Judge Appeals to Time Warner, US West to Settle Problems

Time Warner Inc. and US West Inc. should resume talks to sort out differences over their partnership in Time Warner Entertainment, the judge presiding over their contract dispute said Friday.

Delaware Chancery Court Judge William Allen, speaking at the conclusion of an eight-day trial, appealed by name to Time Warner Chairman Gerald Levin and US West Chairman Richard McCormick, who were not present.

Allen said he will issue a ruling sometime between the end of May and the middle of June.

Englewood, Colo.-based US West is attempting to block Time Warner’s $7.5-billion purchase of Turner Broadcasting System Inc., the Atlanta-based owner of Cable News Network and other cable networks. It contends that the Turner acquisition would violate noncompete provisions of its 1993 partnership agreement with New York-based Time Warner.

US West executives testified this week that Time Warner misled US West into joining the partnership.

Time Warner countersued, charging that US West has improperly used its 25% stake in the partnership to keep Time Warner Entertainment out of important business alliances with companies such as AT&T; Corp., Sprint Corp., Tele-Communications Inc. and Comcast Corp. It seeks unspecified damages.

“I’ll make a decision, but it might not be a perfect one,” Allen said. Citing reams of conflicting testimony, including that of McCormick and Levin, he said any decision he makes would only reshuffle the deck. Eventually, Allen said, the companies will have to work out their differences.

Time Warner on Friday issued a news release saying it is not talking to US West about restructuring the partnership between the two. US West said the same thing earlier in the week.

Allen’s post-trial remarks echoed those of analysts, whose position has been that the court dispute will do little to settle the fundamental differences between Time Warner and US West. Analysts say the lawsuit is a sideshow to the real issues of control of the Time Warner Entertainment partnership.