Applicant (Elavon, an Ireland-based company) sought an order under article 3:251(1) Dutch Civil Code permitting the sale of pledged shares in a private transaction (a debt-for-equity swap) instead of a public auction. These shares (in IPS. B.V., the Company) were pledged by IPS Holding (the Company’s sole shareholder) to Crossbow and Rabobank as collateral for loans. IPS Holding and Airopack Technology Group AG (the Swiss Parent of the IPS entities) provided guarantees for the loans. The Company is in default under the loan agreements. Crossbow has accelerated the debt that it holds. Under Dutch law this means that the pledgee is entitled to enforce the pledge and sell the collateral at a public auction. But to sell the shares in a private sale (as in this case), judicial permission is required (article 3:251(1) CC).

The Netherlands Commercial Court (Court in Summary Proceedings) has jurisdiction under articles 25(1) and 26(1) of the Brussels Regulation (recast) (1215/2012) and article 24 of the Lugano Convention. All other legal requirements for proceedings to be in English before the NCC are met. Dutch law provides the company and property law rules in respect of the shares (lex societatis).

The material issue is whether the price the buyer (Crossbow) is willing to pay for the shares is right. Elavon referred to a valuation report. The report and its findings are uncontested. The Court agreed that the contemplated transaction will deliver the highest value for the pledged shares and facilitate the business’s recovery. Accordingly, the Court granted permission for the shares to be sold and transferred to Crossbow under the conditions as described in the proposed Share Purchase Agreement.

The judgment is available on www.ncc.gov.nl (see: Judgment List).

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