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    Failed attempt to set aside transfer restriction clauses in articles of association

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  • The Dutch court has recently passed a first judgment on the basis of section 2:195 par. 7 of the Dutch Civil Code (District Court Midden-Nederland, October 16, 2013).

    Pursuant to this section 2:195, which has come into force on October 1, 2012 as part of the Act on simplification and flexibilisation of Dutch law governing private limited liability companies (Flex BV), the court may set aside transfer restriction clauses as provided for by the articles of association of a BV or by law, in whole or in part, if so requested by, inter alia, a trustee in bankruptcy (curator) or a pledgee. The request may only be awarded by the court if the interests of the petitioner specifically so require and the interests of others involved will not be prejudiced disproportionately as a result. 

    One of the shareholders of the BV went into bankruptcy. The articles of association of the BV required this shareholder to offer its shares to a person to be appointed by the general meeting and provided that, failing consent, the purchase price would be determined by one or more independent experts. The trustee in bankruptcy of this shareholder requested the court to set those provisions aside to take benefit from the shareholders' agreement, which provided for a pre-agreed price in certain exit events, and thus avoid the delay and costs which would be caused by the appointment of an independent expert.

    In this specific case, the court denied the request of the trustee on the basis that the relevant circumstances at stake did not qualify as such exit event(s) under the shareholders' agreement and, consequently, the trustee would not be able to take the benefit of such provisions under the shareholders' agreement if the transfer restrictions in the articles would indeed be set aside by the court. Moreover, the court considered that, even if the transfer restrictions under the articles would be set aside, the shareholder in bankruptcy was required to offer its shares to its fellow shareholders pursuant to the terms of the shareholders' agreement. In such event, failing any transfer restrictions under the articles (if set aside), the transfer restrictions provided under law would apply, meaning that the price should be determined by independent experts under section 2:195 par. 1 DCC and no petition was made to set aside this transfer restriction under law as well.

    This case demonstrates that the provisions of a shareholders' agreement are taken into account by the court when weighing interests following a request under section 2:195 par. 7 DCC and, also, that the petitioner should carefully consider both the transfer restrictions under the articles and under law.

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