6.7.3 Valuation methods

Proceedings for the settlement of disputes never have included any valuation method that must be used by the experts or by the court. The preliminary draft of 2005 contained the phrase that experts have to report about the value of the shares in the economie market.1Moreover, the preliminary draft included the tule that when determining the price after receipt of the experts' report, the court only had to take valuation clauses, stemming from the articles of association or shareholders' agreement into consideration as far as it would be deemed für.2 For the reason that these rules contained in the preliminary draft received negative responses in the public consultation, the legislator took a different view when preparing the legislative proposal. It was considered that the aforementioned rules of the preliminary draft restricted the freedom of parties to create their own rules too much. In the legislative proposal, a shift towards less stringent rules was made.

Nowadays, statute does not prescribe in any way what valuation method or methods experts have to use. As described in § 6.6.9.1, valuation clauses included in the articles of association or a shareholders' agreement have to be taken into regard by the experts, but may be disregarded by the court if application thereof would lead to a manifestly unreasonable price. Since the legislator did not deliberately deny the principle that the shares have to be valued for what they are worth in the economic market, provided that the articles of association or agreements do not deviate from this principle, I assume that stance still must be taken. With Roest and Soerjatin, I agree that reference by the legislator to any principle of valuation would have been helpful.3

In my opinion, it is reasonable to assume that the shares have to be valued as if sold in the economic market, resembling a voluntary sale and purchase. This stance is also taken by Maeijer, Van Solinge and Nieuwe Weme who claim that the idea must be that in the case of a forced transfer of shares, such as in proceedings for the settlement of disputes, the transferor must obtain the same price as if the transfer was voluntary.4 The same view is adhered by the Dutch Supreme Court in the Hoffmann case when referring to the obligation for experts to take into regard valuation clauses contained in the articles of association:

One could object to this view by putting forward that typically there is no economic market for shares in a BV or shares in a closed NV. These shares cannot be freely transferred in an open market and possibly there is no purchaser available for the shares. However, if the price is set below the value of the shares in the economic market, consequently, the defendant is in a more favourable position than if he acquires the shares voluntarily. Conversely, the claimant is not put in a more favourable position than he would be in when transferring his shares voluntarily.

As appears from case law, the value of the shares in the economic market is calculated pro rata parte to the value of the company in the economic market.6 This approach can be based on Art. 2:201 paragraph 1 DCC. This provision generally applicable to BVs states that unless otherwise is provided in the articles of association, all shares shall rank pari passu in proportion to their amount. This approach neutralizes the effect of control within the company on the value of the shares. Regardless whether it concerns a majority stake or a minority stake, in proportion shareholders have equal rights. Neither a minority discount nor a nuisance value of a minority stake is taken into account. Moreover, for the determination of the value of the shares, the fact that they are not easily transferable should be disregarded. This view is recently confirmed by the OK in the Hooymans case. In this case, the OK finnly put forward that in exit proceedings neither a minority discount nor an illiquidity discount should be applied.7

Even so, the value of the shares in the economic market or the value of the company in the economic market does not concern a valuation method as such. In practice, various valuation methods are used for valuation of shares in closed companies. In this respect, I refer to a case dealt with in a totally different area of law, the marital divorce case Zeevisser. In this case, the Dutch Supreme Court held that there is no general valuation method for the determination of the price of shares for which no liquid market exists. The HR held that valuation of these shares depends on the circumstances of the case.8

General rules on the valuation of shares are hard to give. Depending on the circumstances of the case, experts use various valuations methods. Valuation methods that are often applied consider the following: