Ex-Trib managers sued by law firm

A Chicago-based law firm that crafted the contracts at the heart of the contentious dispute over ownership of the Salt Lake Tribune has sued the newspaper's former managers over alleged unpaid bills.

The firm, Winston & Strawn, filed the federal lawsuit against Salt Lake Tribune Publishing Co. (SLTPC) late last week, alleging the management company owes the firm just over $300,000 in legal fees.

The outstanding balance, according to the suit, reflects a portion of the fees and costs incurred during Winston & Strawn's representation of SLTPC during the early days of the ownership dispute.

In December 2000, SLTPC filed a lawsuit to block AT&T's upcoming sale of the newspaper to MediaNews Group Inc. and to enforce a 1997 option agreement, designed by Winston & Strawn, giving SLTPC an opportunity to purchase the Tribune after July 2002.

Winston & Strawn left the case nearly a year later, when U.S. District Judge Ted Stewart disqualified its lead attorney, as well as the entire Salt Lake City law firm of Jones, Waldo, Holbrook & McDonough, after determining the two firms had previously represented another party to the case.

SLTPC chairman Philip McCarthey was unaware of the lawsuit when contacted Tuesday, but said he knew a dispute existed over the alleged $336,477 balance. McCarthey said he asked Winston & Strawn for a full accounting of the claimed unpaid fees, but never received anything from the firm.

"I've always long said I'd pay a fair price for services, and certainly for assets, but I don't believe in overpaying for things," he said. "And I certainly don't believe in paying for things when I don't know what it is."

The original lawsuit continues to work its way through the courts, having recently been sent back to Utah's U.S. District Court by a federal appeals court. Earlier this month, the 10th U.S. Circuit Court of Appeals gave SLTPC a second chance to dispute the appraised price of the paper after overturning Stewart's earlier decision that the appraisal process was an arbitration that could only be reviewed under very limited circumstances.

The three-part appraisal process set a $355.5 million price tag for the Tribune, an amount SLTPC argues is at least $100 million too high.

MediaNews petitioned the appeals court to reconsider the issue, a request that was denied last week.

Attorneys for MediaNews have long argued that SLTPC — largely members of the McCarthey family — lacks the funds to buy back the newspaper, whatever the final price. McCarthey has repeatedly denied the allegation, and made clear Tuesday that the Winston & Strawn lawsuit should not be viewed as evidence that the family is in any sort of financial trouble.

"This is more of an indication of how we deal with threats," he said.

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E-mail: awelling@desnews.com