Date set for shareholder lawsuit against French conglomerate Vivendi

A date has ben set for a shareholder securities fraud lawsuit against French entertainment conglomerate, Vivendi.

The Commercial Court of Paris has set the trial date to start on 8 December 2020.The current action brings together a group of nearly 90 institutional investors from the US, Europe and Asia, including large public pension funds, mutual funds and international asset managers in the UK, Germany and US, as well as Sweden, Norway, Switzerland, Denmark, Finland, Ireland, Spain and other countries.

These Investors assert claims of nearly €1bn, stemming from an alleged scheme that Vivendi undertook to fraudulently overstate financial results from 2000-02 under then-CEO Jean-Marie Messier, who is also a defendant in the case.

The investor group contends that Messier and other Vivendi executives presented fake financials to conceal the existence of a severe liquidity crisis at the company following its USD 46bn tie-up with Seagram and Canal Plus. Vivendi shares went into a freefall when the company’s true financial health became apparent.

Last December, the court ruled that documents in the two US trial wins could be used in the case in the French court. Vivendi had attempted to exclude a large number of exhibits, including nearly 100 company emails and other documents used in previous US investor lawsuits against the company, which resulted in nearly USD 2bn in settlements.

Many of the documents had been at the centre of a shareholder class action in the US that resulted in a jury verdict against Vivendi in 2010 holding that the company made multiple false and misleading statements about its financial health. The verdict was upheld on appeal in 2016 and US based investors have already received their compensation.

In addition, the media/communications conglomerate faces additional cases in Europe stemming from the same claims that could double its liability exposure to at least €2bn, including the accumulation of statutory penalties in France.

The investor claims at issue in the French case are also nearly identical to another case in the US previously brought by Liberty Media, resulting in a USD 775m settlement payment by Vivendi in 2016. A federal jury in 2013 had awarded Liberty Media nearly USD 1bn in damages over claims that the conglomerate had hidden from shareholders the true state of its finances and inflated the value of its shares.

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