7.8 Conclusion

In the event of a conversion of a BV into an association, a cooperative, a mutual insurance society, or a foundation, a shareholder who has not consented to the conversion has the right to exit and is entitled to indemnification. The obligation to provide indemnification rests on the shoulders of the legai entity involved. When the appraisal right is invoked, an independent expert appointed by the court, and not the court itself, determines the amount of indemnification. It does not seem likely that Artt. 194-200 RV applies to the independent expert. It is likely that the allocation of the determination of the indemnification at the independent expert is in conflict with Art. 6 ECHR. I recommend allocating the determination of the indemnification at the court. A shareholder of a BV that converts into an NV has no appraisal right.

A shareholder who has not consented to the conversion of a BV into an OVR or CVR has the right to exit and is entitled to indemnification. In contrast to the appraisal right in Book 2 DCC, when the appraisal right of Book 7 DCC is invoked the BV has to provide indemnification before conversion can take place. I recommend detaching the determination of the indemnification from the conversion process, provided that the OVR takes over the obligation to indemnify the former shareholder. This will speed up the conversion process.

In the event of a cross-border merger between a Dutch disappearing BV and a foreign European limited liability company, a shareholder who voted against the resolution for the cross-border merger has the right to exit and is entitled to indemnification. Other non-consenting shareholders are not entitled to the appraisal right. I recommend introducing the rule that holders of shares without voting rights are entitled to vote in the case of a resolution for cross-border merger, so that they can be able to exercise the appraisal right.

The rationale of the appraisal right in the situation of a cross-border merger is that a minority shareholder cannot be forced to remain in a company that is governed by another legal system that probably provides for different rules of minority shareholder protection. The appraisal right seems to be a justified restriction on the freedom of establishment as embodied in Art. 49 and Art. 54 TFEU. Art. 2:333i paragraph 4 DCC requires clarification by the Dutch legislator.

The Dutch appraisal rights can be seen as a trade-off: the majority shareholder is allowed to proceed with a fimdamental change of the legal entity and the minority shareholder is entitled to exit. There are some matters that all current Dutch appraisal rights have in common All appraisal rights are available in the situation of a fundamental change position of rights and obligations. The very nature of the appraisal right as means to protect minority shareholders entails that this right has a mandatory character. A further matter is the valuation of the shares. There is no convincing argument for using the liquidation value as a yardstick when assessing the indemnification. It is most reasonable to take the value in the economie market of the shares as a point of departure. It is most appropriate to link the value of the shares to the day the shares cease to exist. This will either be the day of conversion of the legal entity or the day of cross-border merger.

Whereas the enforcement of the appraisal rights as well as the valuation of the shares raises comparable issues, I recommend arranging these issues in a single set of proceedings. There is no good reason for the creation of separate sets of proceedings. The German Act on Appraisal Proceedings can be used as an example for such proceedings.1 Similar to the German proceedings, an amicable settlement with respect to the price of the shares must be encouraged by the court.

In all situations of a cross-border transformation operation, minority shareholders will be confronted with a fundamentally different legal system, which does not necessarily afford them the same level of protection offered in the situation of an intemal transformation. Moreover, the minority shareholders may not be familiar with the rules that govern the foreign legal entity. This justifies the introduction of rules protecting the minority shareholders. In my opinion, there is no justification in treating minority shareholders in a different way in situations of a cross-border merger, a cross-border conversion, or a cross-border demerger. In all these situations, a minority shareholder who votes against the cross-border transformation has to be offered an appraisal right. This difference in treatment of minority shareholders between national and cross-border transformation is justified.

If, in the future, Dutch law were to provide for the merger and demerger of several discerned types of legal entities, similar to Germany, it is recommended to make available appraisal rights to shareholders who do not consent to such a merger or demerger.2

An appraisal right as a für counterpart of the squeeze-out proceedings is reasonable and strengthens the proportionality of the squeeze-out proceedings. Moreover, it offers protection to minority shareholders who cannot appeal on the inquiry proceedings. Therefore, I recommend the introduction of an appraisal right in the event that a shareholder, with or without one or more group companies, holds at least 95% of the issued capital of the company for his own account.