Shareholders’ agreement: Sidelining the company?
Shareholders’ agreements and the rights that the different parties can derive from this are often the reason for legal proceedings. The District Court of Amsterdam recently issued a ruling in a case where a company had a dispute with its minority shareholders. This case shows the importance for a company to be included as a party in a shareholders’ agreement. The company thought it was able to derive rights from the shareholders’ agreement, despite the fact it was not a party to this agreement. The District Court ruled otherwise.
Sale of shares by minority shareholders
Minority shareholders of a company active in the processing of and trading in agricultural products intended to sell a part of their shares. However, they did not agree on the value of their shares. The shareholders’ agreement required them to appoint an expert through an independent arbitration institute in the event of a dispute about the price of the shares.
Influence by the company
It was important for the company that the value of the shares would be set in conformity with the market, because the company could be obligated to take over the shares at some point. In addition, the agreement stipulated that the costs of the expert would have to be paid by the company. So the company had every interest in influencing the appointment of the expert. Because of that reason, it tried to exert this influence invoking the shareholders’ agreement in preliminary relief proceedings.
The shareholders’ agreement
The District Court believed that the company cannot rely on the shareholders’ agreement and therefore cannot exercise any influence on the appointment of the expert. The reason for this is that the company was not a party to the shareholders’ agreement. Only the minority shareholders involved in the agreement can rely on this and can initiate proceedings about this. The fact that the company does have (financial) obligations from the agreement did not make a difference, according to the District Court.
Company as contractual party
The above-mentioned shows that it is very important for a company that to be listed in a shareholders’ agreement as a contractual party. This prevents that the company is faced with surprises that it cannot influence and which literally sidelines the company.
Please contact Fruytier Lawyers in Business for all your questions and help with drafting a solid shareholders’ agreement.