SUPREME COURT DECISION IN ABN AMRO BANK (LASALLE) CASE
ABN AMRO Bank didn’t need shareholder approval
Today the Dutch Supreme Court (‘Hoge Raad’) ruled that ABN AMRO Bank didn’t need shareholder approval to sell its U.S. subsidiary LaSalle to Bank of America. Subsequently, the Supreme Court overturned the decision of the Amsterdam Enterprise Court (‘Ondernemingskamer Hof Amsterdam’) and dismissed the request for any interim injunction to suspend (pending the approval by the shareholders) the contract of sale regarding LaSalle.
ABN AMRO Bank is at the center of a tug-of-war between two rival buyout offers, one from Barclays and another from a consortium of banks (Santander, Fortis and Royal Bank of Scotland). Today’s decision increases the chances that ABN AMRO Bank will ultimately be bought by Barclays.
According to the Supreme Court, the fact that the shareholders aim at selling their shares at the highest possible price involves no obligation for the Board of Directors of ABN AMRO Bank to obtain the shareholders’ approval of the sale of LaSalle, nor does such an obligation arise from the prevailing views of the law in The Netherlands.
In the Supreme Court’s opinion, now that the sale of LaSalle is definite, the interests of Bank of America and Barclays should be taken into account. There should not be any unnecessary uncertainty about the carrying out of this agreement, into which the Board of Directors of ABN AMRO Bank was entitled to enter.
The Supreme Court’s decision is fully in line with Dutch common opinion of law. The principles of reasonableness and fairness (a general concept) should be applied with certain restraint. This restraint is also in line with previous case-law. Only in specific circumstances the principles of reasonableness and fairness may constitute the ground for a legal obligation which is not yet in any statute.
In the meantime, the VEB (a Shareholders Rights Association) has requested the Amsterdam Enterprise Court to appoint three independent ‘super’ supervisory directors and to grant them the power to be in charge on behalf of ABN AMRO Bank as far as the bidding process is concerned. If the request would be honored, it would mean that the current boards of directors and supervisory directors will be no longer in charge of such process.
See for previous postings on this case here, here and here.
Karel Frielink
Curacao-based Attorney (lawyer) / Partner
