Ex-Trib owners argue appraisal case

DENVER — Dozens of familiar faces were in court here Monday for what has become a common occurrence over the past four years — a hearing in the lawsuit over ownership of the Salt Lake Tribune.

But one face in particular piqued the interest of key players in the ongoing litigation, as the federal judges whose decisions are the subjects of appellate court hearings don't generally attend hearings once the cases leave their courtrooms.

Ultimately, U.S. District Judge Ted Stewart did not attend the arguments before a three-judge panel from the 10th U.S. Circuit Court of Appeals. Presumably in town on other business, he just happened past the Denver courtroom as parties began arriving for the afternoon hearing.

Stewart's law clerk, however, did sit in on the approximately 45-minute hearing as attorneys for former Tribune managers tried to convince the court that the Utah judge erred last fall when he upheld a $355.5 million purchase price for the newspaper.

Salt Lake Tribune Publishing Co. (SLTPC) has asked the appeals court to overturn Stewart's ruling that the three-part appraisal process that resulted in the hefty price tag was an arbitration, which, under the terms of the Federal Arbitration Act, can be vacated only under a very strict set of circumstances.

SLTPC attorney Seth Waxman argued Monday that the process, as outlined in a 1997 option agreement, was never meant to be an arbitration. And if it is not, he said, SLTPC should be allowed to challenge the third appraisal, conducted by New Jersey-based Management Planning Inc. That $331 million valuation, when averaged with the next closest figure of $380 million, resulted in the $355.5 million exercise price.

"Our position is that this appraisal does not follow what the (professional) standards require as fair market value," Waxman said.

Management Planning instead used an "investment value" approach in reaching its final value, he said, which is not allowed under the option agreement.

SLTPC declined to tender the exercise price when the option agreement ripened on Oct. 10, 2003. The former managers are now arguing they are entitled to a new set of appraisals and another opportunity to purchase the Tribune from its new owner, MediaNews Group Inc.

Though many of SLTPC's arguments were met with favorable responses Monday, Judge Carlos Lucero scoffed when Waxman suggested his clients should have an opportunity to start anew.

"With all due respect, it seems to me that you're just trying to renegotiate this contract," Lucero said.

Denver-based MediaNews purchased the newspaper in January 2001 for $200 million — a difference that, one judge said Monday, was "an incredible differential."