A federal judge in New York approved a $2.65 billion class-action settlement regarding the 2001 merger of Time Warner Inc. and America Online Inc., AP reported Friday.
U.S. District Judge Shirley Wohl Kram signed a ruling approv­ing the deal April 6. She had given the settlement tentative ap­proval in September 2005.
The settlement resulted from suits brought by shareholders who complained that AOL improperly accounted for dozens of advertising transactions, inflating reve­nue for 15 quarters between 1998 and 2002, AP said.
Time Warner is expected to pay the lion’s share of the settlement, with its audi­tor, Ernst & Young LLP, expected to pony up $100 million.
The lead plaintiff in the suit was the Minnesota State Board of Investment, which manages the investment of retirement-fund as­sets of the Minnesota State Retirement System, Teachers Retirement Association and the Public Employees Retirement Association. Ac­cording to AP, the Minnesota board, which has total assets of about $50 billion, lost an estimated $249 million and had the largest stake in the litigation.
This is the third settlement Time Warner has made since De­cember 2004. At that time, the company agreed to pay $210 mil­lion to the Department of Justice -- a $60 million fine and $150 million that would be set aside in a fund to settle any shareholder or securities litigation -- stemming from the improper accounting of the advertising accounts, and it paid $300 million to the Securi­ties and Exchange Commission.
Weekly digest of streaming and OTT industry news
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.