Aol Time Warner: This Time It's Personal

AOL Time Warner hoped to put an end last week to its three-year saga of turf wars, power plays and a gut-wrenching stock plunge. Steve Case, the company's chairman, finally stepped down. The board quickly gave Richard Parsons, the CEO, the additional title of chairman. "This is the management team for the foreseeable future," Parsons tells NEWSWEEK. "The company is on the mend." But the company has spun off a new soap opera, this one involving Gerald Levin, Parson's retired boss and the longtime CEO of Time Warner who helped engineer the AOL deal. Levin disclosed that he was dumping his wife of 32 years, Barbara, to marry a woman he'd fallen in love with seemingly overnight. According to friends of Levin and his estranged wife, he began a relationship with Laurie Perelman, a former Hollywood agent-cum-psychologist, about two months ago. They first met about a year ago when she approached Levin about investing in a start-up corporate-counseling business. Levin became an adviser. In late December he told Barbara that the marriage was kaput, friends of the couple say, and that he planned to marry Perelman. In early January he traveled with her to Hawaii, canceling a planned trip to Key West, Fla., for a gala celebrating his wife's 60th birthday. From Hawaii, Levin began to phone New York acquaintances to tell them about his new personal life. He said he was "profoundly happy," says one acquaintance. For now Levin is losing the PR war in the New York tabloids, with the rival Post and Daily News suggesting that he's lost his senses. Barbara Levin will walk away with big bucks from the breakup, the tabloids noted. That is, if her husband's creditors don't skin him first. The Wall Street Journal recently reported that he was selling a stake in a California vineyard, the couple's luxury triplex in New York and other real estate to pay off debt. But friends familiar with his finances note that Levin still holds options on about 13 million shares of AOL stock, which he doesn't have to exercise for 12 years--ample time for the company to recover.