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SALT LAKE CITY (AP) -- A federal judge has upheld a $355 million appraisal of The Salt Lake Tribune, a ruling that could hamper efforts by former owners to reacquire the newspaper.
MediaNews bought the newspaper in January 2001 for $200 million.
However, a group of the newspaper's former managers, led by Salt Lake City insurance executive Philip G. McCarthey, have been trying to regain ownership ever since being ousted by the new owners.
The McCarthey group appealed the appraisal in U.S. District Court, but Judge Ted Stewart ruled Monday that the arbitration process that set the paper's price was valid.
Stewart said he would set a closing date eight days after his ruling is filed in writing later this week.
The Salt Lake Tribune Publishing Co., the group comprised primarily of McCarthey family members, said it would appeal.
Tribune Publishing lawyer Gary Bendinger said he also will file motions to postpone the closing date.
The McCartheys allege the appraisal by New Jersey-based Management Planning Inc. failed to meet industry standards and was tainted by fraud.
Stewart said there was no evidence of fraud, and said the appraisal guidelines had been approved by Tribune Publishing.
"Your client signed this agreement," he told Bendinger.
In August, Stewart threw out Tribune Publishing's lawsuit challenging the appraisal. But he allowed the former owners to dispute it under the higher standard of federal arbitration rules that allow an award to be thrown out if fraud, bias or other misconduct can be proved.
Dean Singleton, chief executive of MediaNews and Tribune publisher, sent a letter to Tribune Publishing making it clear that if the group tenders $355.5 million, MediaNews is prepared to transfer The Tribune assets.
The McCarthey family contends they have a contractual option to repurchase the paper five years after selling it to Telecommunications Inc. in 1997.
Family members say that when AT&T acquired TCI in 1999, it promised to honor the option, but AT&T instead sold it to MediaNews.
MediaNews and AT&T said the Deseret News Publishing Co. vetoed the family's purchase under its rights as a partner in a joint operating agreement.
Under the joint operating agreement the Deseret Morning News, owned by The Church of Jesus Christ of Latter-day Saints, and The Tribune are partners in Newspaper Agency Corp., which prints, distributes and sells advertising for both papers.
(Copyright 2003 by The Associated Press. All Rights Reserved.)