A federal appeals court is letting stand its decision that the former owners of The Salt Lake Tribune can contest a final appraisal that set the price for the newspaper at $355.5 million. For more than five years, the McCarthey family has been in litigation in an attempt to buy back Utah’s largest newspaper.
The 10th U.S. Circuit Court of Appeals on Wednesday denied a petition for rehearing from Denver-based MediaNews Group Inc., which owns the Tribune, and Management Planning Inc., a Princeton, N.J., business valuation firm that helped establish the Tribune’s price.
In May, a panel of 10th Circuit judges told U.S. District Judge Tena Campbell in Salt Lake City she could consider whether the $355.5 million price tag was set in a fair and legal manner, rejecting her ruling she had no power to intervene. It’s unclear what Campbell might do, but last week she agreed to reopen the McCartheys’ original case contesting ownership of the paper.
“That means we’re full steam ahead on both cases,” Philip G. McCarthey, chairman of a management group that once controlled the Tribune, said Thursday.
In addition to the appraisal challenge, the McCarthey group is trying to wrest control of the paper from William Dean Singleton, MediaNews chief executive and vice chairman, who outmaneuvered the former managers when he bought the Tribune for $200 million in 2001 out of a series of corporate mergers.
Singleton later offered the paper for sale at $355.5 million, but the McCartheys refused, calling the figure inflated. Now they contend the value of the paper — and its readership — has declined.
Singleton didn’t immediately return a call seeking comment.
In 1997, the McCarthey family reluctantly agreed to part with the Tribune after other shareholders persuaded them to merge the newspaper with TCI, John Malone’s cable-television giant, in a stock swap. AT&T Corp. acquired TCI in 1999 and sold the paper to MediaNews two years later.
The mergers solved an estate tax problem for the Tribune’s biggest shareholders, who watched an early investment n TCI that over four decades multiplied 10,000-fold in value to nearly $500 million. That could have left the families of the bigger shareholders with huge tax bills upon their deaths, possibly forcing a sale of the paper.
McCarthey family members contend AT&T reneged on a promise to honor their repurchase option. AT&T and MediaNews counter that the McCartheys’ repurchase of the Tribune was vetoed by the Deseret Morning News, the Tribune’s joint operating agreement partner and rival newspaper.
The Deseret Morning News is owned by The Church of Jesus Christ of Latter-day Saints.