedom Newspapers Inc. would have benefited if they had given in to dissident shareholder Harry H. Hoiles' demand for a third of the chain's assets six years ago, according to a memorandum revealed in court Thursday.
The families' of Hoiles' sister and late brother would have benefited because their share of the divided assests, including the Orange County Register, would have been more profitable than their share of the entire operation, according to a memo introduced in the trial of Hoiles' lawsuit to dissolve the $1-billion media chain. The memo was written by a member of an appraisal firm hired by Freedom Newspapers in 1981 to establish a value for the company.
The Register, which provides 48% of the operating revenues of the Irvine-based media chain, is the chain's most valuable asset and was considered at the time to have the greatest potential for growth.
Hoiles, who had been publisher of the chain's second-largest paper, the Colorado Springs Gazette-Telegraph, for 30 years before returning to company's headquarters in 1975, had wanted that paper as part of any share of his assets. His proposals on splitting the assests in 1981 indicated that he was willing to give up interest in the Register in order to get the Colorado Springs paper and his share of the assests. In addition to those two papers, Freedom owns 27 smaller daily newspapers and five television stations.