From Deseret News archives:
Was family promised a Tribune buyback?
Judge to decide if an oral agreement was made and pertinent
During a hearing Wednesday, attorneys for the McCarthey family said they were promised by fellow board members of Kearns-Tribune and former publisher Jack Gallivan that if they sold the paper under a corporate restructuring, the family would have the right to get the paper back. At the time, in 1995, the McCarthey family owned about 45 percent of Kearns-Tribune Corp.
Family attorney Barney Gesas said this "clinking of the glasses," as Jack Gallivan called it, was separate and apart from a purchase agreement Kearns-Tribune entered into with cable television company TCI, which was subsequently purchased by AT&T and then the paper was sold to MediaNews Group Inc. in 2001.
Gesas said the McCarthy family was promised that despite the sale to TCI, the family would maintain control of the paper and within five years would have the option to buy the paper back with its assets "not to be materially changed."
U.S. District Judge Tena Campbell said she struggled to find any evidence to show that such an oral contract existed and questioned if such an oral agreement could trump a written agreement.
An attorney for the Tribune and Media News pointed out that the McCarthey family approved the written option agreement as board members of Kearns-Tribune and that the agreement gave a new entity, Tribune Publishing Corp., the right to buy the paper back, not the McCarthey family itself.
Tribune attorneys also pointed out that the issue of an oral agreement was also raised once appraisals of the Tribune came in and set a $331 million appraised value.
Gesas pointed out that the McCarthey family was strong-armed by the rest of the board into selling the paper in a corporate restructuring plan to avoid a tax liability and that the family was strongly opposed to the sale.
After hearing arguments on the oral "family agreement" Campbell said she still struggled to find any evidence of such a promise made.
The McCarthey family has also brought up claims formerly brought under Kearns- Tribune, accusing Deseret News Publishing of interfering in their attempts to buy the paper back. The old claims of interfering with a contract, civil conspiracy and unjust enrichment have been dismissed by a federal judge.
David Jordan, attorney for Deseret News Publishing, said that the McCarthey family claims have no better chance of holding up now because they lack any credible evidence that his client took part in such conduct. Deseret News Publishing did contemplate for a brief time a purchase of Kearns-Tribune back in 1999, but it was a failed endeavor, Jordan said.
Written rulings are expected to be issued at a later date.
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
