Company has duty of care towards minority shareholder in The Netherlands
According to recent Dutch corporate case law, a company has a special duty of care towards a minority shareholder. This means (inter alia) that the company should try to prevent that her interests conflicts with the interests of the board of directors or majority shareholders, possibly at the expense of the minority shareholder. Dutch corporate solicitor Marco Guit, explains.
The position of shareholders in a limited
The claimant in this lawsuit was the director and shareholder of a company. The defendants were the two other shareholders. The three equal shareholders disagreed about the company’s strategy regarding a potential take-over by a third party. The claimant was against the idea while the others were in favour. This shareholders’ dispute eventually led to a severely impaired relationship between the three parties. At one point the defendants called an extraordinary shareholders meeting and decided to dismiss the claimant as director.
Interim injunction proceedings for suspension resolution
In preliminary relief proceedings the claimants’ lawyer requests the judge to suspend this resolution of dismissal. He argues that the decision is in conflict with the requirements of reasonableness and fairness. Besides that, it is in conflict with the duty of due care to which the defendants, as being co-shareholders, business partners and colleague, are subjected. In this case the judge considers the defendants to have not acted according to their duty of care. It appears from the documents that the defendants have tried continuously to sideline the claimant. The irreparable breach of trust thus cannot be blamed on the claimant but on the defendants themselves. The judge finds the dismissal decision defective and decides to suspend.
Dutch lawyer in shareholders dispute
The shareholders meeting appoint the board of directors. The options for shareholders to appoint or dismiss directors are extended under the new Dutch Limited Company (the so-called Flex-BV). Directors can be suspended and dismissed at all times. Most articles of association of a company, however, prescribe a consultation right for the director concerned. The director has the opportunity to give his view on the resolution proposed by the shareholders meeting or the supervisory board. This right of consultation is also laid down in company law of the Dutch Civil Code as well as in the requirements of reasonableness and fairness which parties involved have to adopt towards each other. Be aware though of the special rules that apply with respect to the dismissal of a statutory director.