Hoping to finally lay to rest the specter of its disastrous merger with AOL in 2001, Time Warner is setting aside an additional $145 million to settle the last of the securities-fraud claims related
to the deal. This brings the total amount spent on shareholder lawsuits to about $3.75 billion.
This is the third reserve created by the media giant stemming from the merger, the
company said, after exhausting a $3 billion reserve created in 2005 and another $615 million set aside late last year. In addition, the company had to pay the federal government $510 million and
settle a separate Justice Department lawsuit.
Shareholders have sued the company for misleading them through inflated ad revenues at AOL, which had boosted its stock's share price
prior to the merger. A class-action suit was settled in 2005 for about $2.5 billion, but many investors opted out of that settlement, forcing Time Warner to cut separate deals for several plaintiffs,
which resulted in the extra $1.25 billion spent on settlements.
Read the whole story at The Wall Street Journal »