10th Circuit judges hear Trib appeal

DENVER — A three-judge panel from the 10th Circuit Court of Appeals Wednesday explored possibilities that would allow former Salt Lake Tribune managers to regain ownership of the newspaper without also recovering their stock in an agency jointly owned by the Tribune and its competitor, the Deseret News.

The judges' questions during the 45-minute hearing focused primarily on the operation of Newspaper Agency Corp., which oversees the printing, advertising and circulation of both papers, and whether a 1997 option agreement could be reformed to somehow allow the transfer of all Tribune assets other than NAC stock to Salt Lake Tribune Publishing Co.

"We would be satisfied, but not delighted, to have all of the assets of the Tribune except the 50 shares of NAC stock," SLTPC attorney Seth Waxman said. "It would make us feel better if we had the stock, but it would have no consequence."

Under the hypothetical scenario, Waxman said things would work "exactly the same way" they have for the past five years, when SLTPC oversaw operations on behalf of Tribune owner AT&T.

AT&T sold the Tribune to MediaNews Group Inc. in December 2000 for $200 million.

MediaNews attorney Kevin Baine called the prospect of divorcing NAC stock from control rights in the agency and the Tribune "unthinkable."

"The ownership of NAC shares is what gives the parties control," he said.

The arrangement would force MediaNews to remain the legal owner of Kearns Tribune, the holding company that has control of the stock, but with absolutely no control over its assets.

Deseret News attorney David Jordan also argued the arrangement is forbidden under the terms of the two papers' joint operating agreement, which mandates how NAC is to be run.

After Jordan quoted three sections from the 50-year-old agreement, Judge Deanell Reece Tacha admitted the voting and stock rights did appear to be "inextricably linked."

In a May 31 ruling, U.S. District Judge Ted Stewart agreed that NAC stock cannot be separated from other Tribune assets. It is that decision that is now on appeal before the 10th Circuit.

While Stewart affirmed SLTPC's option to purchase the Tribune assets from Denver-based MediaNews after July 31, he also ruled that a provision in the joint operating agreement —one read by Jordan on Wednesday — forbids the transfer of NAC stock without the consent of the other party.