$1.3 BILLION SETTLEMENT OF FORTIS INVESTOR ACTIONS
Interesting post by Kevin LaCroix (The D&O Diary)
“In what is by far the largest investor settlement ever under the Dutch collective settlement procedures, several shareholder foundations have reached an agreement to settle the Fortis shareholder claims for a total of €1.204 billion ($1.3 billion).
The shareholder foundations’ settlement with Ageas, as Fortis is now known, relates to Fortis’s ill-fated October 2007 participation in the ABN AMRO acquisition just before the global financial crisis. Under a parallel settlement, €290 million ($313 million) of the shareholder settlement will be funded by Fortis’s D&O insurers. The shareholder settlement is subject to the …
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STATUTORY FRAMEWORK FOR PROSPECTUS LIABILITY (II)
The Netherlands, Curaçao, St. Maarten and the BES-islands compared
The Netherlands
In the Netherlands there is a two-track law concerning prospectus liability as professor L. Timmerman calls it. There are two sets of rules supplementing the general doctrine of the wrongful act (Section 6:162 of the Dutch Civil Code (‘BW-NL‘):
1. Misleading and comparative advertising (B2B)
Section 6:194 subsection 1 BW-NL:
“A person who with regard to goods or …
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STATUTORY FRAMEWORK FOR PROSPECTUS LIABILITY (I)
The Netherlands, Curaçao, St. Maarten and the BES-islands compared
That a prospectus must be approved (in the Netherlands and the BES Islands by the Authority for the Financial Markets, and in Curaçao and Sint Maarten by the Joint Central Bank of these countries) does not guarantee that the prospectus is not misleading. Therefore approval by the regulator does not entail a guarantee. The approval can be considered as an administrative approval contributing to better quality and more uniformity of the prospectuses.
A prospectus is an offer or an invitation to make an offer directed to the general public or to …
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WHEN IS A PROSPECTUS REQUIRED?
The Netherlands, Curaçao, St. Maarten and the BES-islands compared
The Netherlands
The legal system in the Netherlands has a European origin. We will not discuss this further here.* Chapter 5.1 of the Dutch Financial Supervision Act (Wet op het financieel toezicht: ‘Wft’) includes the rules for offering securities.
Section 5:2 Wft stipulates:
“It is forbidden in the Netherlands to offer securities to the general public or to allow securities to be traded in a regulated market situated or operating in the Netherlands unless – with regard to the offering or the admission – a prospectus is generally available which has …
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PROSPECTUS LIABILITY AND PRIVATE INTERNATIONAL LAW
The Netherlands, Curaçao, St. Maarten and the BES-islands
The Netherlands
Since 11 January 2009 Rome II* has been applicable in the Netherlands with regard to the applicable law on non-contractual obligations. Rome II is not applicable in Curaçao, St. Maarten, Aruba and the BES Islands. This observation obviously does not exclude a certain reflex effect.
Rome II applies to events causing loss occurring after 11 January 2009 (Section 31 Rome II). Non-contractual obligations, insofar as they are relevant here, involve obligations arising from (legal) obligations to pay compensation pursuant to a wrongful act (tort).
In my opinion prospectus …
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PROSPECTUS LIABILITY IN THE NETHERLANDS
World Online is the landmark case
Undoubtedly the most important ruling with regard to prospectus liability is the ruling of the Dutch Supreme Court (Hoge Raad) in the case of World Online (WOL) of 27 November 2009 (JOR 2010, 43 with annotation by Karel Frielink).
World Online was a European Internet Service Provider and its Initial Public Offering (IPO) in 2000 proved a disaster. According to the Dutch newspaper NRC Handelsblad of 22 July 2000: “World Online had all the ingredients to become a conflagration with prices going through the roof, as they say in stock exchange folklore.”
After the …
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FATCA AND THE US – DUTCH INTERGOVERNMENTAL AGREEMENT
Dutch IGA published
In connection with the Foreign Account Tax Compliance Act (“FATCA”), the government of the Netherlands entered into a Model 1 Intergovernmental Agreement (“IGA”) with the United States (click here). Under the Dutch IGA, Netherlands financial institutions would report required information to the Netherlands tax authorities, followed by an automatic exchange of the reported information to the IRS.
The Dutch IGA, entered into on December 18, 2013, is substantially similar to the Model 1A IGA that includes a reciprocal approach for the sharing of information between the two governments. Article 3 paragraph 7 of the …
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QUEEN BEATRIX ABDICATES IN FAVOR OF SON
The Queen will formally stand down on 30 April 2013
Queen Beatrix of the Netherlands announced earlier today that she will abdicate on April 30 after 33 years as head of state. The abdication secures the Dutch throne for Crown-Prince Willem-Alexander at the age of 45.
“Responsibility for our country must now lie in the hands of a new generation,” Queen Beatrix said in a short televised statement.
Karel Frielink
(28 January 2013)
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INADEQUATE CAPITALIZATION OF A CURACAO COMPANY
Liability for thin-capitalization?
A shareholder is not personally liable for acts performed in the name of the company and is not liable to contribute to losses of the company in excess of the amount which he must pay to the company as contribution for his shares.
In terms of ‘piercing the corporate veil’, thin or inadequate capitalization usually means capitalization that is not in proportion to the nature of the risks the business of the corporation necessarily entails; in other words it is based on likely economic needs rather than legal requirements. In almost all jurisdictions, undercapitalization as such is …
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ON THE GERMAN – DUTCH CARIBBEAN RELATIONSHIP
Interesting editorial in The Daily Herald (St. Maarten)
“The visit of German ambassador Heinz-Peter Behr last week should serve as an eye-opener on the largely untapped possibilities that European market offers. Up to now much of the attention regarding the “Old Continent” understandably regards the Netherlands and France from which “The Friendly Island” also has direct airlift, but Germany as Europe’s economic powerhouse and surrounding nations hold great tourism potential.
Curacao managed to attract Air Berlin flights recently and already has noticed a marked increase in the number of visitors from that part of the …
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CURACAO TAX REFORM 2011
New Opportunities for the International Sector
The Curacao tax reform 2011 was recently adopted by the Curacaoan parliament. The Curacao tax reform 2011 has some interesting features for the international financial sector. The expectations are that more features will follow during the next few years, however, no formal announcements have yet been made in this respect. A switchover from direct to indirect taxation is already evident in the Curacao tax reform 2011, although still on a modest scale. Expectations are that this trend will continue. Personal and corporate income tax rates will decrease, while turnover tax will increase from 5% …
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VOLUNTARY DISCLOSURE AND THE HUNT FOR UNDISCLOSED ACCOUNTS BY US AND DUTCH TAX AUTHORITIES
Propaganda machines up to speed
Publicity efforts by the US and Dutch tax authorities indicate that the hunt for undisclosed accounts in typical offshore jurisdictions is still a hot item. Although Curacao was not mentioned by the US authorities, the Dutch tax authorities announced a new search for undisclosed accounts in Curacao based on information provided by the French tax authorities. The IRS announced a new voluntary disclosure program which mitigates the risk of criminal prosecution in exchange for paying taxes, interest and a standardized penalty. Furthermore, the IRS announced that they will follow ‘new leads’ emanating from voluntary disclosures. …
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