Vivendi Must Defend Securities Fraud Suit

Vivendi Universal, the world’s fifth-largest media company, must defend a lawsuit accusing the company and former Chief Executive Jean-Marie Messier of defrauding investors, a judge ruled.

U.S. District Judge Harold Baer in Manhattan said in a 40-page opinion that investors had made enough allegations to sustain their securities fraud suit.

Baer cited, for instance, a note sent to Messier by Vivendi’s former Chief Financial Officer Guillaume Hannezo imploring the CEO to reduce debt, even as Messier was telling investors the company was strong.

The ruling is a setback to Paris-based Vivendi, which is cutting debt to redress a buying spree by Messier that brought the company to the brink of a bankruptcy filing.