FORCED BUY-OUT OF MINORITY SHAREHOLDERS UNDER NETHERLANDS ANTILLES LAW
Squeeze out measures can rather easily be enforced
A shareholder who owns ninety five percent or more of the issued capital of a Netherlands Antilles company may initiate legal proceedings to require all of the other shareholders to transfer their shares to them (‘uitkoopregeling’). The articles of association may provide for a lower percentage, provided it is not less than ninety percent. The mere fact that the majority shareholder meets this requirement is sufficient for initiating forced buy-out proceedings. No further explanation is needed as far as this buy-out is concerned. The minority can be bought out against its will.
The court will refuse the – mandatory – transfer only if the minority shareholders would suffer considerable financial damage that would not be compensated by the transfer price, or if the minority shareholders (or any one of them) own shares to which the articles of association attach a special right concerning control in the company (priority shares), unless the articles provide otherwise, or if the majority shareholder has renounced his right to initiate such claim.
The purchase price is determined by the court. The court may direct that one or three experts shall advise as to the value of the shares. If the court grants the claim, it shall order the majority shareholder to pay the transfer price to the minority shareholders.
Karel Frielink
Attorney (Lawyer) / Partner
