One of the conditions for the application of the annual accounts group exemption as provided for by section 2:403 DCC, exempting a group company (the Exempted Company), inter alia, from the obligation to publish its own annual accounts, is that the group company (Holding) consolidating the Exempted Company's accounts assumes joint and several liability arising from legal acts entered into by the Exempted Company (403-statement).
A 403-statement can be withdrawn anytime. However, such withdrawal does not terminate liability arising from legal acts entered into by the Exempted Company prior to such withdrawal, whether or not such liabilities have matured (i.e. including future obligations under existing agreements). Such remaining liability can only be terminated if the Exempted Company is no longer part of its group and requires Holding to publish such intention of termination in a national newspaper, allowing creditors of the Exempted Company to object with the court within a 2 months period thereafter.
Each creditor of the Exempted Company may require security for its claims covered by Holding's remaining liability once terminated, unless sufficient comfort exists given the financial condition of the Exempted Company or otherwise. The burden of proof of such exception rests with Holding.
In case of a contested claim, the Rotterdam District Court has ruled in its judgment of 29 September 2015 (ECLI:NL:RBROT:2015:7610) that, by analogy with attachment law (beslagrecht), in order for the creditor's objection against withdrawal to be upheld, it is enough for the claim to be 'sufficiently plausible'. According to the court, this test was met since the claim was based on a contractual relationship, while legal proceedings in respect of the claim were pending. No assessment of the contested claim on merits is required for the purpose of assessing a creditor's an objection under section 2:404 DCC.
In the event of a sale of an Exempted Company, Holding will generally stipulate from the purchaser to provide any security as may be required under section 2:404 DCC and to indemnify and hold Holding harmless from any and all claims under the 403-statement as withdrawn in respect of the Exempted Company.
For more information please contact Johan Boeren.