Former AOL Time Warner Chairman Steve Case learned as early as 2000 about transactions that allowed the company to overstate revenues ahead of its merger with Time Warner, according to court documents unsealed on Friday.
Case learned in a December 6, 2000 e-mail from AOL board member Miles Gilburne that AOL's dealmaking Business Affairs unit was under extreme pressure to help the company make its financial targets as it tried to close its purchase of Time Warner. The e-mail was among the documents, which were obtained by Reuters.
A Time Warner Inc spokeswoman had no comment regarding the documents.
The documents shed light on how much top executives at AOL knew about aggressive revenue accounting ahead of the 2001 purchase of Time Warner. The company's strong revenue growth had helped to boost its share price, which was used as currency for the acquisition.
The e-mail is part of an exhibit in a shareholder lawsuit by five California pension funds, including the California Public Employees' Retirement Fund and California State Teachers Retirement System, against AOL Time Warner, Case and others alleging losses of $1 billion due to AOL's financial misrepresentations.
"I am really worried about the deals Colburn and Schuler may be cutting now to deal with commerce pressure," Gilburne wrote in the e-mail. He was referring in that e-mail to Business Affairs President David Colburn and AOL Interactive Services President Barry Schuler.