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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LITIGATION IN THE DUTCH CARIBBEAN
If you need a troubleshooter in your corner
The civil court system in the Dutch Caribbean (Aruba, Bonaire, Curaçao, St. Maarten, St. Eustatius and Saba) consists of three tiers; first instance cases are brought before the Court of First Instance. Appeal cases are brought before the Joint Court of Appeal. When all normal appeal procedures have been exhausted, cassation cases can be brought before the Court of Cassation or Supreme Court (Hoge Raad) in The Hague in the Netherlands.
All adversarial proceedings in the Dutch Caribbean shall be initiated by means of a petition to the Court of First Instance. …
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GOVERNMENT-OWNED COMPANIES
Opposing views on political influence
Few people would argue that the rules issued by the state (government) must also be correctly and strictly observed by that same state. It cannot be well conceived that, for example, the police and Public Prosecutor’s Office (as instruments of the state) should be allowed to violate the law with impunity.
Though there may be very different opinions about the nature and the role of the state (particularly from a philosophical and jurisprudential viewpoint), here we address the question of how we should consider government-owned companies, and in particular, what level of influence the government …
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THE INCORPORATION OF A CURACAO LIMITED LIABILITY COMPANY
Incorporating an NV or BV is not a hassle
The act on corporate law (Book 2 Curaçao Civil Code) governs the NV (‘public limited liability company’) and BV (‘private limited liability company’). These companies can be used for group finance or holding activities, (international) joint-ventures, funds, structured finance, as a Curaçao Trust and for “plain-vanilla” (local) activities.
A notarial deed is required for the formation of an NV or BV and for any amendment to articles of association (a.k.a. articles of incorporation). Formation can however, be very quick (within one or two days if necessary) and does not require many …
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THE CURACAO TRUST BECOMES MORE AND MORE POPULAR
Curaçao Trust could be used for asset segregation purposes
According to Professor of Law David Hayton, an Anglo-Saxon trust arises from the settlor’s transfer of title to property to another person, intending that person to be a trustee-manager of it for the benefit of beneficiaries or for a charitable or other permitted purpose. Trusts are founded on a transfer of title to property: contracts are not. Professor Hayton:
Such a contractual concept inevitably leads – or rather misleads – civil lawyers to consider that the Anglo-Saxon trust is simply a glorified form of contract between the settlor …
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RISK MANAGEMENT AND ASSET PROTECTION
Curaçao offers legitimate risk management solutions
Why would one consider an asset protection strategy? There are individuals and business entities all around the world not trusting their government (e.g. fear for expropriation or nationalization by their government). Or they are seeking legitimate protection from any future downturns. Or they do not want the world to know about their wealth and do want to protect their privacy as much as possible. Asset protection also can be an aspect of business, personal or estate planning.
It is quite common that limited liability companies are used for operating a business. The alternative, a …
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IMPACT OF THE LIABILITY TO THE DIRECTOR OF THE DIRECTOR (I)
Liability of the 2nd degree director
Under Section 2:17 subsection 1 of the Curaçao Civil Code, the liability of a legal entity as a director of another legal entity (the direct or 1st degree director) also rests jointly and severally on each person who at the time this liability arose for the legal entity was its director (the indirect or 2nd degree director). It applies to this indirect director as it applies to the direct director that he will not be liable if he can prove that he cannot be blamed for the improper performance of duties, also considering his …
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ORDER OF THE COMMON APPEAL COURT OF CURACAO CONCERNING THE RIGHT TO INSTITUTE AN INQUIRY
The Appeal Court has taken several fundamental decisions
On 5 March 2013 the Common Court of Justice of Aruba, Curacao, Sint Maarten and of Bonaire, Sint Eustatius and Saba (case: Ghis 55769 – HAR 28/12) issued an order in connection with inquiry proceedings. This order contains three major considerations.
The right of legal entities (including public limited companies [NV] and private companies with limited liability [BV]) to institute an inquiry was introduced in Curacao on 1 January 2012. Almost immediately after this introduction an application for instituting inquiry proceedings was submitted to the Appeal Court. The facts …
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BESCHIKKING INZAKE ENQUETERECHT GEMEENSCHAPPELIJK HOF CURACAO
Het Hof neemt enkele principiële beslissingen
Op 5 maart 2013 heeft het Gemeenschappelijk Hof van Justitie van Aruba, Curaçao, Sint Maarten en van Bonaire, Sint Eustatius en Saba (zaak: Ghis 55769 – HAR 28/12) een beschikking in het kader van een enquêteprocedure gegeven. Drie belangrijke overwegingen worden hier genoemd.
Het enquêterecht voor rechtspersonen (waaronder naamloze en besloten vennootschappen) is in Curaçao op 1 januari 2012 ingevoerd. Vrijwel direct na de invoering is een enquêteverzoek bij het Hof ingediend. De feiten die aan dat verzoek ten grondslag zijn gelegd hebben betrekking op de jaren voorafgaande aan de invoering van het enquêterecht. …
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LECTURE ON GOOD CORPORATE GOVERNANCE
Looking back on the future: the further development of corporate governance in Curaçao
A seminar on Checks and Balances in Corporate Governance on Curacao, was held on Thursday February 21st, 2013. More than 125 interested managing directors, supervisory directors, lawyers, accountants and other participants were in attendance.
The seminar was organized by the Board of financial supervision (College financieel toezicht – Cft), the Foundation Bureau for Supervision and Standardization Government Entities (Stichting Bureau Toezicht en Normering Overheidsentiteiten – SBTNO) and the Dutch Caribbean Accountants Association (DCAA). I had the honor to speak on the present and future of the Corporate …
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