The Paris Commercial Court ruled against Covéa and Chief Executive Thierry Derez, fining Derez personally and Covéa as well for misconduct related to the Paris-based mutual insurer’s 2018 takeover bid for reinsurer SCOR.

According to SCOR, in its Nov. 10, 2020, ruling, the court said that Derez committed a serious breach of his legal and fiduciary duties and obligations as a director of SCOR in his personal capacity (regarding loyalty, conflicts of interest, and confidentiality), by disclosing confidential SCOR information and documents to Covéa and its advisors with the aim of wrongfully favoring the preparation and execution of the $9 billion-plus unsolicited bid.

Derez was ordered to pay the sum of €479,376, plus interest (more than $565,000), in compensation for the damage his personal misconduct has caused SCOR.

The Court also ruled that Covéa SGAM and Covéa Coopérations knowingly participated in and benefited from Derez’s misconduct, and that the public communication of their unsolicited takeover bid for SCOR was wrongful.

Together, Derez, Covéa SGAM and Covéa Coopérations were ordered to pay €19.6 million, plus interest (more than $23.1 million), to compensate SCOR.

It was ruled “that COVEA SGAM and COVEA COOPERATIONS were complicit third parties in Mr. Derez’s misconduct as a SCOR director, which consisted of violating his obligation of confidentiality with regard to the information communicated to the SCOR board of directors,” and “that COVEA’s press release published on Sept. 4, 2018 and reiterated on Sept. 27, 2018, constitute[d] a tortious fault as a complicit third party, for which it is civilly liable,” SCOR reported in an announcement about the ruling.

SCOR noted that the penalties don’t settle the matter, and that additional legal proceedings are currently underway. These include criminal proceedings against Derez and Covéa in connection with Covéa’s unsolicited takeover bid for SCOR—for breach of trust and concealment of breach of trust respectively—expected to take place on July 5 and 6, 2021, before the Paris Criminal Court, and civil proceedings against Barclays (Covéa’s financial advisor and financing bank), for serious breach of SCOR’s confidence and trade secrets, scheduled to take place from June 14 to 23, 2021, before the London High Court of Justice.

Source: SCOR

Topics Mergers & Acquisitions