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Arch, managers can't use Gen Re info


STAMFORD, Conn.--Arch Capital Group Ltd. and four former managers of General Reinsurance Corp. who joined Arch have agreed not to use Gen Re trade secrets and client information, pending a trial over a Gen Re lawsuit against the parties.

The order, which a Connecticut Superior Court judge approved Tuesday, replaces an earlier restraining order granted in May after Gen Re filed suit against Bermuda-based Arch and employees who had formerly worked in Gen Re's facultative reinsurance department. It is expected to remain place until a trial slated for September.

According to the order, to which all parties agreed, Arch and the other defendants are barred from utilizing or divulging any of Gen Re's trade secrets, proprietary business or marketing strategies and proprietary client information, among other things. The defendants must develop their own independent underwriting guidelines and assess risk independently of information derived directly from Gen Re, the extended order says.

In its original complaint, Gen Re had alleged that former managers Jennifer Apgar, Philip Augur, Steven Franklin and Kenneth Vivian "plotted to sell to the highest bidder the Gen Re business for which they were responsible," and in April orchestrated an "en masse departure" that included 26 other Gen Re employees (BI, May 28).

Arch "aided and abetted their breaches of fiduciary duty in order to enter a business in which they had never competed," the suit said.

Arch meanwhile argued that the individuals who parted from Gen Re to join Arch did so without removing or retaining any documents or materials related to their work at Gen Re."They took no materials that contain, refer to or reflect any purported Gen Re 'trade secrets' or other proprietary information," Arch said in court documents opposing the temporary restraining order. Further, Arch said, the defendants--despite never having been "asked by Gen Re to sign covenants not to compete, agreements not to solicit its customers or employees, or any other such restrictive covenants"--never reached out to their former colleagues, who "had long been disgruntled with the Gen Re environment."

"We are very pleased with the outcome of yesterday's hearing. The court will continue to prohibit Arch from using Gen Re's confidential information," said Damon Vocke, general counsel for General Re in Stamford.

"We are pleased that the TRO will be lifted shortly and that we have reached an agreement that allows Arch to resume offering a full range of products to all clients," Louis T. Petrillo, president and general counsel of Arch Capital Services Inc., said in a statement.