Einde inhoudsopgave
Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/7.2.6
7.2.6 Enforcement
mr. dr. P.P. de Vries, datum 03-05-2010
- Datum
03-05-2010
- Auteur
mr. dr. P.P. de Vries
- JCDI
JCDI:ADS402972:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
See also Handboek (1992), no. 157.
Bundel NV en BV, p. IXt-Art. 71-1 and 2. With respect to legal literature, see Van der Streek (2008), p. 34; Snijder-Kuipers (2010), p. 33.
Parliamentary Papers II 2006/07, 30 929, no. 3 (MvT), p. 18.
See Art. 2:223 DCC for the requirements of convening a general meeting.
Asser/Maeijer 2-111 (2000), no. 549.
Art. 2:181 paragraph 2 DCC.
Art. 2:181 paragraph 3 DCC.
A similar view is taken by Huizink in: Groene Serie Rechtspersonen, 2002, Art. 71, aant. 2.
Art. 2:201a paragraph 5 third sentence DCC (Squeeze-out proceedings); Art. 2:340 paragraph 1 and 2 DCC (Expulsion proceedings) and Art. 2:343 paragraph 2 DCC (Exit proceedings).
Handboek (1992), no. 157: 'Wij zouden willen aannemen, dat de aandeelhouder en de rechtspersoon de vaststelling van de schadeloosstelling kunnen aantasten op de grond dat de schadeloosstelling onredelijk laag respectievelijk onredelijk hoog is. Oordeelt de rechter de vaststelling onredelijk dan kan hij de hoogte bepalen.'
For the proceedings for the settlement of disputes, see Art. 2:339 paragraph 1 DCC. As appears from the legislative history of Art. 2:92a DCC, Artt. 194-200 RV apply in the squeeze-out proceedings, the, see Bundel NV en BV, p. lXx-Art. 92a-3.
Bundel NV en BV, p. IXy-Art. 339-1: 'Het ontwerp van de Commissie Vennootschapsrecht ging ervan uit dat de prijs door de deskundigen zou worden vastgesteld en dus niet door de rechter. Het rechtskarakter van de prijsvaststelling door deskundigen was echter niet duidelijk. Een bezwaar is dan dat een vonnis houdende een bevel tot overdracht moeilijk te executeren is wanneer de prijs van de aandelen niet door de rechter is vastgesteld. Nadere bezinning op dit stelsel heeft tot de conclusie geleid (...) dat de rechter, en niet de deskundigen, de prijs van de aandelen moet vaststellen (...).'
A shareholder must take several steps before he can enforce his appraisal right. The first step, however, is rather passive. In order to qualify for the appraisal right, the shareholder must not consent to the resolution approving the conversion. A shareholder shows his consent of the resolution by voting in favour of it. Furthermore, a shareholder may proclaim his consent of the resolution at a later stage, while statute does not determine a certain moment of consent.1 It is not necessary in order for the appraisal right to be available, that the shareholder concerned has voted against the resolution. This can be derived from the words in Art. 2:181 paragraph 2 DCC: "any shareholder who has not consented". A similar stance is taken in the legislative history of the provision concerned as well as in legal literature.2 The aforementioned view with respect to Art. 2:181 DCC was also taken in the legislative history of the appraisal right in the situation of a cross-border merger.3 Hence, a shareholder who was neither present nor represented at the general meeting, has abstained from voting, or has cast a blank or invalid vote, qualifies for the appraisal right. Consequently, a shareholder without voting rights is entitled to the appraisal right as well.
Further to Art. 2:181 paragraph 2 DCC, after adoption of the resolution for conversion, the BV is required to notify all shareholders qualifying for the appraisal right about their right to indemnification for the loss of their shares. This notice must be given in the same manner as is prescribed for a notice convening the general meeting.4 If the BV fails or refuses to notice the shareholders concerned, one or more shareholder(s) can start interlocutory proceedings in order to force the BV to provide the notice.5 This notice is of importance, as it starts the period in which requests for indemnification can be submitted.
A shareholder who wishes to use his appraisal right must submit a request thereto. Statute prescribes that this request must be in writing. Moreover, this request must be submitted within one month after the BV provided the notice regarding the right to indemnification.6 In my opinion, the request for indemnification does not need to be motivated other than with a reference to the fact that the shareholder neither did nor does consent to the conversion.
A shareholder can only enforce his appraisal right with respect to all of his shares. For the reason that the appraisal right aims to enable a non-consenting shareholder to withdraw from the company, in my view, it is not possible to enforce the appraisal right only with respect to part of the shareholding.
Article 2:181 paragraph 2 DCC clarifies that the obligation to pay the indemnification rests on the shoulders of the BV. Although statute explicitly refers to the company, there is no reason to assume that the obligation does not survive the conversion. After conversion, the obligation still rests on the shoulders of the legai entity. The shareholders or management board of the BV initiating the conversion are not liable with respect to the indemnification.
