PROPOSED REVIEW DUTCH CARIBBEAN CROSS BORDER MERGER LEGISLATION
Proposed bill introduces outbound mergers
Earlier in 2010, a draft bill was proposed to amend the Corporate Code (Book 2 Civil Code) of Curacao, St. Maarten, Bonaire, St. Eustatius and Saba (which formerly constituted the Netherlands Antilles). Hopefully, the Bill comes into force in 2011.
The possibility already currently exists that in connection with a merger, a foreign legal entity as the disappearing legal entity merges with a comparable legal form of Book 2 BW on the condition that the law governing that foreign legal entity is not incompatible with the merger and the manner in which it is brought about (Article 2:323a BW; ‘inbound’). It will now also become possible that a legal entity within the sense of Book 2 BW as the disappearing legal entity merges with an acquiring legal entity under foreign law (Article 2:323b of the proposed bill; ‘outbound’). A condition in this case is also that the law governing that foreign legal entity is not incompatible with the merger and the manner in which it is brought about.
With regard to the acquiring (foreign) legal entity the rules applicable to such a merger of the foreign law applicable to that legal entity are taken into account as much as possible. Articles 2:310 up to and including 2:334 Civil Code are applicable but exclusively with regard to the disappearing legal entity. This means for instance that the objection provisions of Article 2:316 Civil Code are applicable.
The Dutch arrangement whereby a minority shareholder casting his vote against the merger can request the Court to award him compensation is not included in Book 2 Civil Code. For that matter it is imaginable that a shareholder who suffers a loss as a consequence of the merger, can under certain circumstances claim compensation for it. However, a claim in that sense must be judged under the ordinary rules of the law of property as they are coloured by the law on legal persons.
Karel Frielink
Attorney (Lawyer) / Partner
(17 November 2010)
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