Vivendi Universal (France)
Status: Ongoing Case
Labaton Sucharow represents clients as liaison counsel in an action in France against Vivendi Universal (Vivendi), a French multinational mass media and telecommunication company headquartered in Paris, France.
The plaintiffs allege that Vivendi engaged in improper accounting practices and misled the market with false information regarding its financial health. From 2000 to 2001, the company grew through several acquisitions, on which it collectively spent approximately €600 billion. When share prices began to fall in 2001, Vivendi suffered severe losses and cash flow problems. Despite this, Vivendi issued press releases during 2002 portraying cash flows as “excellent” and operating earnings as better than projections and ahead of targets. Then, in July 2002, Vivendi admitted to a loss of €13.6 billion for 2001 and accumulated debts of €37 billion. For the financial year 2001 through 2002, Vivendi reported losses of €23.3 billion, which was the biggest corporate loss reported in French corporate history.
Originally brought in the U.S. District Court for the Southern District of New York in 2002, the Vivendi class action is one of the many securities cases disrupted by the U.S. Supreme Court’s decision in Morrison v. National Australia Bank, which limited the ability of purchasers of securities outside of the United States to pursue claims under the federal securities laws in U.S. courts. In light of this development, many damaged investors elected to file actions in France.
The action continues to work its way through the “expertise phase,” during which the parties are meeting with an expert designated by the court in order to ascertain damages to investors. The expert is reviewing the documents and preparing his conclusions to be filed with the court.