Appraisal of newspaper debated in federal court

Attorneys for the current and former owners of The Salt Lake Tribune battled it out in federal court Thursday, trying to persuade a new federal judge in their case to set the scope of how far the former owners can go in attempting to disprove the validity of an appraisal the former owners have called grossly inflated.

Patrick Carome, attorney for former owners Salt Lake Tribune Publishing and the McCarthey family, said the $355.5 million appraisal "stinks to high heaven" and accused New Jersey appraisal company Management Planning Inc. (MPI) of "gross misconduct." The McCartheys contend the value of the paper should be around $200 million and even less, alleging that the current owners, Media News Group Inc., which owns the Denver Post, has run the Tribune into the ground since it purchased the paper in 2001.

Last May the 10th Circuit Court of Appeals overruled U.S. District Judge Tena Campbell's decision to let the appraisal stand, directing the court to consider if the appraisal was done in a fair and legal manner. Since then, Campbell has recused herself from the case and U.S. District Judge Paul Cassell has taken over.

The question remains just how far the former Tribune owners get to go in attempting to disprove the appraisal.

In court Thursday, Carome asked Cassell for permission to depose as many as 60 individuals from MPI and Media News in its quest to find out if the appraised value of $355.5 million was accurate.

"They're on a fishing expedition," countered Media News attorney Kevin Baine, who said the McCartheys are trying to second-guess the appraisal when it is clear from the 10th Circuit ruling that the court is only to review if the appraisal was done in a legal manner. Baine said such discovery could "go on for years" as attorneys probe how Media News has managed the Tribune in circulation, advertising, revenue streams and other areas.

Cassell questioned why the McCartheys couldn't use corporate income statements to conduct its discovery. Carome responded that they aren't about to trust Media News' reports on the Tribune's performance and want to investigate for themselves.

Cassell said he might consider allowing the expanded discovery but warned he wasn't about to "chase rabbits through the woods" in allowing the McCartheys to begin questioning every business decision Media News has made in running the paper. Cassell ordered that Media News supply corporate income statements since 2001 and requested written motions from both sides on the scope of discovery.

For more than five years the McCarthey family has fought to regain control of the Tribune after losing it in a series of corporate mergers for tax purposes.