Take-Two starts "Hot Coffee" settlements: Multi-million dollar loss
- March 01, 2007 13:14 PM PST
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The parent company of 2K and Rockstar is experiencing a double whammy, citing the start of class-action settlements and major profit losses.
By Eugene Huang
It's been a bad week for Take-Two - scratch that, a bad month.
Today, Reuters reports that Take-Two has agreed to begin settlement talks in a lawsuit involving Rockstar's Grand Theft Auto series. Although the report did not reveal specific details, it is assumed that it is in regards to the "Hot Coffee" class action suit filed by an 86-year old woman who had bought the game for her 14-year old grandson. A U.S. federal magistrate judge in Manhattan has asked for a status report of the settlement by March 12th.
And after an extended delay caused by a review of its historical stock option granting process, Take-Two finally released their financial results for the 2006 fiscal year, according to a press release. The company announced a $185 million dollar net loss, which it attributes to the transition between current-gen and next-gen console platforms. It also notes, however, that an estimated $6.9 million of the company's expenses were the result of legal and other professional fees.
The investigation into the company's stock-option practices also forced the filing of restated financial statements. The company is also pleased to announce that the results of the investigation found that none of Take-Two's current executive officers were involved in any wrongdoing, but prior executives have already been linked with the scandal. This includes former Take-Two CEO Ryan A. Brant, who pleaded guilty earlier this month for the backdating of Take-Two's stock options.
