Injunction Issued Against AOL Subsidiary

America Online Inc. subsidiary Digital City Inc. has been dealt a major setback in a lawsuit brought by a former partner, HotJobs.com Ltd., over an advertising contract. A state appeals court in Virginia issued a preliminary injunction Thursday reinstating the deal between the companies pending trial, finding that job search site HotJobs is “very likely to prove that [Digital City] breached the contract.” According to court papers, New York-based HotJobs has charged Digital City with breaking the deal after Dulles, Va.-based AOL entered an exclusive advertising agreement with online jobs board Monster.com. Monster, owned by New York-based TMP Worldwide Inc., is one of HotJobs’ main competitors. Separately, HotJobs.com investor TCW Group Inc. raised its stake in the job recruitment company to 10.4% from 5.5% of common shares outstanding. TCW Group, a Los Angeles money management firm headed by Robert Day, reported holding 2.84 million shares of HotJobs.com. HotJobs.com shares rose $4.56 on Thursday to $32. The company went public last August at $8 a share.