Page 351 - 2012 Annual Report

351
VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
IV - VIVENDI SA 2012 STATUTORY FINANCIAL STATEMENTS
3. NOTES TO THE 2012 STATUTORY FINANCIAL STATEMENTS
Note 24 Litigation
Note 24. 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”).
The costs which may result from these proceedings are only recognized
as provisions when they are likely to be incurred and when the obligation
can reasonably be quantified or estimated, in which case, the amount of
the provision represents Vivendi’s best estimate of the risk, provided that
Vivendi may, at any time, reassess such risk if events occur during such
proceedings.
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.
The status of proceedings disclosed hereunder is described as of
February 18, 2013, the date of the Management Board meeting
held to approve Vivendi’s financial statements for the year ended
December 31, 2012.
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