Category: *In English

Are loyalty voting rights efficient?

Some reflections on the Belgian proposals

Especially after the financial crisis, many people have drawn attention to the problem of short-termism. There are many possible strategies to address this problem, including awarding additional voting rights to loyal shareholders (“loyalty voting rights”). Both France and Italy have introduced loyalty voting rights, and now the Belgian proposal for a new Companies and Associations Code also contains the possibility of loyalty voting rights in listed companies (discussed in previous blog posts here and here).

Of course, this raises the question how effective loyalty voting rights, as proposed in the Belgian Company Law Reform, are in addressing the short-termism problem. In this blog post, I argue that loyalty voting rights are unlikely to increase the holding periods of investors, as the evidence suggests that they are only used by the controlling shareholders. However, loyalty voting rights will allow a controlling shareholder to insulate itself from short-term market pressures. On the other hand, insulation also comes with the disadvantage of higher agency costs.

Therefore, I argue that loyalty voting shares are in fact nothing else than a type of control-enhancing mechanism. This implies that shareholders should be protected against midstream introductions of loyalty voting rights. On this ground, I question the wisdom of lowering the threshold to introduce loyalty voting rights, as the Belgian legislator is proposing, inspired by the French and Italian examples. In addition, I propose an additional majority for the introduction of loyalty voting rights, inspired by the idea of “majority of the minority” approval.

Continue reading “Are loyalty voting rights efficient?”

Proposed New Belgian Companies Code: so what for Lenders?

A post by guest blogger Eric Blomme (Simmons & Simmons)

The government’s proposal for a new Belgian Companies Code is a hot topic in the Belgian legal and business world.  Among the most publicized changes are a cap on directors’ liability for all company types and the abolition of the share capital for the private limited liability company (now BVBA/SPRL but to be renamed BV/SRL).  No doubt good news for directors and shareholders but what does this mean for lenders?  Continue reading “Proposed New Belgian Companies Code: so what for Lenders?”

Polbud: new perspectives for corporate mobility in the internal market

Professor Johan Meeusen (UA) in Liber Amicorum Christian Kohler

Professor Johan Meeusen of the University of Antwerp wrote an interesting contribution on corporate mobility and the internal market in Europa als Rechts- und Lebensraum, Liber amicorum für Christian Kohler zum 75. Geburtstag am 18. Juni 2018 (Bielefeld, Gieseking, 2018). A quote:  Continue reading “Polbud: new perspectives for corporate mobility in the internal market”

Agreement reached on a partial general approach on the directive on insolvency, restructuring and second chance

Today (04/06/2018), the Justice and Home Affairs Council has agreed on a partial general approach on the directive on insolvency, restructuring and second chance (previous posts on the proposal of this directive can be found here and here). The partial agreement covers the articles of Title III (Discharge of debts and disqualifications), Title IV (Measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt) and Title V (Monitoring of procedures concerning restructuring, insolvency and discharge of debt) as well as key related recitals.

Continue reading “Agreement reached on a partial general approach on the directive on insolvency, restructuring and second chance”

Publicatie: Le droit des contrats à l’épreuve de la faillite

De gevolgen van een faillissement voor lopende overeenkomsten geven aanleiding tot een veelheid van boeiende praktische en theoretische vragen. Om deze vragen te beantwoorden was tot voor kort geen standaardwerk beschikbaar. Dit standaardwerk is er nu wel, in de vorm van de publicatie van het proefschrift van dr. Florence George.  À ne pas rater.

New EU rules on company law: more flexibility, more protection?

Company Law package may have large impact on cross-border mobility of EU companies

Yesterday, the European Commission launched two proposals for new rules on the cross-border mobility and digital registration of companies. The rules are intended to make it easier for companies to merge, divide or move within the European Union, as well as to prevent social dumping, tax evasion and other forms of abuse.

Continue reading “New EU rules on company law: more flexibility, more protection?”

Green financings surge in high liquidity markets

A post by guest bloggers Johan Mouraux and Cedric Hauben

The state of Belgium recently joined the club of sovereign “green” bond issuers preceded in Europe only by Poland and France. Under the last years’ market conditions of persistent low interest rates and high liquidity, both public and private sector stakeholders have developed a means to add value to their financing transactions. While bringing environmental and public benefits into the equation, fresh market opportunities are being created for all those involved.

