CROSS BORDER CONVERSION AND MERGER (part 3)

Within the Kingdom

Under the Transfer of Seat Ordinance it is for instance impossible to transfer to Aruba or St. Maarten. Article 38 paragraph 4 of the Charter of the Kingdom of the Netherlands provides that the subject of transfer of seat of legal entities must be regulated in a Kingdom Act. Agreement between the governments of the countries is required for this provision. For as long as that subject has not been regulated in a Kingdom Act, a transfer of seat within the Kingdom is not possible; because cross-border conversion can be materially equated with it, it is assumed …
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22
Feb 2013
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CROSS BORDER CONVERSION AND MERGER (part 2)

Transfer of the seat

The cross-border conversion was already known in the past as the doctrine of the transfer of the seat. Just a few words about this.

The transfer of seat had been regulated in the Transfer of Seat to Third Countries Ordinance (Landsverordening zetelverplaatsing derde landen). This Ordinance was repealed as from 1 March 2004 onwards; this system has been replaced by the cross-border conversion system. However, see Section II of the Repair Act of 24 December 2004, P.B. 2004, 198, which revives this Ordinance for certain companies: in the event that a public limited company (NV) had, …
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15
Feb 2013
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CROSS BORDER CONVERSION AND MERGER (part 1)

Recent developments

The Netherlands Antilles ceased to exist as a country on 10 October 2010. Curacao and Sint Maarten have become independent countries within the Kingdom of the Netherlands, just as Aruba had already been for quite some time. Bonaire, St. Eustatius and Saba have become extraordinary municipalities of the Netherlands. These constitutional changes have resulted in far-reaching consequences for the cross-border conversion and cross-border merger of legal entities.

This posting is based on Book 2 of the Curacao Civil Code as applicable from 1 January 2012 onwards. As with the merger and split, the conversion has been regulated in …
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11
Feb 2013
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TAKING OVER CONTROL OF A CURACAO COMPANY THROUGH A FOREIGN COURT DECISION

The powers of a foreign appointee will not be recognized

According to Curacao private international law, the appointment and dismissal of board members of a company as well as decisions limiting their powers is governed by the laws of the jurisdiction under which the company is incorporated. Accordingly, the appointment and dismissal of a board member of a Curacao limited liability company (NV or BV) as well as any limitation in respect of his powers must take place in accordance with Curacao law.

In the event a Curacao company has a foreign branch, e.g. in the United States, such company …
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08
Feb 2013
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 8)

Final remarks

The receiver can be faced with a multitude of conflicting interests. Often he will be able to reach a weighing of interests relatively quickly and without many problems, but sometimes he has to balance on a thin bankruptcy tightrope. In doing so the law offers him hardly any support and neither does case law due to it being strongly case-based, although there is the reassuring fact that from a liability point of view many of his decisions should ‘only’ be able to bear a limited review.

However, the receiver personally being faced with a conflict of interest, which …
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01
Feb 2013
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 7)

Conflicting interests in connection with consolidated business operations

When multiple companies of the same group go bankrupt, it can be of major importance for a creditor of one of these companies to know how the winding up is developing of one or more of the other companies. Particularly when a consolidated bankruptcy is involved, the creditors will have to be alert. In connection with a consolidated bankruptcy, there will in actual fact be one single joined estate. If this is the case, in the various bankruptcies one single joint creditors’ meeting must be held of which all the creditors of …
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25
Jan 2013
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 6)

Conflicting interests of different bankruptcy estates

The management of different but associated bankruptcy estates can be entrusted to one and the same person who therefore is appointed several times as receiver. In this connection group relationships come to mind. It is true that in connection with different estates with one and the same person as receiver, companies not affiliated in a group also come to mind, but this will probably not often occur. Regularly, (members of) groups go bankrupt (for instance RSV, OGEM, DAF, Fokker, Infotheek Groep, Bredero, Text Lite, Mediasafe, Medicopharma, Palthe, Verto, Wyers, HCS, UPC, Van der Moolen, …
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18
Jan 2013
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 5)

Different types of interests

A receiver cannot escape the weighing of interests. Such a weighing should be verifiable. The line of thought followed by the receiver should be clear. Particularly because, apart from his liability and remuneration, these being of a different order, he has no self-interest in the winding-up of the bankrupt estate, the receiver is the obvious person to weigh the interests. If required he can and will himself be assisted by an expert. In connection with bigger bankruptcies or when a business is continued, it is for instance sensible also to appoint as receivers one or more …
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11
Jan 2013
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 4)

The receiver and personal interests

The duties of the receiver are to represent the interests of others. When his personal interests are affected he must observe extreme restraint and openness. If there is a conflict of interest or if a semblance of it has been created, he ought to withdraw as the receiver. The receiver is not allowed to sell goods forming part of the estate to himself, even if this would have been allowed by the supervisory judge (direct conflicting interest). Even bidding in a public auction he has organized is in my opinion not compatible with the independence …
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04
Jan 2013
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TYPES OF LIABILITY IN CURACAO

A three-part distinction

With regard to liability a three-part distinction can be made. The first distinction relates to the basis of the liability: liability pursuant to a contractual relationship (the attributable failure in this respect) and liability pursuant to a wrongful act.

Another distinction relates to the personal liability (thus for the party’s own actions or omissions) and vicarious and/or strict liability: liability for or the acts and omissions of others (vicarious liability) or liability for certain things that happen (strict liability).

For example, employers can be held vicariously liable for certain actions of their employees. According to the Curacao …
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18
Oct 2012
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GOVERNMENT AND CORPORATE GOVERNANCE (V)

Government drafted model articles of association

The first model articles of association date from March 15, 2011.

For criticism see: K. Frielink, Visie Land op overheids-NV’s verkeerd [Vision Country on government-owned NVs incorrect], Antilliaans Dagblad 15 April 2011, p. 16 and M.L. Alexander, F.B.M. Kunneman, L.G. Santine and R.J. in ’t Veld, Modelstatuten ten sterkste afgeraden [Model articles of association strongly discouraged], Antilliaans Dagblad 20 September 2011, p. 14-15. See also K. Frielink, Stop politieke benoemings- en ontslagcarrousel [Stop politicial appointment and dismissal merry-go-round], Antilliaans Dagblad 14 September 2010, p. 14-15.

In the meantime, the models for …
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21
Jun 2012
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GOVERNMENT AND CORPORATE GOVERNANCE (IV)

Code Corporate Governance Curacao

On January 1, 2010, the National Ordinance regarding corporate governance came into effect. Based on this the Code Corporate Governance Curacao came into being, that also came into effect on January 1, 2010. In it, reference is still made to the Executive Council and the island territory of Curacao, but as from October 10, 2010 these are understood to mean the government of Curacao and the Country Curacao.

The National Ordinance does not only undertake to establish a corporate governance code, but also to implement the Code in the government-owned companies. In 2011, this implementation obligation …
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14
Jun 2012
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