Good leaver, bad deal: why precise shareholder agreement clauses are essential

Good leaver, bad deal: the price of imprecise agreements

A shareholder who leaves a company for non-attributable reasons — the so-called 'good leaver' scenario — generally assumes they will receive fair market value for their shares. But what if the shareholders' agreement is silent or unclear on this point? The District Court of Amsterdam demonstrated on 15 January 2025 (ECLI:NL:RBAMS:2025:676) that commercial parties are held strictly to the text of their agreement — even when this leads to an unfavourable outcome.

Good leavers and bad leavers: the background

Shareholders' agreements commonly include a transfer obligation: under certain circumstances, a shareholder is required to offer their shares to the company or fellow shareholders.

A traditional distinction is made between:

• Good leavers: shareholders who depart for non-attributable reasons (death, voluntary resignation, incapacity). They typically receive the fair market value of their shares.
• Bad leavers: shareholders who depart due to culpable conduct (fraud, breach of contract). They typically receive only the nominal value — usually a fraction of actual value.

The distinction carries major financial consequences. This is precisely why the drafting of leaver provisions is critically important in practice.

The facts: a director departs, a dispute arises

A BV with three shareholder-directors enters into a shareholders' agreement. The management agreement with one of the directors is terminated. Under Article 8(3) of the shareholders' agreement, he is required to offer his shares for transfer.

The heart of the dispute lies in Article 9 of the agreement:

"In all cases referred to in Article 8(3), the price of the Shares shall be determined at the nominal value of the relevant Shares."

The heading above this article reads: 'Valuation upon good leave and bad leave'.

The former director argues that as a good leaver he is entitled to fair market value. The fellow shareholders hold him to the nominal value of €1.00 per share — for 15 shares, a total of just €15.

The judgment: the text is clear

The District Court of Amsterdam rules in favour of the fellow shareholders. The reasoning:

1. Article 8(3) covers all termination scenarios — no exception was made for good leavers.
2. The heading of Article 9 explicitly mentions 'good leave and bad leave' — this shows the nominal value rule applies to both situations.
3. The agreement contains no definition of 'good leaver' — indicating that the parties did not intend a different pricing mechanism.
4. Commercial parties are presumed to know the content of their agreement. The former director could have sought legal advice when entering into the agreement; the fact that he did not is his own responsibility.

The defence that fair market value for good leavers is standard market practice is rejected: the fact that other agreements are drafted this way does not mean there is an error or a gap in this agreement.

Additional disputes

Beyond the valuation, further issues arose:

• Blocking arrangement and notarial deed: the defendant disputed having previously consented to the transfer of shares by the brothers to their personal holding companies. The court rules that the notarial deed constitutes conclusive evidence of the consent given; counter-evidence was not provided.
• Trademark registrations: the defendant had registered trademarks in his own name that belonged to the company. The court orders him to transfer these registrations.
• Non-compete and non-solicitation clauses: claims on these points are partially granted.

What does this mean in practice?

1. Draft leaver provisions explicitly and unambiguously

If you as a good leaver want to be entitled to fair market value for your shares, this must be explicitly stated in the agreement. Ensure:

• A clear definition of 'good leaver' and 'bad leaver'.
• A separate valuation mechanism per scenario: market value for good leavers, nominal value (or a percentage thereof) for bad leavers.
• Optionally, an expert determination clause for valuation upon good leave.

2. Do not rely on 'market practice'

The fact that certain provisions are common in the market does not mean they automatically apply to your agreement. Courts look primarily at the text of the agreement and the intention of the parties as it appears from that text.

3. Seek legal advice when entering into the agreement

The court explicitly takes into account that the former director did not engage an adviser when concluding the agreement. With shareholders' agreements — which can have far-reaching financial consequences — legal advice is not a luxury but a necessity.

4. Pay attention to trademark registrations and IP upon shareholder changes

This case also shows that trademark registrations and intellectual property rights can be a standalone conflict point when a shareholder-director departs. Ensure IP rights are held in the name of the company and record this in the shareholders' agreement.

5. Notarial deeds constitute conclusive evidence

A notarial deed is a powerful evidential instrument. If you give consent by way of a notarial deed, this is in principle binding. Providing counter-evidence is extremely difficult.

Conclusion

The ruling of the District Court of Amsterdam is a sharp reminder: in a shareholders' agreement, every sentence counts. A shareholder who wishes to receive fair market value as a good leaver must have this in black and white. Ambiguous or incomplete provisions are interpreted on the basis of the text — and that interpretation can be very disadvantageous. Always seek the assistance of a specialist lawyer when drafting or reviewing a shareholders' agreement.

Ruling

This blog post is based on ECLI:NL:RBAMS:2025:676, judgment of the District Court of Amsterdam of 15 January 2025.