Grand Theft Auto Settlement for 'Hot Coffee'

Melinda Peer - Thomson Financial News Limited

Take-Two Announces Prelim. Settlement Related to Grand Theft Auto Modification

NEW YORK (Thomson Financial) - Shares of Take-Two Interactive Software Inc. slipped Friday after it announced the preliminary settlement of consumer class action lawsuits pending against the company and its subsidiary, Rockstar Games.

The suits were filed by buyers of the Grand Theft Auto: San Andreas video game who were offended by a third-party modification called 'Hot Coffee' that allows the game's characters to have virtual sex.

Under terms of the settlement, class members could receive an edited version of the game or a refund of up to $35 if they meet the following criteria: they bought the game before July 20, 2005, were offended by the altered game, they wouldn't have bought the game if they had been aware of the modification and they would have returned the game if they thought it had been possible.

The interactive video and computer game company has committed to spend at least $1 million with an out-of-pocket maximum roughly set at $2.8 million in addition to legal fees.

Take-Two previously established a reserve to cover expected costs of the settlement.

All claims will be dismissed without any admission of liability or wrongdoing by Take-Two if the proposed settlement receives approval from the District Court for the Southern District of New York.

Shares of the New York City-based company were down 5% at $15.16.

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