A director of Freedom Communications Inc. and a member of the media company’s founding family said she is “devastated to be part of a generation that put the company into Chapter 11.”
Robin Hardie, one of four family members on Irvine-based Freedom’s board and a former executive at several of the company’s businesses, made the comment in an interview with the Gazette, a Colorado Springs, Colo., newspaper, Freedom’s third largest after the Orange County Register and the East Valley Tribune in the Phoenix area.
She said she and other relatives and extended family of deceased founder Raymond Cyrus “R.C.” Hoiles are set to be rendered “token shareholders” after Freedom’s bankruptcy reorganization.
On Tuesday, Freedom filed for bankruptcy reorganization and is set to pursue a plan that will turn over nearly all of the company to a group of 27 lenders led by JPMorgan Chase & Co.
The family and two private equity investors are expected to see their stakes slashed to a combined 2% with an option to buy back 10%
The plan calls for cutting Freedom’s debt from $771 million to $325 million.
Hardie said a 2004 buyout by private equity firms Blackstone Group LP and Providence Equity Partners LLC “still was the right thing to do,” despite leaving Freedom with a crippling debt.
The deal allowed some Hoiles family members to cash out their stakes and kept other relatives in charge with 52% of the company.
“The (2004 transaction) wasn’t about money,” she told the Gazette. “We were trying to keep the vision and values of the company alive and keep the company and its culture alive for the thousands of associates who worked long and hard for the company.”
read the full Gazette interview.
For more on Freedom’s bankruptcy, see the Sept. 7 edition of the Business Journal.