NEW YORK, Aug. 19, 2002 (PRIMEZONE) -- The law firm of Wechsler Harwood Halebian & Feffer LLP ("Wechsler Harwood") announces that a class action has been commenced in the United States District Court for the Southern District of New York on behalf all persons who purchased or acquired Vivendi Universal, S.A. (NYSE:V) (Paris Bourse:EX FP) (" Vivendi" or the "Company") securities between the period of April 23, 2001 and July 2, 2002, inclusive (the "Class Period") against defendants Vivendi and certain of its officers and directors.
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 attempted to turn 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 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"); (d) Affirmatively misstating the value of goodwill and other intangible assets associated with, inter alia, the merger among Vivendi, Seagram and Canal+ by carrying such assets at the cost of acquiring them long after it had become apparent that Vivendi had overpaid to acquire such assets; and (e) Failing to disclose that Vivendi had significant off-balance-sheet liabilities in the form of its undisclosed sale of put options on tens of millions of dollars worth of Vivendi shares during 2001 in order to pay for stock options it awarded to executives.
During the Class Period, defendants' false statements artificially inflated Vivendi ADRs to as high as $68.80 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 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. Vivendi ADRs collapsed upon these revelations, falling to $15-21/32 on July 3, 2002, on huge volume of 8 million shares. This collapse wiped out billions of dollars in Vivendi shareholder value, compared to the end of 2001. Later, on July 9, 2002, Bloomberg News reported that the Commission des Operations de Bourse was reviewing statements released by Vivendi to ensure "they abide by our rules." The regulators had raided Vivendi's Paris headquarters as part of an investigation into whether Vivendi had disclosed relevant information to investors in the prior 18 months.
If you are a member of the Class described above, and if you meet certain other legal requirements, you may, no later than September 16, 2002, move the Court to serve as a lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whhf.com) has more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood Halebian & Feffer LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Craig Lowther, Wechsler Harwood Shareholder Relations Department: clowther@whhf.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca