35
Annual Report -
2013
-
Vivendi
Group Profile | Businesses |
Litigation
| Risk Factors
1
Securities Class Action in the United States
Since July 18, 2002, sixteen 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.”
In a decision dated February 17, 2011 and issued on February 22, 2011,
the Court, in applying the “Morrison” decision, confirmed Vivendi’s
position by dismissing the claims of all purchasers of Vivendi’s ordinary
shares on the Paris stock exchange and limited the case to claims of
French, American, British and Dutch purchasers of Vivendi’s ADRs on the
New York Stock Exchange. The Court denied Vivendi’s post-trial motions
challenging the jury’s verdict. The Court also declined to enter a final
judgment, as had been requested by the plaintiffs, saying that to do
so would be premature and that the process of examining individual
shareholder claims must take place before a final judgment could be
issued. On March 8, 2011, the plaintiffs filed a petition before the
Second Circuit Court of Appeals seeking to appeal the decision rendered
on February 17, 2011. On July 20, 2011, the Court of Appeals denied
the petition and dismissed the claim of purchasers who acquired their
shares on the Paris stock exchange.
In a decision dated January 27, 2012 and issued on February 1, 2012, the
Court, in applying the Morrison decision, also dismissed the claims of
the individual plaintiffs who purchased ordinary shares of the Company
on the Paris stock exchange.
On July 5, 2012, the Court denied a request by the plaintiffs to expand
the class to nationalities other than those covered by the certification
decision dated March 22, 2007.
Section 3
Litigation
Vivendi 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, 2013, provisions recorded by Vivendi for all claims
and litigations amounted to €1,379 million, compared to €1,357 million
as of December 31, 2012. 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 the Company’s and on its group’s financial position, profit, business
and property, other than those described herein.
