Post-acquisition conflicts

A claim against a director becomes time-barred after five years from the transaction, but only from its discovery where the transaction was deliberately concealed.

Every member of a governing body owes the company the proper performance of his task, including after he has ceased to be a director. Article 2:56 of the Code of Companies and Associations limits that liability to decisions that clearly fall outside the margin within which normally prudent and careful directors, placed in the same circumstances, could reasonably differ. A buyer who discovers a management fault from before the transfer after an acquisition must therefore show that the fault exceeded that margin, not merely that the outcome disappointed.

Article 2:143 in principle time-bars a claim against a director after five years from the transaction itself. Where the transaction was deliberately concealed, however, that period only starts to run from its discovery. A buyer who finds the proverbial skeleton in the closet only after the acquisition does not therefore automatically lose his claim to the passage of time.

Article 574 of the Judicial Code gives the enterprise court jurisdiction over disputes between a company’s former, current or future shareholders. A buyer who only became a shareholder after the transfer, and a seller who ceased to be one after that same transfer, both fall under the same jurisdiction.

Article 1723/1 of the same Code lets the parties turn to mediation before starting proceedings: a confidential and structured process of voluntary discussion guided by an independent third party. Article 1724 lets a dispute of a patrimonial nature, such as a dispute over the price or over liabilities concealed at an acquisition, go through that mediation.

Everest (anti)fraud first checks whether a settlement through mediation is achievable, and then, where that fails, deploys the procedural options that defend your position with the best chance of success.

Have you acquired the shares or the assets of a company, only to discover the proverbial skeleton in the closet afterwards? Or did you sell your company, and is the buyer now trying to hold you liable, claiming you failed to inform him correctly at the acquisition? Here too, we assist you with advice and action.

We first explore the possibilities of reaching a settlement through mediation. Where that proves impossible, we look together with you at the procedural options available, from a claim for a concealed management fault to the other routes our page on conflict management through court proceedings sets out.

Did the hidden fault occur during the management of the company, our page for company directors sets out the standards that apply there. Our approach to shareholder disputes in general sits among our practice areas, with closed files among our references.

From the discovery of the fault, not from the fault itself, where the transaction was deliberately concealed. Article 2:143 of the Code of Companies and Associations only starts the ordinary five-year period, in that case, once the fault comes to light.

Yes, Article 574 of the Judicial Code gives the enterprise court jurisdiction over disputes between a company’s former, current or future shareholders. The moment someone became or ceased to be a shareholder does not change that jurisdiction.

The law does not require it, unless your acquisition agreement itself contains a mediation clause. Article 1724 of the Judicial Code still lets a dispute over the price or over liabilities concealed at an acquisition go through voluntary mediation, and we routinely explore that route first.

Every member of a governing body owes the company the proper performance of his task, including after he has ceased to be a director. Article 2:56 of the Code of Companies and Associations limits that liability to decisions that clearly fall outside the margin within which normally prudent and careful directors, placed in the same circumstances, could reasonably differ.