Jury Hits Bertelsmann With $250-Million Award for Pair

A Santa Barbara jury hit Bertelsmann with an estimated $250-million damage award Thursday for allegedly short-changing two former consultants who helped the German media conglomerate earn a fortune on the Internet.

Jurors sided with Jan Henric Buettner and Andreas von Blottnitz, two former Internet entrepreneurs retained by Bertelsmann to help pursue online business opportunities. The two helped arrange a deal in which Bertelsmann set up a European joint venture with America Online Inc. in 1995.

The two entrepreneurs, both Germans who moved to California in the late 1990s, contended that former Bertelsmann Chief Executive Thomas Middelhoff promised them a stake in the venture. Bertelsmann sold its half-stake in AOL Europe in 2000, reaping about $7 billion.

Bertelsmann “wasn’t willing to live up to their end” of the bargain with the two entrepreneurs, said their attorney, Bill Price. He added that the verdict may climb to about $1 billion, depending on the judge’s interpretation of jury findings.

But the media giant, whose assets include publishing business Random House and music unit BMG, denied that it offered the pair an equity stake and said it planned to seek a new trial. The company had tried unsuccessfully to have the case moved to Germany.

Bertelsmann attorney Anthony Murray noted that the case required jurors to consider conflicting translations of German contracts and to apply German law.

“Out of that confusion came this verdict,” Murray said. The pair were “only promised the right to participate in an executive compensation program, which they declined. Now they sue and seek billions of dollars.”

The two former consultants had at one point sought about $5 billion in damages, but later lowered their claim to $3 billion.