THE ABN AMRO BANK CASE REVISITED
Good faith requirements rule
On 3 May 2007, the Amsterdam Enterprise Court (‘Ondernemingskamer Hof Amsterdam’) ruled that ABN AMRO Bank must freeze its $21 billion sale of U.S. unit LaSalle to Bank of America, because in the Court’s opinion the deal requires prior shareholders’ consent. The Court ruled it was “unacceptable” for ABN AMRO Bank to sell the Chicago-based LaSalle unit without shareholder approval, not as such, but because this transaction is connected with Barclays’ plan for a friendly public offer as well as the counter-offer by three other banks with respect to the shares of ABN AMRO Bank itself.
The Court’s ruling, which came as a surprise to many, is entirely based on good faith requirements (the principles of reasonableness and fairness). Good faith requirements govern, a.o., situations in which, e.g., the management board denies shareholders, or the supervisory board, any powers or rights to which they are entitled. These requirements are the ‘last resort’ and are frequently used when the corporate code lacks clear direction on how to solve a conflict. The case is now before the Dutch Supreme Court, which has decided to render a decision mid July (instead of by the end of the year)… yes indeed, ordinary people involved in legal proceedings still have to wait their turn.
I expect the Supreme Court to annul the decision of the Amsterdam Enterprise Court.
Karel Frielink
Curacao-based Attorney (lawyer) / Partner
Up-date 8 June 2007
According to FT.Com, Bank of America accuses the Amsterdam-based Enterprise Court of acting in a ‘shocking’ and unlawful manner by blocking its US$21bn acquisition of LaSalle.
[…] See for previous postings on this case here, here and here. […]