Annual report 2014

Note 25. Litigation

Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated

Financial Statements | Statutory Auditors’ Report on the Financial Statements |

Statutory Financial Statements

Financial covenants

Vivendi is subject to certain financial covenants:

–– the €2.0 billion bank credit facility set up on November 27, 2014

contains customary provisions relating to events of default and

covenants in relation to negative pledge, divestiture and merger

transactions. In addition, at the end of each half-year, Vivendi SA

is required to comply with a specific ratio, based on consolidated

data, for the duration of the facilities. Non-compliance with this

ratio could result in the early repayment or cancellation of such

facilities. On December 31, 2014, Vivendi SA was in compliance

with this ratio,

–– the renewal of the credit facility when drawn is contingent upon

the issuer reiterating certain representations regarding its ability

to comply with its covenants under the loan agreement,

–– bonds issued by Vivendi SA (totaling €1,950 million as of

December 31, 2014) contain customary provisions related to

events of default, negative pledge and rights of payment (

pari-

passu

ranking) as well as a change in control trigger if the

corporate long-term rating of Vivendi SA is downgraded below

investment grade status (Baa3/BBB-) as a result of such an event.

Note 25.

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 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.

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 SA 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.

324

Annual Report 2014