Salt Lake City – A judge on Monday dismissed a lawsuit filed by The Salt Lake Tribune’s former owners, who have been trying for five years to regain ownership of Utah’s largest newspaper.
U.S. District Judge Tena Campbell granted motions by Denver-based ap Inc. and others to dismiss the case.
“We are obviously pleased,” said Jody Lodovic, president of MediaNews, the nation’s seventh-largest newspaper company, which owns The Denver Post. “This is a small piece to the overall litigation, but it’s nice to get it out of the way.”
MediaNews bought the Tribune for $200 million in 2001 and shut out a bid by the McCarthey family, which traces part-ownership of the paper back nearly a century. The family argued it had an option to buy back the paper five years after other shareholders persuaded the family to merge the Tribune with John Malone’s Colorado based cable-TV giant Tele-Communications Inc. in a 1997 stock swap.
“They’re extremely disappointed and haven’t determined the next step in this case,” family lawyer Barney Gesas said.
In October, Campbell upheld a $355.5 million appraisal for the Tribune – a figure the McCartheys refused to pay, contending it was inflated and would be a bad investment. That ruling is on appeal to the 10th U.S. Circuit Court of Appeals, which has scheduled a May 11 hearing for arguments.
Lodovic said he is “very confident” the 10th U.S. Circuit Court of Appeals will rule in favor of MediaNews.
In Monday’s ruling, Campbell said the handshake deal claimed by the McCarthey family was nothing more than assurances made by Malone that he would try to ensure that the family got the paper back. Ultimately, Malone wasn’t able to influence the decision.
Instead, his company was taken over by AT&T Corp., a development that wasn’t envisioned with the McCarthey’s buyback option. Family members contend AT&T reneged after promising to honor the repurchase option, selling the Tribune to MediaNews instead.
Campbell threw out an unjust-enrichment claim by the McCartheys that accused MediaNews of snapping up the paper for a bargain and making it too expensive for the family to repurchase. She also threw out claims of business interference against AT&T and the Tribune’s joint operating partner, the Deseret Morning News. The two papers share advertising and business operations.
Denver Post staff writer Will Shanley contributed to this report.
