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Harry Hoiles’ Future Uncertain After Judge Throws Out Suit

June 3, 1987

SANTA ANA, Calif. (AP) _ Harry Hoiles’ future in Freedom Newspapers Inc. is uncertain after a judge dismissed his bid to break up the family-owned newspaper group and give him one-third of the assets, officials said.

Hoiles and family members sat in silence Tuesday as Orange County Superior Court Judge Leonard Goldstein ruled they had failed to show that their relatives had conspired to squeeze Hoiles out of the privately owned corporation.

Afterward, they left the courtroom without talking to reporters.

The summary judgment in favor of the defendants was issued after 30 days of trial during which Hoiles’ lawyers submitted hundreds of documents and called eight witnesses.

The defendants never presented their case in the non-jury trial, which cost a total of about $10 million, attorneys said.

″I’m delighted, of course, absolutely delighted,″ said Robert Currie, attorney for Freedom Newspapers.

Hoiles’ attorney, Vernon W. Hunt, said he was unsure whether the ruling would be appealed.

Freedom is the nation’s 14th largest media group by circulation. It owns or operates 29 newspapers, including The Orange County Register, along with five television stations and other properties.

Currie and majority shareholders attorney Leonard Hampel said they hoped the judge’s decision will end the dispute.

″There’s no reason this should have any lasting effects on the chain,″ Hampel said. ″The corporation has been very successful and should continue to be very successful. Harry is still very much a part of the paper.″

However, Hoiles has resigned all his corporate positions except a directorship and he works in Tustin, rather than Freedom’s Irvine headquarters.

His son, Timothy Hoiles, and son-in-law, Ricky Oncken, are publishers of Freedom papers, but Oncken said they have become increasingly isolated from corporate decision-making.

″Right now, we do not have much influence,″ Oncken said. ″They just tell us what they want us to know. There is a feeling of being shut out and it has been that way for some time. I don’t expect that to change.″

Richard Quan, an attorney for Harry Hoiles, said his client feels isolated on the board and ″he definitely wants to withdraw.″

Currie said the suit stemmed from Hoiles’ bitterness over not succeeding his brother, Clarence, as head of Freedom Newspapers after Clarence Hoiles’ death in 1981.

Freedom’s lawyers argued that corporate decisions, such as those restricting the sale of Freedom stock, were justified because Harry Hoiles had threatened to sell his stock to an outside buyer.

Among those approached, they said, was the Times Mirror Co., owner of a Register competitor, the Los Angeles Times. Freedom’s lawyers likened the overture to an act of treason.

Hoiles’ sister, Mary Jane Hoiles Hardie, and Clarence Hoiles’ family offered in 1982 to buy out Harry Hoiles’ stake in the company for $74 million. But Harry Hoiles refused, arguing his share was worth more than $300 million.

He sought a court order to enforce his position, but Goldstein said Tuesday, ″The court concludes there has been no pervasive abuse of authority or persistent unfairness....

″Majority rule was and is the prescribed standard for conducting business,″ he said, and revising company leadership was the majority’s right, ″not the product of a conspiracy, abuse of power or wrong, per se.″

The judge made no ruling on whether the $74 million was a fair amount to offer for Harry Hoiles’ stake in the communications group.

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