Monday, March 7, 2005

Homestore Finalizes Class Action Settlement

Westlake Village-based Homestore said this morning that it has reached final settlement on the class action lawsuit filed against the company in 2001. Homestore had been sued by the California State Teachers' Retirement System over inflation of the company's revenues and subsequent collapse in stock price. Homestore's will now start distribution of $13M in cash and 20 million new shares of Homestore stock to members of the class action suit. Homestore, AOL, Cendant, and others were sued by the California pension fund after the stock had a runup to $138 per share and a drop to $1.00 per share after an accounting scandal involving bogus advertising barter transactions.