NEW YORK, Sept. 4, 2002 (PRIMEZONE) -- On August 29, 2002, the law firm of Wechsler Harwood LLP. (http://www.whhf.com) filed an amended class action suit against Vivendi Universal, S.A. (NYSE:V) ("Vivendi" or the "Company") and certain of its principal officers and directors in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased or otherwise acquired Vivendi securities between October 30, 2000 and August 13, 2002 (the "Class Period").
The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of Vivendi's securities.
Prior to and during the Class Period, defendant Jean-Marie Messier ("Messier") took Vivendi on an acquisition binge that, according to published reports, resulted in the Company amassing approximately $18 billion in debt as he turned the Company from a water concern into an entertainment powerhouse. During the Class Period, defendants made misrepresentations and/or omissions of material fact, including the following: (a) Misstating Vivendi's cash position and ability to service its debt obligations; (b) Misstating Vivendi's earnings in its public filings with the SEC and elsewhere as a result of failing to record write-downs of goodwill and other intangible assets associated with, inter alia, the acquisition of U.S. Filter, the equity investment in Elektrim Telekomunikacja, and the merger among Vivendi, Seagram and Canal+ long after it had become apparent that such assets were being carried at values vastly higher than their true values; (c) Failing to disclose that the exchange ratio for the merger between MP3.com, Inc. and Vivendi was distorted due to artificial inflation in the price of Vivendi American Depositary Receipts ("ADRs"); and (d) Failing to disclose that Vivendi had significant off-balance-sheet liabilities, including undisclosed sales of put options on tens of millions of dollars worth of Vivendi shares during 2001.
During the Class Period, defendants' false statements artificially inflated Vivendi ADRs to as high as $75.00 per ADR. Defendants reported favorable, but misleading, financial results to the market and represented that Vivendi was not as susceptible to economic problems as competitors and that the Company had the "highest resiliency and lowest sensitivity to recessionary environment." The defendants also represented that Vivendi was successfully implementing recent mergers which were being reorganized quickly to generate synergies. These positive but false statements allowed the Company to complete additional acquisitions in its $100 billion buying spree between 1998 and 2001. Late in June 2002, news leaked from Vivendi that its debt was at alarming levels, causing Vivendi's ADRs to decline in price from $28 to $20. Vivendi's ordinary shares declined in similar fashion. Nonetheless, Messier reassured the market that liquidity was not a problem. However, as ratings agencies continued to downgrade the Company's debt, the ADRs and ordinary shares continued to decline. On July 2, 2002, Vivendi's debt was downgraded again and the Company was in danger of default. On July 3, 2002, Messier was forced to resign.
If you purchased or otherwise acquired Vivendi securities during the period from October 30, 2000 through August 13, 2002 inclusive, you may, no later than September 16, 2002, move to be appointed as a Lead Plaintiff. A Lead Plaintiff is a representative party that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Vivendi securities during the Class Period, please contact Wechsler Harwood LLP.
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.