Global re/insurer SCOR has announced that the Paris Commercial Court has ruled against Thierry Derez and Covéa for misconduct during the preparation and execution of Covéa’s unsolicited takeover bid for the French re/insurer.
The judgement rendered on November 10th, 2020, finds that Derez, the CEO of SCOR’s largest shareholder, Covéa, committed a serious breach of his legal and fiduciary duties and obligations as a Director of SCOR in his personal capacity, by disclosing confidential information and documents about the company to Covéa and its advisors.
As a result, Derez has been ordered to pay €479,376, plus interest, in compensation for the damage his misconduct caused SCOR.
Additionally, the court ruled that Covéa SGAM and Covéa Coopérations knowingly participated in and benefitted from Derez’s misconduct, and that the public communication of the unsolicited takeover bid was wrongful.
The court has ordered Derez, Covéa SGAM and Covéa Coopérations in solidum to pay the sum of approximately €19.6 million, plus interest, in compensation for the damage their misconduct has caused SCOR.
The ruling comes after SCOR announced plans to initiate criminal actions against Covéa and Derez following the rejection of an €8.2 billion takeover bid in August 2018.
SCOR has welcomed the judgement of the Paris Commercial Court and also reiterated that other legal proceedings are currently underway.
This includes criminal proceedings against Derez and Covéa in connection with the takeover bid, for breach of trust and concealment of breach of trust, scheduled to take place in July of next year before the Paris Criminal Court. Additionally, civil proceedings against Barclays are also underway, for serious breach of SCOR’s confidence in trade secrets, scheduled to take place in June of next year, before the London High Court of Justice.
In response, Derez and Covéa are set to appeal the ruling and “strongly contest having been disloyal and having been in a conflict of interest.”
They state that this ruling contains “serious and multiple errors of appreciation,” claiming that it disregards an essential truth: “it is for the corporate interest of both SCOR and its shareholders that Covéa expressed the wish to submit a proposal for a combination between the two companies. Such project would have notably guaranteed the financial soundness of SCOR and would have promoted its development.”
The pair warn that if this ruling sets a precedent, it would limit the directors’ rights in exercising their mission to defend, freely, the corporate interest of a company and its shareholders.
Adding: “It is now up to the Court of Appeal, before which an appeal is brought, to restore the truth, to state the law and decide whether it is allowed for any director to give themselves the means to submit to a board of directors a project that would not be approved by the Chairman of the board.”
