A
$2.5 billion settlement of class-action securities
lawsuits against Time Warner was hailed as one
of the biggest in history when it was announced
last year, but some who decided to opt out of the
deal are faring much better than those who took
it.
An
unexpectedly large settlement for one of the holdouts,
the state of Alaska, is raising questions about the
nation-wide pact and whether Time Warner's reserves
are sufficient to absorb all of its liability to
those who bailed out.
Time
Warner agreed this week to pay Alaska $50 million
to compensate it for investment losses alleged to
total about $60 million, an attorney who represented
the state, Richard Heimann, said. That result, amounting
to about 83 cents a dollar allegedly lost, appears
to be far superior to the payout in the nationwide
settlement, which has not been calculated officially
but is likely to be a few cents on the dollar, according
to lawyers involved in the litigation.
"Our
settlement is far and away more than what we would
have received - 50 times more than what we would
have received if we had remained in the class," Mr.
Heimann told The New York Sun. He noted that the
case was filed in state court in Alaska and took
advantage of a state "blue sky" law that
prohibits fraud in securities deals. "The Alaska
statute was particularly favorable," the attorney
said.
Mr.
Heimann said he believed the size of the settlement
may have reflected a concern on Time Warner's part
that the Alaska litigation could have had a trickle-down
effect on dozens of similar cases pending against
the company. "Had we continued to litigate,
we likely would have obtained rulings by the court
in Alaska that could have had some impact on those
cases," the San Francisco-based lawyer said. |
