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Agrokor files action to annul disputable annex to the employment contracts of former members of the Management Board

At the Commercial Court in Zagreb, the Extraordinary Commissioner Ante Ramljak filed actions for annulment of annex to the employment contracts of the three members of the former Management Board of Agrokor – Ivica Todorić, Ante Todorić and Ivan Crnjac – due to potentially detrimental effect of the annex on the future operation of the company.

The disputable annex no. 5 of the employment contracts of managers in question was signed on 31 March 2017, ten days prior to the initiation of the extraordinary administration procedure in Agrokor d.d., and the potential realisation of the rights arising from it might bring significant material damage to the company. The annex stipulates that Agrokor will bear all damages the former Management Board members might suffer due to potential court, administrative, arbitration or other proceedings initiated against them for actions taken and/or for failing to take actions as managers in their capacity of the members of the Management Board of Agrokor. The annex provides that Agrokor should bear the cost of all representation of former Management Board members, including attorney cost, cost of legal protection, expert consultants, including travel expenses and other, all until a final court decision establishes that they acted contrary to the obligation of managing business, regardless of the fact and the manner in which the employment contracts end.

By initiating the procedure of extraordinary administration of Agrokor on 10 April of this year, mandates of all the members of the former Management Board of Agrokor have ended, and consequently employment contracts of the previously mentioned three members of the Board terminated, without the company incurring any cost. With the exception of Ivica Todorić, Ante Todorić and Ivan Crnjac, no other member of either the Management or the Supervisory Board at the moment of initiation of the procedure of extraordinary administration held a valid annex of the nature described. All other members of the Management and of the Supervisory Boards, except for the former president of the Supervisory Board, Ivan Todorić, signed mutual termination agreements with the company whereby they relinquished material rights they have had claim to pursuant to their employment contracts. Ivan Todorić’s contract was terminated unilaterally.