Private M&A deals: recent case law strengthens shareholders’ agreements

Чрезвычайно актуальная публикация посвящена соглашению акционеров. Особую значимость соглашение акционеров приобретает в свете недавнего решения французского суда о том, что продажа акций в нарушение соглашения акционеров недействительна. Соглашение акционеров имеет то преимущество перед учредительными документами корпорации, что содержащиеся в нем сведения могут быть конфиденциальными. Правда казус еще не исчерпан, поскольку ожидается еще решение Парижского апелляционного суда по этому делу.

Introduction
Facts
Decision
Comment
Introduction

In the context of the acquisition of group companies, the parties will carefully select what to insert in the bylaws of the company, which are publicly available, whereas in separate private agreements, which are confidential, the parties may include further, more detailed information.

If the advantage of such private agreements (eg, shareholders’ agreements, or put or call options often entered into between managers of the target and other shareholders) is their confidentiality, the drawback is their lack of enforceability towards third parties. But what if the bylaws of the said company specifically mention that any sale made in violation of the shareholders’ agreement should be void?

The court decision discussed in this update is surprising, as it considers that such sale is void while not (yet) detailing the specificities of the situation of the third-party purchasers.

Facts

In 2010 a holding company purchased 100% of the shares of a target. Some managers and employees of the target became shareholders of the holding company. A shareholders’ agreement was entered into between the shareholders of the holding company. The agreement set up rules related to the transfer of the company shares and contained a 10-year call option related to the shares held by the managers. This call option could be exercised by other shareholders on termination by a manager of either their employment contract or their functions as a corporate officer. A clause in the shareholders’ agreement stated that the parties to the call option could not sell their shares for as long as the call option was in existence.

The bylaws of the holding company stated that any sale of shares made in violation of the shareholders’ agreement would be void.

In 2014 a manager who had entered into the shareholders’ agreement and whose shares were covered by the call option agreement, decided to terminate the call option agreement and sell his shares to third parties. The holding company refused to sign the share transfer certificates, arguing that the sale had been made in violation of the shareholders’ agreement. The seller sued the holding company for damages and requested that the share transfer certificates be registered in the books of the holding company.

Decision

On 27 June 2018 the Supreme Court Commercial Division considered that the sale had been made in violation of the shareholders’ agreement and that it was thereby void by application of the bylaws.

The Supreme Court referred the parties back to the Paris Court of Appeal.

Comment

This decision could be good news for parties to a shareholders’ agreement willing to keep terms confidential while enforceable towards third parties, as the decision could imply that the bylaws and shareholders’ agreement could be equally enforceable against third parties.

If the shareholders’ agreement (together with the call option that it contains) and the bylaws can be seen together as an agreement binding the parties of the shareholders’ agreement, the same conclusion may, however, be more difficult to reach with respect to third parties.

The Supreme Court was silent regarding the circumstances in which the third-party purchasers bought the shares and did not establish in particular if they were in good or bad faith (ie, does the third party need to be acting in bath faith in order for the transfer to be void). The next decision to be rendered by the Paris Court of Appeal will therefore be interesting to follow.

However, in the meantime, further bylaws referring to clauses of shareholders’ agreements related to share transfers and their sanction in case of violation of such rules are to be expected.

Авторы: Alain Levy, Gwenaëlle de Kerviler, Valérie Attia

Источник: https://www.internationallawoffice.com/Newsletters/Corporate-FinanceMA/France/AyacheSalama/Private-MA-deals-recent-case-law-strengthens-shareholders-agreements?utm_source=ILO+Newsletter&utm_medium=email&utm_content=Newsletter+2018-12-12&utm_campaign=Corporate+Finance%2fM%26A+Newsletter

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