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Homestore defendants agree to settle suit

August 04, 2007|From Bloomberg News

Time Warner Inc. agreed to pay $6.5 million to Homestore Inc. investors to settle a lawsuit over so-called round-trip transactions between its America Online unit and Homestore.

The California State Teachers' Retirement System, the lead plaintiff in the case first brought in 2001, will ask U.S. District Judge Stephen Wilson to give preliminary approval to the settlement at a hearing Monday in Los Angeles. Two other defendants, L90 Inc. and former Homestore executive Peter Tafeen, agreed to pay $1.4 million and $25,000, respectively.

Investors accused Westlake Village-based Homestore, a Internet home-listing service that has since changed its name to Move Inc., of misleading them by reporting revenue from ad sales to AOL and others that didn't bring in any money. Homestore and auditor PricewaterhouseCoopers settled earlier.

The new accord brings the total recovery for Homestore investors to more than $100 million, said Nancy Fineman, a lawyer for the pension fund.

"We're very pleased the three defendants agreed to settle," Fineman said.

Stuart Wolff, Homestore's former chief executive who in October was sentenced to 15 years in prison for directing the accounting fraud, and Cendant Corp. are the remaining defendants in the shareholders' lawsuit, Fineman said. Wolff's sentence has been stayed pending appeal.

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