Paris court rules against Derez and Covéa over SCOR bid

Former SCOR director Thierry Derez and Covéa, the insurer that recently attempted to acquire the Paris-based reinsurance group, have been ordered to pay almost €20m in damages because of their misconduct during the bid. Covéa and Mr Derez responded by stating that the ruling contains “serious and multiple errors of appreciation, both in fact and in law”. They added, in a statement issued today, that “if this ruling sets a precedent, it would significantly limit directors’ rights in exercising their mission to defend, freely, the corporate interests of a company and its shareholders”. In a statement issued by SCOR, the reinsurer explained that the Paris Commercial Court ruled that Mr Derez committed a serious breach of his legal and fiduciary duties and obligations as a director of SCOR in his personal capacity. SCOR said the ruling was based on breaches of loyalty, conflicts of interest and confidentiality caused by Mr Derez’s decision to disclose confidential SCOR information and documents to Covéa and its advisers. SCOR said the aim of the disclosure was to “wrongfully” favour the preparation and execution of an unsolicited takeover bid for SCOR by Covéa. The court ruling stated: “Mr 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.” Mr Derez was ordered to pay the sum of €479,376, plus interest, in compensation for the damage his personal misconduct has caused SCOR, explained the reinsurance group. The court also ruled that Covéa SGAM and Covéa Coopérations knowingly participated in and benefited from Mr Derez’s misconduct, and that the public communication of their unsolicited takeover bid for SCOR was wrongful. “Covéa SGAM and Covéa Coopérations 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,” states the ruling. “Covéa’s press release published on 4 September 2018 and reiterated on 27 September 2018, constitutes a tortious fault as a complicit third party, for which it is civilly liable,” it adds. Mr Derez, Covéa SGAM and Covéa Coopérations were ordered to pay €19.6m plus interest, in compensation for the damage caused to SCOR. SCOR said that it welcomes the judgment of the Paris Commercial Court. The reinsurer is also pursuing the following action in relation to the failed takeover bid: Criminal proceedings against Mr Derez and Covéa for breach of trust and concealment of breach of trust respectively. This will take place on 5-6 July 2021, before the Paris Criminal Court. Civil proceedings against Barclays (Covéa’s financial adviser and financing bank), for serious breach of SCOR’s confidence and trade secrets. This will take place on 14-23 June 2021, before the London High Court of Justice. In its statement responding to the judgment, Covéa said: “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 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 statement continued: “Thierry Derez and Covéa strongly contest having been disloyal and having been in a conflict of interest.” 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.”

Paris court rules against Derez and Covéa over SCOR bid

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