When a shareholder validly requests the BV to entitle him to his appraisal right, the shareholder and the BV may determine the price to be paid for the shares at mutual consent. If the parties fail to reach agreement, one of the parties may request the District Court to appoint one or more independent experts. If authorization of the court is required for the conversion, i.e. when a BV is converted into an association or a foundation, the District Court handling the authorization is competent to appoint the independent expert(s).7 If authorization is not required, the president (president) in interlocutory proceedings is competent to appoint the independent expert(s). Art. 2:181 paragraph 3 DCC stipulates that Artt. 2:351 and 2:352 DCC apply in both situations.8 These sections confer far-reaching powers on the experts to collect information about the BV, information that is needed for the valuation of the shares. In my opinion, these sections apply by analogy, as it makes sense that statute does not intend to confer competence on the OK as statute expressly gives jurisdiction to other courts.9
Remarkably, Art. 2:181 paragraph 3 DCC stipulates that the price of the shares is to be determined by independent experts, if mutual consent cannot be reached. Consequently, the court does not determine the price of the shares. This is remarkable, as in the exit proceedings, the expulsion proceedings and the squeeze-out proceedings, the price of the shares is determined by the court, regularly based on findings of appointed independent experts.10 The expulsion proceedings and squeeze-out proceedings lead to the expulsion of the shareholder. A parallel can be drawn with the appraisal right. The shareholder who does not consent to the conversion has no other option than to exit. The conversion forces him to break ties with the company.
Van der Grinten argues that when the indemnification that is determined by the experts is unreasonably low or unreasonably high, the shareholder or the BV is allowed lodging a complaint at court. If the court shares the shareholder's opinion, the court has to determine the price of the shares:
"We would like to assume that the shareholder and the legai entity can affect the settlement of the indemnification on the basis that the indemnification is unreasonably low or respectively unreasonably high. If the court decides the assessment to be unreasonable it can determine its amount."11
As statute explicitly refers to the experts appointed for the determination of the price of the shares, it is, in my opinion, unclear upon which ground the competence of the court is based as contended by Van der Grinten.
Furthermore, the position of the independent experts appointed by virtue of Art. 2:181 paragraph 3 DCC is rather unclear. It neither appears from statute nor from legislative history that Artt.194-200 RV apply to these experts. In Artt. 194-200 RV procedural roles for the appointment of experts and their functioning in legal proceedings are found. Experts within the meaning of Artt.194-200 RV are involved in proceedings and are considered as having merely an advisory role. Pursuant to Art. 194 paragraph 2 RV, the expert is ordered to deliver a written report or oral accounts. This written report and these oral accounts are not acknowledged as binding decisions.
In both the squeeze-out proceedings and the proceedings for the settlement of disputes the roles of Artt. 194-200 RV apply.12 In both proceedings, the court may order experts to provide a report regarding the valuation of the shares. What is more, in both proceedings the court determines the price of the shares, after having assessed the valuation report. The tasks of the experts referred to in Art. 2:181 paragraph 3 DCC are much broader and are not performed during legal proceedings and onder court supervision. The duties of these experts not only include the valuation of the shares, but also to provide a binding decision on the valuation of the shares. Therefore, it does not seem likely that Artt. 194-200 RV apply to experts within the meaning of Art. 2:181 paragraph 3 DCC.
The determination of the price of the shares by experts pursuant to Art. 2:181 DCC raises questions. When the proceedings for the settlement of disputes were introduced, the legislator chose to allocate the determination of the price of the shares to the court. The legislator preferred determination of the price by the court, while determination by experts could lead to problems with regard to the execution of the transfer of the shares and with regard to payment of the indemnification:
"The draft of the Company Law Committee assumed that the price would be determined by the experts and therefore not by the court. However, the legal nature of a price settlement by experts was not clear-cut. An objection then is that a judgment carrying an order to transfer would be difficult to execute when the court has not determined the price of the shares. Closer reflection on this system has led to the conclusion (...) that the court, and not the experts, must determine the price of the shares (...)."13
In contrast with the proceedings for the settlement of disputes, in the situation of application of Art. 2:181 DCC the court does not order the transfer of the shares. Such is not necessary as the shares cease to exist by operation of law. However, in line with the cited remarks of the Minister, I suggest that determination of the indemnification by the court prevents problems with regard to the enforcement of the legai entity's obligation to indemnify the former shareholder. Therefore, I recommend adjusting Art. 2:181 DCC to the effect that the indemnification is determined by the court.
In § 2.2.3.2 and § 2.2.3.3, particular attention is paid to the principal question whether determination of the level of compensation by independent experts instead of by the court is appropriate from the perspective of Art. 6 ECHR. In those paragraphs, I elaborated that the determination of the level of compensation by independent experts does not meet the requirements of Art. 6 ECHR.
A comparable view is taken in England by the CLR. In § 3.4.2, I described that the CLR doubts whether the appraisal right of S. 111 IA 1986, which prescribes compulsory arbitration, is compatible with the Human Rights Act 1998.