Updated at 1 p.m. ET
(Bloomberg) – Alliant Insurance Services Inc. lost its bid to buy Wells Fargo & Co.'s insurance business but sought to steal its rival's employees anyway, according to a lawsuit filed Thursday in Delaware.
Wells Fargo Insurance Services alleges Alliant has been trying to hire top sales executives in 10 U.S. cities from Atlanta to Dallas to Sacramento, in some cases using senior executives to personally call Wells Fargo salesmen. Information Alliant used was included in confidential deal documents it received as a potential buyer for the company, Wells Fargo said.
Related: Privately held brokers succeeding in agency M&A
|'Agressive compaign'
“Alliant commenced an aggressive campaign to solicit WFIS's sales executives to leave their employment with WFIS and to accept employment with Alliant,” Wells Fargo said in the complaint filed in Delaware Chancery Court. Wells Fargo called Alliant a “persistent and overreaching competitor.”
Lynda Lane, an Alliant spokeswoman, didn't immediately return messages seeking comment.
Last month, Alliant hired one executive vice president who had national sales responsibilities, Wells Fargo said without naming the person. That manager, Wells Fargo alleges, is using information he had about other sales staff to recruit them to Alliant, in violation of a contract he had with his former employer.
Alliant had emerged as the lead bidder on the insurance business in June, according to people familiar with the matter, and a deal that would have made it the fifth-largest insurance broker in the U.S. The company ultimately lost the bidding to USI Insurance Services.
|Confidentiality agreement runs through 2018
During the evaluation process, Wells Fargo said Alliant had access to deal documents that included lists of top-producing sales employees by office. The information was covered by a confidentiality agreement that runs through Nov. 1, 2018, and blocks Alliant from using it for anything other than evaluating a purchase of the insurance unit, Wells Fargo said.
Wells Fargo, the largest U.S. mortgage lender, has been narrowing its focus on banking. Chief Executive Officer Tim Sloan said this month the company is examining all of its units to possibly exit ones deemed outside of core operations. Last year, Wells Fargo sold a crop insurance business to Zurich Insurance Group AG.
Brokers like Alliant are are middlemen, who can help commercial clients buy coverage from insurers to guard against risks ranging from weather damage to lawsuits. The companies operate with little debt or capital costs, meaning their employees are often their most valuable assets, especially when they have deep industry ties or specialized expertise.
The case is Wells Fargo Insurance Services USA Inc. v. Alliant Insurance Services Inc., 2017-0540, Delaware Chancery Court (Wilmington).
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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