Paris:
In a judgment rendered on November 10, 2020, the Paris Commercial Court ruled that Covéa chairman and chief executive Thierry Derez Thierry 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 an unsolicited takeover bid for SCOR by Covéa.
It was ruled “that Derez committed a breach of contract for which he is civilly liable, by violating the commitments he made to SCOR SE as a director of the company in his personal capacity relating to conflicts of interest, confidentiality and loyalty.”
Derez was ordered to pay the sum of EUR 479,376, plus interest, in compensation for the damage his personal misconduct has caused SCOR.
The ruling comes after SCOR launched criminal actions against both mutual insurance company Covéa and its CEO Derez for an alleged "breach of trust and concealment of breach of trust" in relation to Covéa’s €8.2 billion offer to buy the reinsurer in 2018.
The Court also ruled that Covéa SGAM and Covéa Coopérations knowingly participated in and benefited from Thierry Derez’s misconduct, and that the public communication of their unsolicited takeover bid for SCOR was wrongful.
It was ruled “that COVEA SGAM and COVEA COOPERATIONS were complicit third parties in . 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 September 4, 2018 and reiterated on September 27, 2018, constitutes a tortious fault as a complicit third party, for which it is civilly liable”.
Thierry Derez, Covéa SGAM and Covéa Coopérations were ordered in solidum to pay the sum of EUR 19,603,191, plus interest, in compensation for the damage their misconduct has caused SCOR.
SCOR welcomes the judgment of the Paris Commercial Court.
SCOR reiterates that other legal proceedings are currently underway:Criminal proceedings against Thierry Derez and Covéa in connection with Covéa’s unsolicited takeover bid for SCOR – for breach of trust and concealment of breach of trust respectively – will take place on July 5 and 6, 2021, before the Paris Criminal Court.
Civil proceedings against Barclays (Covéa’s financial advisor and financing bank), for serious breach of SCOR’s confidence and trade secrets, will take place from June 14 to 23, 2021, before the London High Court of Justice.
COVEA and Thierry DEREZ appeal against the ruling
COVEA and Thierry DEREZ appeal against the ruling of the Paris Commercial Court, rendered today.
According to a press release by COVEA, this ruling contains serious and multiple errors of appreciation, both in fact and in law.In addition, it disregards an essential truth: it is for the corporate interest of both SCOR and its shareholders that COVEA 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.
Thierry DEREZ and COVEA strongly contest having been disloyal and having been in a conflict of interest If this ruling sets a precedent, it would significantly limit the directors’ rights in exercising their mission to defend, freely, the corporate interest of a company and its shareholders, said the release. .
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, said the release. .