Judge to rule soon on validity of Trib appraisal

A federal judge said Thursday she will soon rule on whether a contested appraisal of the Salt Lake Tribune is valid or not, moving the former Tribune's owners and its current owners closer to trial.

In a motion hearing before U.S. District Judge Tena Campbell, attorneys for Salt Lake Tribune Publishing Co. and Denver-based MediaNews Group Inc. made final arguments over an appraisal that the former Tribune owners say was botched and resulted in setting a value on the Utah paper that was severely overpriced. MediaNews says the appraisal is valid.

The 10th Circuit Court of Appeals ruled last December that because the appraisal was done by a New Jersey-based appraisal company, New Jersey law must apply to determine if the appraisal can be used or not.

Kevin Baine, attorney for MediaNews, argued that after two appraisals done by each party, Tribune Publishing agreed to a joint and final third appraisal that would be binding. That final valuation, conducted by New Jersey-based Management Planning, set the Tribune's worth 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.

Salt Lake Tribune Publishing Co., which sold the newspaper in 1997 to a company that was later acquired by AT&T, wants to exercise an option agreement it made at the time of the sale to allow it to buy back the newspaper from MediaNews, which purchased the paper from AT&T in January 2001.

In addition, Baine argued that under New Jersey law, Tribune Publishing must show there was evidence of fraud or that somehow the appraisal was illegal in order to find it invalid.

Tribune Publishing attorney Patrick Carome countered that while the newspaper was sold to MediaNews for $200 million, the third appraisal increased the value by $131 million. Under the definitions of fair market value in the option agreement, Carome said the appraisal did not follow those definitions and thus violated the terms of the contract.

Campbell noted that she had trouble finding relevant case law in New Jersey on the subject of overturning appraisals based on the merits of a contract between two private parties.

The judge said she would issue a ruling in writing at a later date.

MediaNews also has a suit pending against individual members of the family who formerly owned the paper.

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E-mail: gfattah@desnews.com