PAL-V Case: Seizure Lifted Thanks to a Strong Legal Strategy

PAL-V, the global market leader in FlyDrive solutions and the Dutch innovator behind the flying car (Personal Air and Land Vehicle), found itself in a difficult position. A former employee had all of the company’s bank accounts frozen, effectively bringing operations to a standstill. No salaries, no supplier invoices, and no ability to pay taxes meant a standstill. Through summary proceedings and strong legal arguments, we were able to free PAL-V from this impasse.

Background

PAL-V was founded in 2008 with an ambitious goal: to develop a practical flying car. For years, the company has been investing in R&D, prototypes, and customer acquisition. With more than 50 pre-orders and the promise that it is “currently on the verge of delivering,” success finally seems within reach.

The Problem

A former employee, who worked as a manager for investor and customer acquisition between 2014 and 2018, placed a lien on PAL-V’s bank accounts. It is important to note that, regardless of the amount of the claims, a lien freezes the entire balance in a bank account, even if that balance is much higher than the total amount of the claims combined.

The man is claiming:

• Back pay
• Reimbursement of expenses
• Payment of “sabu’s” (bonus entitlements) totaling over €1.3 million

This garnishment has brought the company to a complete financial standstill:

• No salaries for employees
• No vacation pay
• No payments to suppliers

PAL-V literally came to a standstill for a moment. And a trial on the merits of the claim is not scheduled until the fall.

The preliminary injunction proceedings

Fruytier immediately filed a motion for a preliminary injunction with the preliminary relief judge in Breda, arguing that the attachment should be lifted.

The key arguments

• The Company’s Interests vs. the Former Manager’s Interests
  – PAL-V is in a crisis situation due to the attachment, as it could no longer meet its essential operational obligations as a result of the attachment
  – The interests of the company, its employees, and its customers outweigh the former manager’s claim
• Preliminary invalidity of the claim for payment of the bonus units
  – Legal analysis shows that the former manager most likely has no basis for his claim for immediate payment of his bonus units
  – This undermines the need for security through seizure
• Bank guarantee as an alternative
  – Fruytier previously secured a bank guarantee of €70,000 for PAL-V regarding the claim for back pay and reimbursement of expenses
  – This provides sufficient security for these claimsproblem

The outcome

The preliminary relief judge in Breda has ordered the attachment to be lifted. The judge found the claim to be summarily unfounded and recognized that the interests of the company, its employees, and its customers outweigh the claim of the former manager acting under the name Think Beyond.

In his ruling, the judge states:

“From the foregoing, it follows that the factual basis of Think Beyond’s claim regarding payment of SABUs is prima facie unsubstantiated. Think Beyond cannot currently assert a right to payment of the amount it has estimated or any other amount in respect of SABUs.”

and

“Because the company is currently unable to pay its bills, the company’s interest in the lifting of the attachments outweighs the former manager’s interest in having security for his claim.”

The results

• Bank accounts unfrozen – PAL-V has regained access to its bank accounts
• Operations restored – Salaries, vacation pay, and supplier payments can resume

Lessons for Other Innovative Companies

This case illustrates three key points for innovative companies:

• Timing is everything – In a crisis situation, an expedited proceeding (summary judgment) can be essential to ensure survival, while the substantive issue waits in the background
• Legal reasoning matters – The difference lies not in the facts, but in how those facts are framed legally (importance, likelihood, proportionality)
• Creative solutions work – The bank guarantee is the moment when the judge can say: “You don’t need a seizure order, because the risk is covered”

About Fruytier

For 50 years, Fruytier Lawyers in Business has been the legal partner of choice for ambitious entrepreneurs. Our attorneys combine high-quality legal advice with an entrepreneurial mindset that aligns with your ambitions. No legal jargon or unnecessary complexity—just clear and practical solutions.