PARIS — A key battle in the luxury wars will be waged today in the commercial court here.
This story first appeared in the November 17, 2003 issue of WWD. Subscribe Today.
LVMH Moët Hennessy Louis Vuitton, which lodged a $115 million (100 million euros) bias suit against investment firm Morgan Stanley one year ago, will finally argue its plea before a panel of judges. The case is considered a first in Europe and is bound to be followed closely by other luxury players and Wall Street watchdogs.
Lawyers for LVMH are expected to make their arguments first, with Morgan Stanley then outlining its defense and the reasons behind its counterclaim of $11.5 million for procedures it describes as “abusive.” The judges are then allowed to ask questions of both parties before adjourning for deliberations. Sources familiar with the case said a judgment could be delivered as soon as next month.
Since Morgan Stanley’s counterclaim was joined with LVMH’s original suit, it is expected the judges will rule on both issues at the same time.
Claire Kent, the Morgan Stanley luxury analyst who is at the center of the case, accused by LVMH of waging an anti-LVMH, pro-Gucci campaign in her research reports and the media, is not expected to be present. Morgan Stanley advises Gucci on mergers and acquisitions, and has denied any bias or conflict of interest.
The case has been slowly winding its way through the courts amidst a backdrop of mounting fear of reprisals by equity researchers.
Morgan Stanley presented its defense last May, accusing LVMH of manipulating Kent’s writings to construct its case. In the interim, LVMH submitted conclusions and new evidence, and Morgan Stanley responded in turn. No documents were made available to the media, but today’s hearing is open to the public.