Lawsuits: Bad Day At Black Rock

When CBS last November paid $362.5 million to buy twelve Ziff-Davis magazines (combined monthly circulation: more than 4.5 million), quite a few people thought that the broadcaster had paid too handsome a sum. But CBS Chairman Thomas Wyman remained unfazed, proclaiming the agreement "a rare opportunity to acquire a very successful, well-managed business."

Now that conviction has crumbled. In a suit filed last week in New York State Supreme Court, CBS contends that Ziff Corp., the parent company of Ziff- Davis, along with its auditors at Touche Ross, fraudulently misrepresented the company's finances when the deal for the dozen periodicals, including Modern Bride and Stereo Review, was struck. CBS alleges that Ziff Corp. understated costs, perhaps by $4 million, and overstated revenues and operating income, possibly by as much as $40 million. The broadcaster, whose Manhattan office tower is known as Black Rock, seeks an undetermined amount of damages.

Ziff Corp. calls CBS's charges "absurd." Says William Ziff Jr., chairman of the company's executive committee: "I am appalled. I am angry." The courts will decide whose ire is justified.