Vivendi Universal, S.A.
PLAINTIFFS WIN JURY VERDICT IN SECURITIES FRAUD CLASS ACTION AGAINST VIVENDI
In re Vivendi Universal, S.A. Sec. Litigation, 02 Civ. 5571 (RJH/HBP)(S.D.N.Y.)
On January 29, 2010, the three month long securities fraud trial against Vivendi Universal, S.A., culminated with a jury verdict finding Vivendi liable for securities fraud on all 57 material misstatements. The Vivendi case is just one of nine securities class actions tried to verdict based on wrongs committed following the passage of the Private Securities Litigation Reform Act in 1995. The Hon. Richard J. Holwell, of the United States District Court for the Southern District of New York, presided over this litigation and the trial.
Since 2002, Abbey Spanier, LLP has represented the class plaintiffs in this long pending class action against defendants Vivendi Universal, S.A., and its two most senior officers, Jean Marie Messier (the company's CEO and Chairman until his ouster in July 2002) and Guillaume Hannezo (the company's CFO until July 9, 2002). From 2000 through 2002, defendants embarked on a $77 billion acquisition binge, turning a small French water utility company into a global media, communications and environmental services conglomerate.
The jury, after deliberating for three weeks, found defendant Vivendi violated the federal securities laws by making false and misleading statements concerning Vivendi's liquidity and overall performance between October 30, 2000, and August 14, 2002 (the "Class Period"). The class consists of all persons from the United States, France, England and the Netherlands who purchased or otherwise acquired ordinary shares or American Depository Shares ("ADS's") of Vivendi during the Class Period. See Class Notice at www.vivendiclassaction.com.
SUMMARY OF THE LITIGATION
DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT DENIED
The jury verdict in a securities fraud class action trial against Vivendi S.A. will entitle investors to recover as much as an estimated $9.3 billion, or €6.6 billion, according to attorneys for the plaintiffs.
The case was filed in 2002 and has been on trial in federal court in New York since October 5, 2009. The class includes persons from France, the United States, England, and the Netherlands who acquired Vivendi securities during the period October 30, 2000 to August 14, 2002. Plaintiffs alleged that defendants concealed the company's true liquidity risk during the class period, and investors suffered losses resulting from a liquidity crisis in mid-2002.
"This verdict shows that deserving investors can get just compensation through class actions, even against the strongest opposition. Very few of these cases go all the way to trial, and we are gratified at the outcome," plaintiffs' attorneys from the New York law firms Abbey Spanier LLP, Milberg LLP, and Browne Woods George LLP said in a joint statement.
The lead plaintiffs in the case were the Retirement System for the General Employees of the City of Miami Beach and several individuals. Gerard Morel, a retiree from Caen, France, who testified at the trial, commented: "I am particularly proud that French shareholders were included in the class. It is a victory for investors everywhere." Rick Rivera, pension administrator for the Miami Beach retirement fund, stated: "This case shows that pension funds can play a positive role in making sure the stock market is free of fraud and is fair for all investors."
The verdict was issued on a "per-share" basis. The total recovery amount is based on an analysis by plaintiffs' economics expert assuming all class members submit claims. The amount includes prejudgment interest that may be added by the court. Class members' entitlements will depend on a number of factors, including their purchase and sale dates. A claims procedure, under supervision of the court, will be announced and publicized after the outcome is finalized.
VIVENDI UPDATE - MORRISON v. NATIONAL AUSTRALIA BANK LTD.
In Morrison, the Supreme Court considered whether Section 10(b) of the Securities Exchange Act of 1934 provides a cause of action to "foreign plaintiffs suing foreign and American defendants for misconduct in connection with securities traded on foreign exchanges." The Supreme Court held that Section 10(b) applies to claims asserted in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States. The Morrison Court did not consider claims by U.S. purchasers or any claims with respect to a security identified as being listed or registered on a U.S. stock exchange.
In briefs submitted to Judge Holwell and during the July 26, 2010 hearing, Class Plaintiffs argued that the verdict in favor of all class members remains intact after Morrison for several reasons. First, Morrison does not affect the verdict in favor of class members who purchased ADRs because Vivendi ADRs were listed on the New York Stock Exchange and purchased in the United States. Second, in Morrison the Court only considered whether "foreigners" were covered by Section 10(b), so claims by U.S. purchasers, like the U.S. class members who purchased Vivendi ordinary shares, were not directly addressed by the Supreme Court. Third, as Vivendi has admitted, its ordinary shares, were listed on the New York Stock Exchange and were registered under the Securities Exchange Act of 1934. Plaintiffs argued that under Morrison, that means that class members who purchased Vivendi ordinary shares (including foreign class members) are covered by Section 10(b).
In an attempt to reduce its damages from the January 29, 2010 jury verdict against it, Vivendi argued that the holding in Morrison forecloses the claims of all purchasers of Vivendi ordinary shares because they were neither listed nor sold on an American stock exchange, but instead were listed only on foreign exchanges, where they were subject to foreign laws and regulations. Vivendi has requested that the Court enter judgment as a matter of law dismissing with prejudice the Section 10(b) claims of all shareholders who purchased Vivendi ordinary shares.
SUMMARY NOTICE TO CLASS MEMBERS
To: All persons from the United States, France, England and the Netherlands who purchased or otherwise acquired American Depositary Shares ("ADSs" or "ADRs") of Vivendi Universal, S.A., ("Vivendi") between October 30, 2000 and August 14, 2002 ("Class Members").
This is a Court-approved notification of the jury verdict holding defendant Vivendi liable in this case. The jury verdict also found that two former senior officers of Vivendi, Jean-Marie Messier and Guillaume Hannezo, did not violate the securities laws and are not liable on any of the claims asserted against them. If you are a Class Member, you are entitled to file a claim for damages. The deadline for filing of claims is May 9, 2013. You may obtain a Claim Form and other information at www.vivendiclassaction.com or by calling 1-800-767-2840 toll-free. Vivendi will appeal the jury verdict and other aspects of the case, and the result is not final.
Attorneys for the plaintiffs ("Class Counsel") intend to file an application for an award of attorneys' fees and reimbursement of their nontaxable costs and expenses, to be paid out of the damages awarded to Class Members. Only amounts approved by the Court will be awarded. Class Counsel will request an award of attorneys' fees of up to one-third of the amount of any damages and prejudgment interest payable to the Class. The Court will set a hearing on the application after the conclusion of the claims procedure. Relevant deadlines, the hearing date, and other documents will be posted at www.vivendiclassaction.com.
Clerk of Court