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Vivendi, Liberty Media settle 2003 lawsuit, Vivendi will pay $775 million

Staff writer |
Vivendi has agreed with Liberty Media on a settlement regarding the lawsuit filed by Liberty Media, related to the formation of Vivendi Universal Entertainment in May 2002.

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The lawsuit was filed by Liberty Media in March 2003 in the U.S. District Court for the Southern District of New York.

Vivendi agreed to pay Liberty Media $775 million to settle the lawsuit. This agreement will lead Vivendi to record a reversal of provision of approximately €245 million in its 2016 accounts.

Given that this provision has already been deducted for tax purposes, this reversal of provision will be taxed in 2016.

In January 2013, following a jury verdict in favor of Liberty Media, the District Court awarded Liberty Media €945 million in damages and pre-judgment interest, an amount provisioned in Vivendi’s accounts.

An appeal and cross-appeal were subsequently filed by Vivendi and Liberty Media with the U.S. Court of Appeals for the Second Circuit. The cross-appeal of Liberty Media sought €584 million in additional pre-judgment interest and, if Liberty had prevailed on that issue, would have increased the award to €1.529 billion (approx. $1.729 billion).

As a result of the settlement, the letter of credit issued as a guarantee for the amounts awarded by the jury will be terminated and the related cash deposit will be returned to Vivendi.

The implementation of the foregoing transactions will have a positive net cash impact of approximately €270 million for Vivendi. Other terms of the settlement include an exchange of mutual releases from all claims relating to this matter, and the dismissal of all appeals and cross-appeals in the Second Circuit. The parties have notified the court of their settlement agreement.

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