SORGEM Evaluation advised the management company of an FPCI and its directors, who were facing proceedings before the Paris Commercial Court and who secured a favourable judgement

In 2011, our client had set up an FCPR (which has since become an FPCI) in which unit holders had invested a total of 45 million euros. In the summer of 2014, partly due to the fund’s poor performance and management deemed unsatisfactory, the investors dismissed the management company and appointed a new manager. At the end of 2015, the new manager and the fund’s unit-holders brought a liability claim against the original management company and its directors.

The allegations against the management company centred on a failure to exercise due diligence both before and after the fund’s investments, and the withholding of information from investors. The allegations against the directors were the same, but were alleged to have been committed intentionally, thereby justifying their personal liability.

In a judgement of 13 December 2018 (which is still subject to appeal), the Paris Commercial Court found the management company and its directors not liable and dismissed all claims brought against the defendants, including our clients.