French entertainment group Vivendi has vowed to contest vigorously a jury verdict, handed down on Monday, that awarded Liberty Media Corp. $954.6 million in damages for Vivendi’s alleged breach of contract stemming from a network deal struck between the two companies in 2001. The lawsuit, first brought by Liberty in 2003, concerns a $10.3 billion agreement in which Liberty exchanged most of its stock holdings in USA Networks for a 3.5% stake in Vivendi. At that time, former Vivendi Chairman Jean Marie Messier was pursuing a program of transforming Vivendi from a utilities firm into a major media conglomerate, and that strategy involved a flurry of acquisitions that piled up a mountain of debt for Vivendi. Charging that Vivendi hid its financial difficulties from Liberty and that Vivendi waited until its share swap with Liberty was complete before Vivendi reacted publicly to a downgrade of its debt rating, Liberty filed suit, accusing the French company of fraud and breach of contract. In closing arguments capping a four-week trial that took place before the United States District Court in Manhattan, counsel for Liberty advised the jury to “look at . . . 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.” In the end, the jury agreed with Liberty’s claims, awarding damages of $954.6 million, on which Liberty said it would next seek interest payments. Voicing strong disagreement with the verdict, Vivendi promised it will “continue to vigorously defend itself in any subsequent appellate proceedings.”
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Liberty Media awarded $954.6 million in dispute against Vivendi
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