Okay, too much interesting stuff going on that could not escape the attention of this blog. Here we go, wrapping up our first year in the blogosphere with three links and some commentary.
1. On Friday December 22, the Dutch Supreme Court rendered a decision concerning nullification of a decision taken by the shareholder outside a formally convened general meeting. Pursuant to section 2:227(4) DCC, managing directors and supervisory directors (if any) have an advisory vote in the general meeting; this implies they have to be invited for the general meeting and be able to exercise their advisory vote, while non-adherence to this requirement creates a ground for nullification of the decision by the shareholders (see DSC March 10, 1995, NJ 1995, 595 (Janssen Pers)). The Supreme Court now clarified with so many words that this regime also - and still, in line with DSC March 10, 1995, NJ 1995, 595 (Janssen Pers) - applies in case the articles of association allow decisionmaking by shareholders outside the general meeting and the shareholders use this option; also in that scenario, managing directors and supervisory directors (if any) must be brought in a position in which they can exercise their advisory vote. Here's the money quote:
3.4 Onderdeel 1 van het middel strekt ten betoge dat art. 2:227 lid 4 niet van toepassing is bij besluitvorming die op de voet van art. 2:238 BW op andere wijze dan in een vergadering is geschied. Het onderdeel faalt, omdat het voorschrift van art. 2:227 lid 4 in beginsel ook in acht moet worden genomen bij besluitvorming als bedoeld in art. 2:238 (HR 10 maart 1995, nr. 15577, LJN ZC1657, NJ 1995, 595). Zoals is vermeld in de conclusie van de Advocaat-Generaal onder 3.2 bestaat het voornemen dit uitdrukkelijk in de wet op te nemen, hetgeen een argument temeer vormt voor handhaving van genoemde rechtspraak.
The court also clarified that in case the decision is nullified by order of the court, the decision must be deemed to never have existed (i.e., must be deemed to have been void ab initio).
De vernietiging van een besluit van een orgaan van een rechtspersoon brengt mee dat het besluit van meet af aan niet rechtsgeldig is geweest.
Not a stunning outcome really, in view of prior case law (the 1995 decision) and section 3:53(1) DCC (that deals with nullification), but useful nonetheless.
2. We've been discussing the reshaping of Dutch corporate law in the field of private companies several times (see, e.g., here with links). Now that the first tranche of the legislation process in parliament has been completed (the Second Chamber has accepted the proposal with some amendments), the waiting is for the second and last tranche, to be completed by the First Chamber (that chamber can only say yes or no, it cannot amend); if the process is picked-up and completed before April 1, 2010, the expectation is that the new regime for private companies will be operational as of July 1, 2010. So we're actually getting somewhere here, or so it seems.
In the meantime, the Dutch corporate governance code as updated in December 2008 - finally - replaced the old 2003 code as the code referred to in section 2:391(5) DCC, by means of a December 10, 2009 governmental decree (published on December 21, 2009). Section 2:391(5) DCC requires listed companies to include in their annual accounts the way they comply with the Dutch corporate governance code (which works with a 'comply or explain' mechanism). Background info on the 2008 code is available here.
3. Francis Pileggi has a nice interview with Delaware Supreme Court Chief Justice Myron T. Steele. The Q&A I found most interesting was the following:
Blog: How would you respond to the comment of some scholars that there are too many “standards of review” under Delaware corporate law, which in turn leads to indeterminacy? Chief Justice: Different standards are needed to address different factual situations, but that does not necessarily result in indeterminacy. There is a rational basis for using different rules for different situations. Indeterminacy as to which standard applies should not mean that it is unpredictable to know which standard applies. If one is familiar with Delaware law, the applicable standard should be clear.
This multi-level standard of review issue has been raised several times in the past, most notably in 2001 by three judges/scholars who are/have been active in the Delaware Chancery Court and are sometimes refered to as "The Three Tenors" of corporate law (go and read The Business Lawyer 2001, p. 1287 et seq. if you want to find out who I'm talking about here). For other interviews with Steele and Delaware Supreme Court Justice Jack B. Jacobs go here.
Many thanks for the hat tip
Posted by: francis pileggi | December 31, 2009 at 17:53