But that might not be the end of the story. Each party has the right to appeal the court’s decision. That process could take two to three years, said the Paris legal source, noting that "the judges are very busy at the court of appeal. It’s a bit of a crisis in France."
An out-of-court settlement is also a possibility, but Metais characterized that as unlikely, as it would amount to at least a partial admission of fault by Morgan Stanley.
Many industry sources and legal experts polled by WWD suggest that the French group might have a tough time prevailing, given the lack of legal precedents. Still, sources allowed that Pierre Gode, Arnault’s right hand and a chief legal strategist, is a force to be reckoned with and that LVMH could harbor some secret weapons.
"Do not underestimate the home advantage of LVMH by suing in Paris," said Anthony Sabino, associate professor of law at the Tobin College of Business at St. John’s University, and a partner at Sabino & Sabino in Mineola, N.Y. "LVMH is going after Morgan Stanley, not as a securities law violation, but on the concept of fault. If the case had been filed in a U.S. court, the concept of fault would be similar to a tortious interference or defamation action."
Attorneys in the U.S., where there’s been an intense legal and media focus on the securities industry and conflict of interest issues, highlighted by the investigations of New York Attorney General Eliot Spitzer, are keeping an eye on the LVMH case.