6.6.7 Lockup during proceedings

During the exit proceedings, a claimant is free to transfer or pledge his shares, or vest a usufruct on his shares. In this respect the position of the claimant differs from that of the defendant in the exit proceedings. A defendant cannot dispose of (vervreemden) his shares during the exit proceedings without the consent of the claimant.1 It makes no difference if the articles of association do not provide for restrictions on the transfer of shares. The requirement of lockup of shares applies to the defendant in person and not to his capacity of shareholder.2

The period in which the shares cannot be disposed of starts on the day of service of the writ of summons (dagvaarding) to the defendant and ends on the day on which the judgment becomes irrevocable. In addition to the prohibition to dispose of the shares, the defendant can neither pledge his shares nor vest a right of usufruct with respect to the shares without the consent of the claimant.

As far as the lock-up regards the transfer of shares or pledge of shares by the defendant, this makes sense as otherwise a defendant could frustrate the exit proceedings by transferring his shares to someone not involved in the proceedings or could create the risk that the shares must be transferred due to execution of the pledge. Contrary to the literai wording of statute, I do not see any reason for prohibiting a defendant in the exit proceedings to vest a right of usufruct on the shares, provided that the usufructee is not entitled to dispose of the shares pursuant to Art. 3:215 DCC. In that particular situation, there is no risk of frustration of the exit proceedings.

The defendant is entitled to request the claimant for permission of the transfer or pledge of the shares or the vesting of a usufruct on the shares. If the claimant refuses permission, a defendant can request the court for permission. This is reasonable, as the defendant could have invested his whole fortune in the company and may get into trouble as a consequence of the lockup:

Such request can be done by incidental motion (incidentele conclusie) during exit proceedings.4

In order to succeed in the request for permission, the defendant must demonstrate to the court his interest in the transfer, pledge or vesting of a usufruct and must explain why it would be reasonable to grant the consent. It is in the discretion of the court is to give permission or not.5 But even if the shareholder has a reasonable interest, the court must decline the request for permission if the relationship between the defendant and the prospective transferee appears to be too close, as a result of which the risk crises that the intended shareholder continues the dispute:

In case the claimant or the court grants permission for the transfer of shares, transfer restriction clauses included in the articles of association have to be applied.

What happens if a defendant transfer or pledges the shares or vests a usufruct on the shares without permission of the claimant or of the court? As Art. 2:338 paragraph 1 DCC includes the wording cannot (kan niet), statute prohibits the creation of singular title (bijzondere titel) that forms legal basis of a transfer if permission is not granted. Consequently, any intended disposal, pledge or vesting of a usufruct remains without legal effect (goederenrechtelijk gevolg) if permission is not granted.7

In the legislative history there has been debate about whether the company should be obliged to publish a notice with the trade register, stating that exit proceedings are pending. The advantage of this tule would be that it would be publicly known that any transfer of shares without permission of the claimant or the court would remain without legal effect.8 The legislator did not introduce this obligation, as under former BV law, BVs were obliged to have transfer restriction clauses. Before application of the transfer restriction clauses, the prospective transferee would be known with exit proceedings being pending. Nonetheless, under former BV law it was not compulsory to restrict the transfer of shares to a husband, a registered partner (geregistreerde partner), certain close family members, co-shareholders or the company itself. At that time, the legislator was of the opinion that this limited group would be known with the fact the exit proceedings are pending, so publicity would not be necessary.9

In my view, the argument of the legislator no longer applies. Nowadays, BVs are no longer obliged to include a transfer restriction clause in the articles of association. The idea of publicity of pending exit proceedings appeals to me. The rule of publicity could offer protection to prospective transferee. These third parties involved in a transfer process could and civil-law notaries involved in a transfer process should notice this information in the trade register. Filing of a notice with the trade register would not take much effort and taking into consideration that the exit proceedings are public anyhow, publication with the trade register would not cause much additional harm. Therefore, I plead for introduction of the obligation for the company to file notice of pending exit proceedings with the trade register.10

Statute does not prohibit the transfer of the shares under universal title (algemene titel) during proceedings for settlement of disputes, leaving space for transfer of shares by legal merger and legal demerger. Statute does not prohibit either that the beneficial interest (economische gerechtigdheid) to the shares is disposed of, for instance by way of issuing depository receipt for shares. However, transfer of the beneficial interest of shares could lead to the conclusion that the shareholder has abused his right (misbruik van recht).

Parties in the proceedings may agree on the transfer of the shares at any stage of the proceedings, by way of amicable settlement. Such agreement implies consent of the claimant under the expulsion proceedings respectively the exit proceedings. Consequently, the proceedings will end. In the absence of an agreement, the following rules apply.