Bertelsmann faces $1bn pay-out

Music giant Bertelsmann may have to pay up to $1bn to two internet businessmen after losing a breach of contract lawsuit.

A California jury awarded the payment to two men who helped put together Bertelsmann’s 1995 merger with web portal AOL Europe.

Bertelsmann later sold half its stake in AOL Europe to Time Warner for $6.7bn.

A judge will decide the full scale of the payout to both individuals.

Start-up skills

Bertelsmann’s lawyer said the firm would contest the outcome by demanding a new trial.

Jan Buettner and Andreas von Blottnitz argued that they had provided the internet expertise that enabled Bertelsmann to join up with AOL Europe.

They said they were entitled to a slice of the proceeds when Bertelsmann sold its holding in AOL Europe.

The jury found against Bertelsmann and in favour of each of the two men on four counts, awarding $250m on each count.

But their lawyers have accepted that the jury’s intentions about the scale of the total payment and how it should be divided were unclear and required the judge’s decision.

Bertelsmann twice failed in its application to have the case tried in Germany.