Bertelsmann hit with huge cost
Germany’s Bertelsmann – which has just merged its music business with Sony Corps’ – owes two former executives at least $244.3 million for their part in a joint venture with America Online, a California jury has ruled.
Bertelsmann plans to appeal he decision which, "comes as Bertelsmann struggled to overcome both weakness in its operations and management turmoil," says a UPI report here, going on:
"The case stems from a joint venture Bertelsmann entered with AOL in 1995 to establish AOL Europe. The former Bertelsmann executives, Jan Henric Buettner and Andreas von Blottnitz, both Germans, helped set up the deal and claimed Thomas Middelhoff, then a senior Bertelsmann executive, promised them an equity stake in the company, now a unit of Time Warner Inc. The jury, which heard the case in superior court in Santa Barbara, Calif., found that Bertelsmann and Middelhoff violated oral and written contracts with Buettner and von Blottnitz."
