ATLANTA (CN) – The 11th Circuit has held that the News-Journal Corp. should pay the owner of the Atlanta-Journal Constitution and 16 other daily newspapers $129.2 million for its 47.5 percent stake in the company.
Cox Enterprises, an Atlanta-based media partner, sued the News-Journal in May 2004, claiming its executives wasted money on pet projects – including a $29 million “upscale performing arts center” – without telling Cox officials. The News-Journal allegedly forked out $13 million for the right to name the center.
Facing allegations of fraud, waste and mismanagement, the News-Journal opted to buy Cox’s shares at “fair value.”
But the parties were unable to agree on a fair price, so the district court held a bench trial to determine how much Cox’s shares were worth.
Experts on each side argued for starkly contrasting fair-market values: Cox’s expert claimed the 47.5 percent share came to $145.35 million, while the defendant’s expert said it came to only $29.41 million.
The circuit affirmed an assessment closer to the estimate given by Cox’s expert. As partner in a firm specializing in evaluating newspapers, he was “plainly qualified” to testify about the fair value of Cox’s shares, the court ruled. The News-Journal’s expert was deemed qualified, but “appreciably less so.” See ruling.