8.3.1 Concluding observations

If the question whether it is für to grant the minority shareholder an exit right is answered affirmatively, the following question should be onder what conditions this exit right should be exerted.

As a means of protection, the exit right is not very effective when the exit requires a costly and time-consuming process (§ 2.2.3.5). Therefore, exit rights should provide an efficient exit, but without losing sight of the interests of all parties involved. Sufficient care has to be taken to protect the interests of the party providing the financial compensation for the loss of the shares.

Furthermore, an exit right is not very effective when the exit right does not provide for an adequate financial compensation for the loss of the shares. As a starting point, the rule must be adhered to that compensation should equal the value of the shares in the economic market. This is the value of the shares in the economic market without a minority discount. This rule should apply with respect to the exit proceedings (§ 6.7.3), and with respect to the appraisal rights (§ 7.2.7, § 7.3.7 en § 7.4.8).

In the exit proceedings it is pos sible to invoke valuation clauses included in the articles of association or in an agreement, unless these valuation clauses result in a manifestly unreasonable price (§ 6.4.2.5). When addressing the question of whether a valuation clause is manifestly unreasonable the following must be taken into regard. Financial compensation that does not equal the value of the shares in the economie market and the application of a minority discount provides the majority shareholder with an incentive to provoke the exit of a minority shareholder.1 The greater the difference between the actual value of the shares and the price based on the articles of association or an agreement, the stronger the incentive will be. In my view, if there is a considerable difference the court should not hesitate to conclude that the valuation clause leads to a manifestly unreasonable price.

Adequate financial compensation means that, as a tule, the date of the actual transfer of the shares is taken as the valuation date. This is also known as the do ut des principle or the principle of reciprocity. This principle is applied in the exit proceedings (§ 6.7.2), but must also be applied with respect to the appraisal rights (See inter alia § 7.4.8).

In the case of prejudice to the interests of the minority shareholder, the exit right is more effective as a measure of protection if the exit right also affords compensation to the minority shareholder for damages to his shares. Art. 2:343 paragraph 4 DCC now provides for this option by allowing the court the discretion to increase the price of the shares on a für basis. Because of this für price increase, there is no longer any need for a claim onder tort for compensation of reflective loss, if possible at all. Moreover, in the event that the minority shareholder wishes to exit the company there is no longer any need for the introduction of a derivative action. After all, a calculating minority shareholder often will not choose a roundabout route and will not first start a derivative claim and subsequently start exit proceedings (§ 6.7.4). This für and practical solution is also found in English law (§ 3.3.12).

When increasing the financial compensation because of reflective loss, a flexible date can be of help in a practical way (§ 6.7.2). English law contains several helpful examples of the application of a flexible date (§ 3.3.11.5).