A federal jury awarded $956 million to Liberty Media in a deal involving the USA Networks, saying Vivendi deceived it with rosy statements.
Jury Says Vivendi Defrauded Liberty Media
NEW YORK (AP) — A federal jury on Monday awarded $956 million to Liberty Media after concluding that the French entertainment group Vivendi deceived it in a decade-old deal involving the USA Networks.Add to Portfolio
The jury in United States District Court in Manhattan issued the award after hearing evidence related to a stock swap involving the network.
Liberty Media had accused Vivendi of deceiving it with rosy statements about its finances when executives inside the company were aware of a liquidity crisis.
The verdict stemmed from a lawsuit Liberty Media brought in 2003, accusing Vivendi of waiting until its transaction with USA Networks and Liberty Media officially closed before reacting publicly to a downgrade of its debt rating and addressing concerns about liquidity.
After the verdict was announced, Vivendi said in a statement that it would appeal the verdict, using “all available paths of action to overturn the verdict or reduce the damages award.”
It added that it believed “strongly that it did nothing wrong and will continue to vigorously defend itself.”
Liberty Media, in a statement of its own, said it planned to seek interest payments on the verdict amount.
During closing arguments, Liberty Media’s lawyer, Michael Calhoon, urged jurors to “look at these internal memos, inside the company, talking about what was really going on inside the company when the company was saying to the public and to Liberty something totally different.”
Referring to the stock swap in the transaction, he said: “We took the risk of the price falling. We didn’t take the risk of fraud.”
Repeatedly in the trial, jurors heard about an e-mail in which Vivendi’s chief financial officer wrote: “I feel like I’m in the death seat of a car. I hope it doesn’t end in shame.”
Jim Quinn, a lawyer for Vivendi, said the company had its own reasons for closing the deal and did not rely on misleading statements.
“I think we proved that in spades,” he said.
He added that “despite warnings, despite the red flags, Liberty Media did nothing to investigate the problems at Vivendi.”
In the end, the jurors were left to decide whether Vivendi had made false statements in its contract with Liberty. The jury found it had and assessed damages.
Calhoon had told jurors Vivendi should “pay for their fraud.”
“They shouldn’t get some kind of blizzard of confusion discount,” he said.