184 / 348
4
Section 6 - Litigation
Financial Report
| Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated
Financial Statements | Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Section 6
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. As of December 31, 2014, provisions recorded by Vivendi
for all claims and litigations amounted to €1,206 million, compared to
€1,379 million as of December 31, 2013.
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 11, 2015, the date of the Management Board Meeting held to
approve Vivendi’s Financial Statements for the year ended December 31,
2014.
Vivendi litigation
■
■
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 in ated 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 in ation 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.
184
Annual Report 2014