Vivendi Challenges French Shareholders Over U.S. Class Action

Vivendi Challenges French Shareholders Over U.S. Class Action - 10/12/2009

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Vivendi Challenges French Shareholders Over U.S. Class Action
Matthew Campbell

Bloomberg. October 12, 2009
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EXCERPT: Vivendi SA sued two investors and a shareholder rights group in a Paris court over their participation in a U.S. lawsuit against the company. The Paris-based owner of the world’s largest music company argues Olivier Gerard and Gerard Morel, and the Association for the Defense of Minority Shareholders, or Adam, should take any legal action against Vivendi in France rather than New York, Vivendi’s lawyer said. Vivendi is fighting a lawsuit over whether its former Chief Executive Officer Jean-Marie Messier misled investors with upbeat statements about the company’s financial health between 2000 and 2002. Class action lawsuits are not permitted in France. […] The suit names Gerard and Morel as the “French representatives” in the class action, and describes Adam, the investor group, as its “initiator and organizer.” About two thirds of the parties to the class action are French, Vivendi spokesman Antoine Lefort said. The company’s position is “absolutely scandalous,” Colette Neuville, president of Adam, said by phone. “They want to have the advantages of double listing, which permits them to sell their shares to raise more capital, and at the same time, they refuse the inconveniences.” Vivendi is listed in Paris and New York. Adam says French rules should be changed to allow class action suits, which let large groups of plaintiffs participate in the same case. Vivendi, which initially asked for 1 million euros ($1.48 million) in damages from the defendants named in its complaint, will reduce its claim to 1,000 euros because the company is interested in the legal principle, “not a question of money,” Lefort said. The plaintiffs in the U.S. suit say Vivendi lied about its revenue and earnings by falsely claiming it was generating enough cash and earnings to meet its obligations on $21 billion in debt.

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