Belo Settles Shareholder Lawsuit Over Circulation
DALLAS (AP) ¿ Belo Corp. said Wednesday that it has settled a 2004 shareholder lawsuit related to the inflated circulation of a newspaper it previously owned, without paying a "material" amount.
Belo Corp., a TV station owner, had owned The Dallas Morning News until last year, when it spun off its newspaper holdings to A.H. Belo Corp.
In August 2004, an internal investigation revealed that the paper had been overstating its circulation. The paper is distributed exclusively by independent contractors.
In addition, Belo said a change in the methods of calculating circulation would cause the figure to drop as well.The day following the disclosure, Belo's stock dropped by 7 percent. The lawsuit alleged that Belo purposely inflated the paper's circulation to overcharge advertisers and inflate its stock price. Last year, a federal judge said the lawsuit failed to prove that the decline in Belo's stock price came from the paper's inflated circulation instead of other factors that caused the paper to lose readership. The court denied the plaintiffs' request to classify the lawsuit as a class action. In August, an appeals court affirmed the lower court's denial of class certification. Shares of Belo, based in Dallas, were up a nickel to $4.79 on Wednesday. A.H. Belo fell 14 cents, or 2.9 percent, to $4.75.
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