Legal fight stems from losses tied to USA Networks sale
Jean-Marie Messier casts a long shadow.The former CEO’s disastrous tenure at Vivendi continues to plague the French conglom as a Manhattan federal court Monday awarded John Malone’s Liberty Media nearly $1 billion in damages in a 2003 breach of contract and fraud lawsuit. A jury for the U.S. District Court for the Southern District of New York ruled that Liberty is entitled to €765 million (about $956 million) in damages for loses incurred after selling its USA Networks stake in exchange for 37.4 million Vivendi shares, a 3.6% interest, only to see the stock plummet in value. Initially worth about €2.3 billion in 2001 ($2.9 billion at today’s exchange rate), the value of Liberty’s Vivendi stake fell to $1.4 billion by the time the transaction was completed in May 2002. When Liberty sold its Vivendi stake in the fall of 2003 as part of General Electric’s acquisition of Universal, Liberty’s stake was valued at $832 million — hit by Messier’s pricey acquisitions. Vivendi’s been sued numerous times in the U.S. and France over Messier’s questionable statements to investors about the conglom’s health during his spending spree. Liberty said in a statement that it intends to seek pre-judgment interest on the jury award. It noted that the judgment wouldn’t be final until the court rules on any post-trial briefing. “Although Liberty expects the defendants to ask the court to set aside the verdict during this process, Liberty is confident that the court will deny that request and that the jury’s decision will stand.” Vivendi said in a statement from Paris Monday that it “strongly disagrees” with the lawsuit and “intends to pursue all available paths of action to overturn the verdict or reduce the damages award.” Vivendi acquired Universal parent Seagram from the Bronfman family in 2000. In a complex transaction over a decade ago, Vivendi acquired a controlling interest in USA Networks from Barry Diller and Liberty and merged it with Universal’s entertainment assets, putting Diller at the helm. As Messier’s empire crumbled, Universal was sold to GE, creating NBCUniversal, which was acquired in 2011 by Comcast.
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