ATLANTA — Time Warner Inc. said it will take a nonrecurring $50-million charge against second-quarter earnings to help cover its share of a multimillion-dollar damage award a Georgia appeals court upheld Thursday.
The Georgia Court of Appeals ruled that New York-based Time Warner and other former owners of Six Flags Over Georgia must pay the theme park's new owners about $530 million for delaying the opening of a ride based on the "Batman" movies and other mismanagement.
The court upheld a suburban Atlanta jury's 1998 verdict that the world's largest entertainment company and its former partners in Six Flags deflated the amusement park's value before selling it in 1998 to Premier Parks Inc., now Six Flags Inc.
They were accused, among other things, of delaying the opening of the "Batman" ride, which was expected to be a big money-maker.
"The verdict reached by the jury . . . was unfounded and the result of a profoundly unfair trial," Time Warner President Richard D. Parsons said, adding that the company will appeal. "The decision today fails to recognize that."
When the jury awarded damages in 1998, Time Warner said the verdict would not be material to its financial results.
The appeals court noted in its decision that an expert at the trial said executives of Time Warner Entertainment Co. charged $4 million in expenses for such items as luxury cars and expensive lunches at Tavern on the Green in New York while the park was "underinvested, . . . not keeping pace . . . [and] suffering."
The park was owned by Time Warner Entertainment Co.--jointly owned by Time Warner and MediaOne Group Inc.--and an investor group led by Boston Ventures Ltd. before Premier Parks bought it.
The jury awarded $454 million in compensatory and punitive damages. With interest, the plaintiffs say, the award could come to about $530 million.
The appeals court decision by Judge John Ellington said Time Warner and the other investors "withheld vital business information, . . . undertook to compete with them . . . and carried out a plan to depress the value of their investment, the Six Flags Over Georgia Park."
In trading Thursday on the New York Stock Exchange, Time Warner shares rose $2.56 to $84.69 and Six Flags shares rose 88 cents to $23.25.