Appeals court ruling to gain ex-Trib managers new hearings

The legal battle over ownership of the Salt Lake Tribune will return once again to Utah's federal courthouse, after an appeals court on Tuesday gave former Tribune managers a second chance to dispute the appraised price of the paper.

While specifically noting it was not expressing an opinion on the merits of any claims, the three-judge panel from the 10th U.S. Circuit Court of Appeals sent the case back to Utah for additional hearings on the matter.

Salt Lake Tribune Publishing Co. (SLTPC) had challenged the final stage of a three-part appraisal process that set at $355.5 million the amount the former Tribune owners would have to pay to exercise a 1997 option to buy the newspaper back.

On Tuesday, the appeals court sided with SLTPC and overturned U.S. District Judge Ted Stewart's August 2003 decision that the final appraisal was an arbitration governed by the Federal Arbitration Act, which prevented him from overturning the award absent specific and egregious circumstances.

Stewart used that finding to support a dismissal of SLTPC's other claims related to the final appraisal, which valued the Tribune at $331 million. When averaged with an earlier appraised value of $380 million, the price tag for the Tribune was set at $355.5 million.

A firm hired by SLTPC set the Tribune's worth at $218 million. The $380 million figure came from MediaNews Group Inc.'s firm. Denver-based MediaNews purchased the newspaper in January 2001 from AT&T for $200 million.

SLTPC has maintained that the third appraisal, conducted by New Jersey-based Management Planning Inc., is at least $100 million too high and declined to meet the Oct. 10, 2003, closing deadline to exercise the option agreement.

SLTPC chairman Philip McCarthey said Tuesday he was pleased with the court's decision and reaffirmed his dedication to regaining ownership of the Salt Lake Tribune.

"We are delighted, we are energized," McCarthey said. "We always said we'd pay a fair price for the paper. Nowadays we have no idea what that is, but at least we know what it is not."

Tuesday's ruling does not automatically grant SLTPC the right to a new appraisal, however. It simply sends the matter back to Stewart's Salt Lake courtroom for a second evaluation of the appraisal, absent the higher legal standard afforded to arbitrations.

Even without that immunity, attorneys for MediaNews maintain the $380 million valuation can withstand additional scrutiny.

Arguing the case before the 10th Circuit in September, MediaNews attorney Kevin Baine said that an appraisal cannot be vacated absent a clear finding of fraud, manifest error or corruption — things that aren't present in this case, he said.

MediaNews CEO William Dean Singleton was unavailable for comment Tuesday evening.