Big Verdict in the Big Apple: R. Stan Mortensen on the Vivendi Recovery

RStanMortenson_compressed.jpg"When I woke up this morning," says R. Stan Mortenson, a business litigator with Baker Botts in D.C., while walking around Manhattan Tuesday, "I thought to myself, 'Gee. I don't have to go to court today.' And it felt very odd."

Mortenson was in New York for more than a month, representing Liberty Media in a nine-year-old lawsuit against Vivendi, a media company in France, for fraud and breach of contract. Last Monday, the jury in Manhattan federal court delivered a $956 million verdict in favor of Liberty Media and Mortensen. It's reported to be the largest recovery in U.S. courts this year.

 

"The financial recovery is quite rewarding, particularly after fighting the battle for nine years," says Mortenson, who worked with colleagues Alexandra Walsh and Michael Calhoon on the case. "The client was really very gratified because the jury saw the case the way we had seen it for nine years."

In 2001, Vivendi was transitioning from being a water utility company to a media entertainment conglomerate and wanted to add assets from USA Networks, Inc., of which Liberty owned a large portion, Mortenson says. In a $10.3 billion deal, which included 37.6 million Vivendi shares, Liberty handed over its stakes in USA Networks.

"As it turned out," Mortenson says, "the stock that [Liberty] took in trade for the USA Networks stock had been artificially inflated through a whole lot of earnings manipulation, false statements about how they were meeting their earnings targets and how successful they were being and so forth."

After the verdict, U.S. District Judge Shira Scheindlin facilitated discussions between the jury and both parties' attorneys, something Mortenson says has been rare in his more than 40 years of practice.

"It was gratifying to shake hands with the jurors who had given up nearly a month of their lives to sit in what, from time to time, probably most of the time, was pretty tedious stuff," Mortenson says.

He also found it interesting that the jury bonded the way they did. A week into proceedings, for example, the jury showed up in court in color-coordinated outfits.

"The guys would be in orange shirts, the ladies would be in yellow and the judge would remark on it and that encouraged it," Mortenson says. After the first afternoon of deliberation Friday, "I was walking back to my apartment and all of a sudden, I looked ahead of me and standing on the street corner was the entire jury taking a self portrait before they broke up for the weekend."

Vivendi plans to appeal the verdict, the company said in a statement.

"We're hoping that all aspects of the trial will be upheld in the judgment that will be entered and be sustained," Mortenson says. "I guess my biggest hope is that it would move along. But the experience in this case is that nothing moves rapidly, so I'm not holding my breath."