5.8 Conclusion

The winding-up remedy is one of the final orders that can be provided by the OK onder the inquiry proceedings. Like its German and English counterparts, the Dutch winding-up remedy is seldom applied and because of its harsh consequences it merely plays a role as an ultimum remedium. The order should only be given when less far-reaching measures cannot restore sound relationships within the company. In particular it may offer a way out when a deadlock in the decision-making process is present, which paralyzes the functioning of the company. The interests of shareholders and employees in general as well as the public interest may block application of the winding-up remedy.

Comparable to the German winding-up remedy, the Dutch inquiry proceedings are only available to shareholders holding at least 10% of the shares.1 In contrast with the German winding-up remedy and Dutch inquiry proceedings, the English winding-up remedy does not have this 10% threshold, but requires a tangible financial interest in the winding-up of the company. A debate about lowering the threshold from the perspective of the winding-up order is perhaps academie, as the winding-up order is mainly directed by the court if 50% shareholders are stuck in a deadlock. I do not favour introducing a tangible financial interest requirement, because even in the absence of a tangible financial interest a shareholder may have a justified interest in a final exit.

In contrast to the German and the English winding-up remedy, in principle the Dutch inquiry proceedings do not provide a remedy in case the objects of the company can no longer be achieved. Whereas the general meeting is authorized to amend the articles of association and to change the objects clause, I have no difficulties with this difference. Nonetheless, I assume that if a deadlock arises, because the shareholders cannot come to a resolution regarding the amendment of the articles of association, the exit proceedings of the inquiry proceedings may provide a solution.

Case law shows that the winding-up remedy is applied only in exceptional circumstances. The remedy is mostly applied in situations where two 50% shareholders can no longer collaborate with each other, resulting into a final deadlock. In almost all winding-up cases the company involved has no or a small number of employees, the business of the company already ceased, or liquidation of the company had effectively already started.

Under current law the OK cannot reverse its order to wind up the company. For practical reasons, but only in exceptional circumstances, I recommend introducing this option. Such reversal should be prudently applied and especially interests of shareholders and employees as well as the public interest have to be taken into consideration.

The OK is not allowed to order the transfer of the shares of one of the shareholders in order to resolve a dispute within the company. An order for the transfer of the shares can only be obtained onder the exit proceedings or the expulsion proceedings. Art. 2:356 DCC includes a comprehensive list of orders and a transfer order is not included in this article. This is remarkable as the winding-up remedy represents a more far-reaching measure than the order for transfer of shares. Both orders have the consequence that a shareholder is deprived of his shares and receives consideration in substitution thereof @@2 Moreover, both the exit proceedings and the winding-up remedy facilitate the interest of the shareholder wishing to exit and do not necessarily facilitate the interest of the company. Therefore, from this perspective the winding-up remedy better fits in with the exit proceedings than with the inquiry proceedings. Nonetheless, I prefer to keep the winding-up order to remain available within the inquiry proceedings, because a court supervised investigation into the policy of the company may safeguard that the winding-up order is not rashly applied.

The inquiry proceedings are quite successful means to press parties to conclude an amicable settlement of their dispute in a relatively short period. Parties may fear an inquiry into the policy of the company and may fear immediate remedies. Consequently, the inquiry proceedings are an attractive alternative for statutory exit proceedings. Nonetheless, the conclusion of an amicable settlement ultimately depends on the voluntary cooperation of the disputing shareholders. The OK is not entitled to force a share transfer. It is für to submit that not all cases investigated were quickly solved. Some of the cases show that reaching and executing an amicable settlement may take several years.

The order for a dispute demerger may present an attractive alternative to the order for winding-up of the company, but only if the company is suitable for a legal demerger and if the company has only a few shareholders. Implementation of the order for dispute demerger as one of the final remedies in the inquiry proceedings is recommended, but requires a deliberate reflection on which requirements stemming from the general rules on demerger should apply and which should remain inapplicable.