From Deseret News archives:
Judge upholds $331 million Tribune appraisal
In her ruling, U.S. District Judge Tena Campbell struck down Salt Lake Tribune Publishing Co.'s claim that an appraisal commissioned between Tribune Publishing and the paper's current owners, MediaNews Group Inc., was flawed and over-inflated. The two entities have been locked in a legal battle that Campbell called a "firestorm" over Tribune Publishing's exercise of a 1997 purchase option agreement, which the paper's former owners say entitled them to try and buy back the paper.
The agreement called for both sides to provide appraisals to determine the fair market value of the paper. Both appraisals came back divergently different. The agreement also called for a third appraisal agreed upon by both sides, which would be binding and averaged with the two prior values.
A New Jersey-based company, Management Planning Inc., was hired for the third appraisal and came to a value of $331 million. When averaged, the appraised value of the paper came to $355.5 million.
Tribune Publishing officials refused to accept the appraisal, calling it faulty, and took the matter to court. They point out MediaNews purchased the paper for $200 million.
Last December, the 10th Circuit Court of Appeals ruled that because a New Jersey company was hired for the job, New Jersey law must apply.
In her ruling, Campbell noted that under New Jersey law a third-party appraisal in which both parties agreed to be "final, binding and conclusive" cannot be vacated unless there is evidence of "fraud, corruption or similar wrongdoing." Tribune Publishing officials failed to show any evidence of fraud or wrongdoing, Campbell stated.
Neither Salt Lake Tribune Publishing chairman Philip McCarthey nor MediaNews CEO William Dean Singleton could be reached for comment Monday evening.
Campbell also ruled that several other Tribune Publishing motions, including a motion to find MPI responsible for breach of contract and fiduciary duty, were not ripe for review.
In order to find they suffered harm due to MPI's appraisal, Campbell wrote that Tribune Publishing must now prove it has the ability to purchase the Salt Lake Tribune at what Tribune Publishing considers an overinflated price.
Sale of the Salt Lake Tribune - Read Deseret News' archive stories and see related links about the sale of the Tribune.
E-mail: gfattah@desnews.com
