Two Trials Set in Battle Over Utah Paper

By: A federal judge said Thursday he would schedule two trials in the ownership battle for Utah's largest newspaper.

In the first trial, set to start Sept. 4, the former owners of The Salt Lake Tribune will seek to overturn a key appraisal that established $355.5 million as the price they would have to pay to get the newspaper back _ even though they recently disclosed that recovering the paper isn't their primary objective.

The McCarthey family, former major Tribune shareholders, is seeking damages against the appraisal firm, New Jersey-based Management Planning Inc.

"We're very pleased that we're finally going to have MPI defend their work," said Philip G. McCarthey, a Salt Lake City insurance executive, whose family contends $355.5 million was an inflated price for the Tribune.

MPI attorney Robert S. Clark said the lawsuit "threatens the very existence" of the tiny appraisal firm. Clark said early in the six-year-old case, which has taken several detours on appeal, that MPI couldn't afford the cost of major litigation.

For that reason, U.S. District Judge Paul Cassell said Thursday he was trying to "get these things wrapped up as soon as possible so these clients can spend money on other things beside lawyers." Cassell is the third district judge to handle the convoluted case; others quit in frustration or after being overturned.

The McCarthey family went along with other shareholders who wanted to sell the Tribune to minimize their individual estate taxes. The paper was sold in 1997 to John Malone's cable-television giant, TCI, in a stock swap. The Tribune had made an early investment in TCI that ballooned over the years.

The family worked out an agreement to buy back the newspaper five years later. But AT&T Corp. acquired TCI in 1999 and two years later decided to sell the paper to Denver-based MediaNews Group Inc. instead.

MediaNews, which bought the Tribune for $200 million, offered it to the McCartheys for $355.5 million but they refused to pay that amount.

"I have no problem going to trial. I think the appraisal is rock solid," W. Dean Singleton, MediaNews vice chairman and chief executive, said Thursday during a break in the six-hour hearing. "There's no way in the world it will be overturned."

Cassell and lawyers tentatively agreed to start the second trial on Feb 4.

In that trial, the McCarthey family will try to get a verdict that MediaNews and its Salt Lake City joint operating partner, the Deseret Morning News, interfered with the family's contract rights to buy back the newspaper. The family will seek business damages against both defendants.

The Deseret Morning News used its rights under the joint operating agreement to veto a sale of the Tribune back to the McCarthey family, with whom it had feuded for years.

Lawyers for the Deseret Morning News, which is owned by The Church of Jesus Christ of Latter-day Saints, said Thursday there were few surviving claims against Salt Lake City's junior daily newspaper and that it had counterclaims against the McCarthey family for mismanaging their joint business operation. The once-afternoon paper accused managers for the McCarthey family of thwarting its move to a morning paper, which occurred in 2003 with Singleton's cooperation.

Lawyers for the McCartheys recently disclosed they were dropping an effort to recover the Tribune because MediaNews had "scrambled" the newspaper's assets by, among other things, having a separate company build a new printing press, abandoning the Tribune's office tower for leased quarters and changing terms of the joint business agreement.

Instead, the family says it will ask for a few Tribune assets that haven't changed _ the archive of old stories and rights to the Tribune's name for a new paper they are talking about starting to compete against the established one.

The McCartheys are seeking jury trials. MediaNews and other defendants are seeking a trial by judge. Cassell said he would sort out that dispute before the first trial starts.

Philip McCarthey is a great-grandson of Sen. Thomas Kearns, a millionaire silver miner who bought the Tribune in 1901. McCarthey was chairman of a management group that controlled the Tribune until July 2002, when it was forced to give way to MediaNews.

Singleton, who became chairman of The Associated Press board of directors in May, founded privately owned MediaNews in 1983. It ranks as the fourth-largest newspaper company in the United States. Together with affiliated companies, MediaNews publishes 57 daily newspapers, including The Denver Post and The Detroit News, and about 120 non-daily publications in 13 states. It also owns a CBS affiliate in Anchorage, Alaska, and four radio stations in Texas.


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