Track Record: Share Transfer Obligation From Old Shareholders' Agreement Remains Binding After Restructuring

Mr. Vincent Besters represented an entrepreneur in a complex shareholder dispute concerning the continued effect of a shareholders' agreement following a corporate restructuring

In April 2023, the The Hague District Court issued an interlocutory judgment in main proceedings in which mr. V.M. Besters acted as counsel for the claimant: the personal holding company of an entrepreneur who was part of a group of three shareholders in a group active in foundation expertise, risk management and technical services.

What was the case about?

In 2002, the three shareholders had entered into a so-called 'supplementary agreement'. This agreement included, among other things, a compulsory share offer obligation: if a shareholder left employment or was dismissed, he was required to offer his shares to the other shareholders at a price of twice the gross annual profit.

At the end of 2019, one of the three shareholders left the group. At the same time, the entrepreneur — on the advice of his tax adviser — carried out a restructuring. The joint holding company was converted into the entrepreneur's personal holding company, and a new holding company (Ifcon Beheer B.V.) was established to hold the operating subsidiaries.

After the restructuring, the relationship between the two remaining shareholders deteriorated. The entrepreneur moved to part-time work, stepped down as director, and eventually left the group. The other shareholder argued that the entrepreneur was obliged under the supplementary agreement to offer his shares.

The entrepreneur disputed this: he argued that the offer obligation only applied to the old corporate structure and had not automatically transferred to the new structure following the restructuring.

What did the court decide?

The The Hague District Court rejected this defence. On the basis of the supplementary effect of reasonableness and fairness (Section 6:248 of the Dutch Civil Code), the court held that the supplementary agreement also applied in the new structure:

• The restructuring had been set up in mutual agreement and had purely fiscal motives, with no intention of setting aside the offer obligation.
• The mutual relationships and the nature of the cooperation had not substantively changed.
• Allowing the offer obligation to lapse purely on the basis of a structural change would be contrary to reasonableness and fairness.

In this interlocutory judgment, the court therefore rejected the entrepreneur's argument and ruled that the offer obligation continued to apply after the restructuring.

What does this mean for entrepreneurs?

This ruling contains an important lesson for any entrepreneur involved in a restructuring of their corporate structure:

• Restructuring does not automatically terminate existing agreements. Even after a major reorganisation of the corporate structure, earlier agreements may retain their effect under the principles of reasonableness and fairness.
• Explicitly record what happens to existing agreements. If you want certain agreements to cease to apply following a restructuring, ensure that this is explicitly recorded in writing.
• Intent matters. If a restructuring is fiscally motivated and the parties continue their cooperation unchanged, a court will readily assume that existing agreements also continue unchanged.

Case Reference

This post is based on ECLI:NL:RBDHA:2023:5380.

Mr. V.M. Besters acted as counsel for the claimant in this case.