US - The The US$35bn Teachers' Retirement System of Illinois (TRS) has filed a lawsuit against media corporation AOL Time Warner.
The federal suit seeks to recoup $25.3m lost by TRS in connection with the company’s 2001 merger.
Time Warner Inc. and its subsidiary AOL have been accused of artificially inflating the price of company securities by issuing false and misleading statements about its financial results and operating condition before, during and after the merger.
TRS is among 100 institutional investors that have “opted-out” of a $2.4bn class action settlement reached against AOL Time Warner last autumn. The legal maneuver is designed to recover a higher percentage of TRS losses than is possible in the class action settlement.
According toTRS, the fund pursued the same tactic when it “opted-out” of the WorldCom class action settlement in 2005; allowing the system to recover $13m in losses instead of $6m provided in the class action suit.
This is the second filed lawsuit in the space of a month for the TRS after it announced it accused former trustee Stuart Levine accusing him of a “criminal breach of fiduciary duty”.
TRS filed its lawsuit against AOL Time Warner in U.S. District Court in the Northern District of Illinois.
By Daniel Flatt
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