37
Annual Report -
2013
-
Vivendi
Group Profile | Businesses |
Litigation
| Risk Factors
1
insider trading, and a 10-month suspended prison sentence and a fine of
€5 million for Mr. Edgar Bronfman Jr. for insider trading. In the course of
the trial, a number of civil parties have submitted an application to the
Paris Court of Appeal for a priority preliminary ruling on constitutionality.
The application concerned the impossibility, for a civil party, to appeal
a decision by a first instance court to drop charges. Since the same
question is currently pending before the Constitutional Council, the
Court of Appeal has stayed the proceedings with regard to the issues
relating to the dropped charges, and heard oral arguments on these
issues on April 8 and 9, 2014. The Court will rule on these and the other
issues in a single judgment on May 19, 2014.
LBBW and al. against Vivendi
On March 4, 2011, 26 institutional investors from Germany, Canada,
Luxemburg, Ireland, Italy, Sweden, Belgium and Austria filed a complaint
against Vivendi with the Paris Commercial Court seeking to obtain
damages for losses they allegedly incurred as a result of four financial
communications issued by Vivendi in October and December 2000,
September 2001 and April 2002. Then on April 5 and on April 23, 2012,
two similar complaints were filed against Vivendi: the first one by a
US pension fund, the Public Employee Retirement System of Idaho
and the other by six German and British institutional investors. Finally,
on August 8, 2012, the British Columbia Investment Management
Corporation also filed a complaint against Vivendi on the same basis.
The cases are currently in the pretrial stage.
California State Teachers Retirement System
and al. against Vivendi and Jean-Marie Messier
On April 27, 2012, 67 institutional foreign investors filed a complaint
against Vivendi and Jean-Marie Messier before the Paris Commercial
Court seeking damages for losses they allegedly incurred as a result of
the financial communications made by Vivendi and its former leader,
between 2000 and 2002. On September 6, 2012, 24 new plaintiffs joined
these proceedings; however, in November 2012, two plaintiffs withdrew
from the proceedings. The case is currently in the pretrial stage.
Actions against Activision Blizzard, Inc.,
its Board of Directors, and Vivendi
In August 2013, a derivative action was initiated in the Los Angeles
Superior Court by an individual shareholder against Activision
Blizzard, Inc. (“Activision Blizzard” or the “Company”), all of the
members of its Board of Directors and against Vivendi. The plaintiff
alleges that Activision Blizzard’s Board of Directors and Vivendi
breached their fiduciary duties by approving the divestment of Vivendi’s
share ownership in the Company. The plaintiff, Todd Miller, claims that
the transaction would not only be disadvantageous to Activision Blizzard
but that it would also confer a disproportionate advantage to a group
of investors led by Robert Kotick and Brian Kelly, the Company’s Chief
Executive Officer and Co-Chairman of the Board, respectively, and that
those breaches of fiduciary duty were aided and abetted by Vivendi.
On September 11, 2013, a second derivative action based on essentially
the same allegations was initiated in the Delaware Court of Chancery
by another minority shareholder of Activision Blizzard, Anthony Pacchia.
On the same day, another minority shareholder, Douglas Hayes,
initiated a similar action and also requested that the closing of the
sale transaction be enjoined pending approval of the transaction
by Activision Blizzard’s shareholders. On September 18, 2013, the
Delaware Court of Chancery granted the motion enjoining the closing of
the transaction. However, on October 10, 2013, the Delaware Supreme
Court overturned this decision, allowing for the completion of the
transaction. The case will proceed on the merits.
On November 2, 2013, the Delaware Court of Chancery consolidated the
Pacchia and Hayes actions into a single action entitled
In Re Activision
Blizzard Inc. Securities Litigation
. On March 14, 2014, a similar new
action was initiated in the Delaware Court of Chancery by a minority
shareholder, Mark Benston.
Vivendi Deutschland against FIG
Further to a claim filed by CGIS BIM (a former subsidiary of Vivendi)
against FIG to obtain the release of part of a payment remaining due
pursuant to a buildings sale contract, FIG obtained, on May 29, 2008,
the annulment of the sale following a judgment of the Berlin Court
of Appeal, which overruled a judgment rendered by the Berlin High
Court. CGIS BIM was ordered to repurchase the buildings and to pay
damages. Vivendi delivered a guarantee so as to pursue settlement
negotiations. As no settlement was reached, on September 3, 2008,
CGIS BIM challenged the validity of the reasoning of the judgment.
On April 23, 2009, the Regional Berlin Court issued a decision setting
aside the judgment of the Berlin Court of Appeal dated May 29, 2008.
On June 12, 2009, FIG appealed that decision. On December 16, 2010,
the Berlin Court of Appeal rejected FIG’s appeal and confirmed the
decision of the Regional Berlin Court in April 2009, which decided in
CGISBIM’s favor and confirmed the invalidity of the reasoning of the
judgment and therefore overruled the order for CGIS BIM to repurchase
the building and pay damages and interest. This decision is now final.
In parallel, FIG filed a second claim for additional damages in the Berlin
Regional Court which was served on CGIS BIM on March 3, 2009.
On June 19, 2013, the Berlin Regional Court ordered CGIS BIM to pay
FIG the sum of €3.9 million together with interest from February 27,
2009. CGIS BIM has appealed this decision.
Lagardère against Vivendi, Canal+ Group, and Canal+ France
On February 12, 2013, Lagardère Holding TV, a 20% shareholder of
Canal+ France, and Mr. Dominique D’Hinnin and Mr. Philippe Robert,
members of the Supervisory Board of Canal+ France, filed a complaint
against Vivendi, Canal+ Group and Canal+ France with the Paris
Commercial Court. The Lagardère Group is seeking nullification of the
cash management agreement entered into between Canal+ France
and Canal+ Group on the grounds that it constitutes a related party
agreement and hence, is seeking restitution, under penalty, from
Canal+ Group, of the entire cash surplus given over by Canal+ France
under the agreement. The parties have agreed to the appointment of
a mediator to help find an amicable solution to the dispute between
them. On June 10, 2013, the Paris Commercial Court appointed Mr. René
Ricol as the mediator. Following the mediation process, which ended
on October 14, 2013, the different parties entered into a settlement
agreement dated November 5, 2013, which put an end to the disputes
between them.
Compañía de Aguas de Aconquija and Vivendi
against the Republic of Argentina
On August 20, 2007, the International Center for Settlement of
Investment Disputes (“ICSID”) issued an arbitration award in favor of
Vivendi and Compañia de Aguas de Aconquija (“CAA”), its Argentinian
subsidiary, relating to a dispute that arose in 1996 regarding the water
concession it held between 1995 and 1997, in the Argentinian Province
of Tucuman. The arbitration award held that the actions of the provincial
authorities had infringed the rights of Vivendi and its subsidiary, and
were in breach of the provisions of the Franco-Argentine Bilateral
Investment Protection Treaty. The arbitration tribunal awarded Vivendi
and its subsidiary damages of USD 105 million plus interest and costs.
