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Italy: Assicurazioni Generali starts legal action against former CEO and General Manager

27 February 2014
On 19 February 2014, the board of directors of the largest and oldest Italian insurance company, Assicurazioni Generali, resolved to start the appropriate legal actions against the former chief executive officer, Giovanni Perissinotto, and the former general manager, Raffaele Agrusti, to seek compensation for damages suffered by Assicurazioni Generali as a consequence of certain transactions carried out, allegedly in conflict of interests, by the mentioned managers.

Assicurazioni Generali terminated the employment relationship with the mentioned managers respectively in 2012 and 2013. In particular, Mr Perissinotto was ousted from the company in June 2012 and received a severance package worth approximately € 10.6 million. On the other hand, Mr Agrusti arranged a mutual termination agreement with Assicurazioni Generali in October 2013, and agreed to terminate the employment relationship upon payment by Assicurazioni Generali of an aggregate amount approximately equal to € 6.1 million. Such a payment has not occurred yet.

In November 2013 the Italian Insurance Supervisory Authority (IVASS) requested, among others, that the risk and control committee would express an assessment on the possibility to bring an action against the former managers for directors' corporate liability, and that the board of directors would express its opinion on the adequacy of the end-of-service allowance granted to the two former managers.

As a result, following the verifications and assessments carried out upon request of IVASS, Assicurazioni Generali resolved to take actions against the former managers, and granted the Group CEO, Mario Greco, with powers to undertake legal proceedings, before the employment tribunal, aimed to: (i) challenge and contest the settlement agreements reached with Mr Agrusti and Mr Perissinotto; (ii) cancel the rights granted to Mr Agrusti; (iii) recuperate the amount paid to Mr Perissinotto; and (iv) claim damages arising from non-performance in the execution of the two managers' duties as employees of Assicurazioni Generali.

In particular, Assicurazioni Generali's legal action against Mr Perissinotto and Mr Agrusti is grounded on alleged internal governance irregularities in relation to some alternative investments carried out in the past with financial company Finanziaria Internazionale and with private equity fund Vei Capital (controlled by Palladio Finanziaria).

This legal action is of particular relevance since it has been started by Assicurazioni Generali following a specific input made by IVASS to assess the possibility of legal actions against the former managers and reconsider the adequacy of the termination agreements reached with the same.


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