Corporate matters

Company disputes

1. Companies have long been part of our society. They are used as a working tool for running a business, as succession planning, estate planning, etc. Companies offers many advantages as long as the mutual relationships between the various actors are good.

But misunderstandings, conflicting characters, ... between shareholders and/or business managers sometimes lead to conflicts, as a result of which the roads usually part. The company should therefore not be dissolved immediately.

A business manager can be fired (unless he is appointed under the articles of association) and/or be held liable. He can be held liable towards the company. It is important to him that he is granted discharge at the annual general meeting.

He can also be liable towards third parties, but for this he must also have committed an infringement of company law or have committed a serious error (eg withdrawn assets from the company). Continuing a company that is in bad shape, without this being apparent from the annual accounts, also leads to responsibility. Fiscal and social security debts of the company automatically lead to the responsibility of the manager/director.

A shareholder has various rights to maintain control over the company (e.g. the right to audit the accounts, the right to request an expert investigation from the court, the appointment of a temporary administrator, the minority claim, etc.)

2. If there is a mutual dispute between the shareholders (with the new company law extended to other holders of securities, such as warrants, even for usufruct and bare ownership), a shareholder can voluntarily resign or can request that the other shareholders have to leave the company. The existence of the company is not jeopardized by the 'dispute settlement'.

A problem can also arise between spouses who have contributed the family home to a company. Then the legal problems of liquidation-distribution after divorce are mixed with those of companies, so that everything must be carefully weighed up.

Of course, an attempt must always be made beforehand to find a way out through agreement.

It is important that people do not end up in a weak negotiating position beforehand, because then rights are misunderstood.

3. A certain threshold of rights must be reached. The shareholder concerned, with whom there is an insurmountable problem in which the interests of the company are jeopardized, is summoned (together with the company) before the chairman of the company court, sitting as in summary proceedings. It is declared permissible when no alternatives are available. Substantiated reasons must be demonstrated for a request for exclusion. It must not be erroneous or unlawful conduct, but a sufficiently serious and lasting disagreement between partners will suffice, and the court will have to determine which party offers the best guarantees for the survival of the company[1]. When allowing the principle, an expert appointed to determine the value of the shares at the time when the court orders the transfer. With the new law, the chairman can now also make decisions on related disputes (such as loans, securities, non-compete clauses).

The judge may also take into account the behavior of the parties that could have a significant influence on the value of the shares (shift the reference date, determine a fair price that is higher or lower than the estimated value). The court can also link part of the payment to compliance with a non-competition prohibition.

[1] Court of Cassation, 9.9.2019, RW 2020-21, pg 144