Page 45 - 2012 Annual Report

VIVENDI l 2012 l Annual Report 45
GROUP PROFILE – BUSINESSES – LITIGATION – RISK FACTORS 1
1
SECTION 3 - LITIGATION
SECTION 3 LITIGATION
In the normal course of its business, Vivendi is subject to various lawsuits,
arbitrations and governmental, administrative or other proceedings
(collectively referred to herein as “Legal Proceedings”).
As of December 31, 2012, provisions recorded by Vivendi for all claims
and litigations amounted to €1,357 million, compared to €479 million
as of December 31, 2011. Vivendi does not disclose details regarding
these provisions (save for some exceptions), as it believes that any such
disclosure could seriously harm its position.
To the company’s knowledge, there are no Legal Proceedings or any facts
of an exceptional nature, including, to the company’s knowledge, any
pending or threatened proceedings in which it is a defendant, which may
have or have had in the previous twelve months a significant impact on its
and on its group’s financial position, profit, business and property, other
than those described herein.
TRIAL OF VIVENDI’S FORMER OFFICERS IN PARIS
In October 2002, the financial department of the Paris Public Prosecutor’s
office (Parquet de Paris) launched an investigation into the publication
of allegedly false or misleading information regarding the financial
situation and forecasts of the company and the publication of allegedly
untrue or inaccurate financial statements for the fiscal years 2000 and
2001. Additional charges were brought in this investigation relating to
purchases by the company of its own shares between September 1, 2001
and December 31, 2001. Vivendi joined the proceedings as a civil party.
The trial took place from June 2 to June 25, 2010, before the 11th
Chamber of the Paris Tribunal of First Instance (Tribunal de Grande
Instance de Paris), following which the Public Prosecutor asked the Court
to drop the charges against the defendants.
On January 21, 2011, the Court rendered its judgment, in which it
confirmed the previous recognition of Vivendi as a civil party. Messrs. Jean
Marie Messier, Guillaume Hannezo, Edgar Bronfman Jr. and Eric Licoys
received suspended sentences and fines. Messrs. Messier and Hannezo
were also ordered to pay damages to shareholders who are entitled to
reparation as civil parties. The former Vivendi officers as well as some
civil parties appealed the decision. The trial before the Court of appeals is
scheduled to take place from October 28 to November 26, 2013.
On January 7, 2010, Philippe Foiret summoned Vivendi and Veolia to
appear before a Criminal Court in an attempt to hold them liable for the
offences committed by their former managers. On January 27, 2012, the
Criminal Court dismissed Mr. Foiret’s application.
SECURITIES CLASS ACTION IN THE UNITED STATES
Since July 18, 2002, 16 claims have been filed against Vivendi, Messrs.
Messier and Hannezo in the United States District Court for the Southern
District of New York and in the United States District Court for the Central
District of California. On September 30, 2002, the New York court decided
to consolidate these claims under its jurisdiction into a single action
entitled In re Vivendi Universal S.A. Securities Litigation.
The plaintiffs allege that, between October 30, 2000 and August 14,
2002, the defendants violated certain provisions of the US Securities
Act of 1933 and US Securities Exchange Act of 1934, particularly with
regard to financial communications. On January 7, 2003, the plaintiffs
filed a consolidated class action suit that may benefit potential groups
of shareholders.
On March 22, 2007, the Court decided, concerning the procedure for
certification of the potential claimants as a class (“class certification”),
that persons from the United States, France, England and the Netherlands
who purchased or acquired shares or American Depositary Receipts
(ADRs) of Vivendi (formerly Vivendi Universal SA) between October 30,
2000 and August 14, 2002, could be included in the class.
Following the class certification decision of March 22, 2007, a number
of individual cases were filed against Vivendi on the same grounds
as the class action. On December 14, 2007, the judge issued an order
consolidating the individual actions with the securities class action for
purposes of discovery. On March 2, 2009, the Court deconsolidated the
Liberty Media action from the class action. On August 12, 2009, the Court
issued an order deconsolidating the individual actions from the class
action.
On January 29, 2010, the jury returned its verdict. It found that
57 statements made by Vivendi between October 30, 2000 and
August 14,2002, were materially false or misleading and were made in
violation of Section 10(b) of the Securities Exchange Act of 1934. Plaintiffs
had alleged that those statements were false and misleading because
they failed to disclose the existence of an alleged “liquidity risk” which
reached its peak in December 2001. However, the jury concluded that
neither Mr. Jean-Marie Messier nor Mr. Guillaume Hannezo were liable
for the alleged misstatements. As part of its verdict, the jury found that
the price of Vivendi’s shares was artificially inflated on each day of the
class period in an amount between €0.15 and €11.00 per ordinary share
and $0.13 and $10.00 per ADR, depending on the date of purchase of
each ordinary share or ADR. Those figures represent approximately half
the amounts sought by the plaintiffs in the class action.
The jury also concluded that the inflation of the Vivendi share price fell to
zero in the three weeks following the September 11, 2001 tragedy, as well
as on stock exchange holidays on the Paris or New York markets (12 days)
during the class period.
On June 24, 2010, the US Supreme Court, in a very clear statement,
ruled, in the Morrison v. National Australia Bank case, that American
securities law only applies to “the purchase or sale of a security listed on
an American stock exchange”, and to “the purchase or sale of any other
security in the United States.”