Taking decisions to liquidate companies has become a matter of routine when optimising corporate structures to improve cost efficiency. Increasingly, we see that such decisions have been taken either prematurely or without taking all of the relevant factors into account.
Our firm has acquired vast experience of revoking shareholders’ resolutions to liquidate. Although there is no direct legal basis for such a revocation, in practise it appears to possible to revoke a resolution by obtaining a court judgment to that effect (Amsterdam District Court, LJN: BP6858, 417144 / HA RK 09-11). This court ruling opened the door to revoking liquidation resolutions. In order to successfully revoke a liquidation resolution, the court must find that (i) the actions of the liquidator have been exclusively limited to registering the liquidation resolution with the Chamber of Commerce (ii) the liquidation has not yet commenced in any way, and (iii) the interests of third parties will not be prejudiced.
We recently advised a client on a revocation request in a case in which the general meeting of shareholders decided to dissolve the company in January 2010. Prior to the dissolution, the company had been part of an international group. In April 2010, however, the group demerged and its members continued their activities independently. During the implementation of the demerger, the structure was examined in detail. After this process was finalised in June 2011, it became clear that maintaining the Dutch company was of essential strategic and fiscal importance to the group. In July 2011, the general meeting decided to revoke the liquidation resolution. Subsequently, one of our lawyers obtained a court ruling revoking the general meeting’s resolution to liquidate and dissolve the company and to appoint a former director as liquidator (Amsterdam District Court, LJN: BV9851, 501558 / HA RK 11-330). The Chamber of Commerce was then instructed to process the revocation decision. In this case, the Amsterdam District Court granted the request to revoke the shareholders’ resolution to liquidate the company despite the lack of a provision in the Dutch Civil Code specifically allowing this and – more significantly – despite the fact that the one-year term which is generally considered a maximum for revocation pursuant to Book 2 of the Dutch Civil Code had already expired.
Although judgments having retroactive effect are rarely granted, the revocation of a liquidation resolution may prove to be a very useful tool in helping to “undo” the negative consequences of a liquidation.