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Business planning

Bertelsmann Ordered to Pay €234.3m in AOL Joint Venture Dispute

Strategic Insights

— 1 min read

Bertelsmann, the German media giant, has been ordered to pay over €234.3m to two former executives who claim they were promised a stake in an online joint venture with America Online. The ruling, made by a California judge, upholds a jury's verdict from last year that Bertelsmann must pay the executives, Jan Henric Buettner and Andreas von Blottnitz, a share of the $6.75bn AOL paid Bertelsmann for a 50% stake in the companies' AOL Europe joint venture. The dispute centered on the jury's interpretation of the executives' claim that they had been promised a "participation" in the deal by former Bertelsmann chief executive Thomas Middelhoff.

Key Takeaways:

  • Bertelsmann must pay €234.3m to two former executives, Jan Henric Buettner and Andreas von Blottnitz, including interest of 4%.
  • The company will now ask the judge to overrule the jury's verdict or grant another trial if their attempts fail, they will appeal to a panel of judges and potentially the California Supreme Court.
  • The dispute centered on the jury's interpretation of the executives' claim that they had been promised a "participation" in the deal by Thomas Middelhoff.
  • The judge dismissed the award against Thomas Middelhoff, the former Bertelsmann chief executive, citing it as speculative.
  • The judge left open the possibility that Bertelsmann could attempt to reclaim some of the settlement against its former CEO.
  • Bertelsmann will accrue interest of 10% per year on the settlement amount from now.

Statistics:

  • €234.3m: The total amount Bertelsmann owes the two former executives.
  • 4%: The initial interest rate on the settlement before it was increased to 10% per year.
  • 10%: The new interest rate Bertelsmann will accrue on the settlement amount from now.
  • $6.75bn: The amount AOL paid Bertelsmann for a 50% stake in the companies' AOL Europe joint venture.
  • 2001: The year the two executives filed a lawsuit against Bertelsmann.
  • 4 years: The duration of the legal battle between Bertelsmann and the two executives.

Sources:

  • Bloomberg
  • The Wall Street Journal (online edition)
  • Reuters

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