Following this cross-sector trend, both the International Capital Markets Association (ICMA) and the Loan Market Association (LMA) have issued sets of guidelines for their primary fields of business, respectively named the Green Bond Principles (GBP) and Green Loan Principles (GLP). Both the GBP and GLP aim to provide a high-level framework of market standards and best practices, setting out a consistent methodology for use across the wholesale green financial markets.

What does green financing stand for? Continue reading “Green financings surge in high liquidity markets”

APR-prijs voor beste juridische meesterproef aan KU Leuven naar Bram Van Baelen over beslag op aandelen

“Het uitvoerend beslag op aandelen in een BVBA”, Master KU Leuven

De APR-prijs 2016-2017 (Algemene Praktische Rechtsverzameling) voor beste meesterproef aan de KU Leuven is toegekend aan Bram Van Baelen voor zijn thesis “Het uitvoerend beslag op aandelen in een BVBA”. Promotor van de meesterproef was Prof. Dr. Joeri Vananroye.

De meesterproef gaat over de verschillende hindernissen die de persoonlijke schuldeisers van aandeelhouders kunnen ondervinden wanneer zij uitvoerend beslag willen leggen op aandelen in een BVBA. In eerdere blogposts hier over het belang van beslag op aandelen in “organizational law” en over het beslag op aandelen naar Belgisch recht kon u reeds de probleemstelling lezen.

Over de auteur

IMG_1153Bram Van Baelen behaalde met grote onderscheiding zijn Master in de Rechten aan de Faculteit Rechtsgeleerdheid van de KU Leuven (bachelor 2013-2015; master 2015-2017, major: Economisch recht/ minor: Publiekrecht) en werkt sindsdien als assistent aan het Jan Ronse Instituut voor Vennootschaps- en Financieel Recht waar hij een proefschrift voorbereidt. Tijdens het schrijven van de meesterproef was hij voorzitter van LOKO, de Leuvense Overkoepelende Kringenorganisatie.

Over de meesterproef

Continue reading “APR-prijs voor beste juridische meesterproef aan KU Leuven naar Bram Van Baelen over beslag op aandelen”

European Private International Law at 50. Celebrating and Contemplating EEX and its Successors

Jura Falconis Conference 23 March 2018, 10 AM – 5:30 PM (College De Valk, Leuven)

In 2018 we celebrate the 50th year since the adoption of the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters. The 1968 attempt to facilitate the free movement of judgments in the EU, helped lay the foundations for the exciting developments in European private international law which have occurred since. Many of the outstanding issues in what is now the Brussels I Recast (also known as EEX-bis; or Brussels Ibis) continue to have an impact on other parts of European civil procedure.

Co-organised by Leuven Law’s Institute of Private International Law and Jura Falconis, KU Leuven’s student law review, this event will consider, capita selecta wise, the application and implications of the Convention and its successors. It will also discuss the future direction of EU private international law both for civil and commercial matters, and for issues outside of commercial litigation. At a time when in most Member States the majority of commercial transactions have some kind of international element, this is a timely refresher for practitioners, judges, students and scholars alike.
PROGRAM Continue reading “European Private International Law at 50. Celebrating and Contemplating EEX and its Successors”

European Commission announces proposals on covered bonds, cross-border distribution of investment funds and cross-border transactions in claims and securities

“Capital Markets Union: breaking down barriers to cross-border investments and accelerating delivery”

The European Commission announced today proposals on (i) covered bonds, (ii) cross-border distribution of investment funds and (iii) the law applicable to cross-border transactions in claims and securities (press release).

The latter issue was dealt with in a previous post on this blog by Louis Coussée. The assignment of a claim refers to a situation where a creditor transfers the right to claim a debt to another person in exchange of a payment. This system is used by companies to obtain liquidity and access credit. At the moment, there is no legal certainty as to which national law applies when determining who owns a claim after it has been assigned in a cross-border case. The new rules proposed today clarify according to which law such disputes are resolved: as a general rule, the law of the country where creditors have their habitual residence would apply, regardless of which Member State’s courts or authorities examine the case.

The measures presented today, and the applicable to cross-border transactions in claims and securities.

The proposals will be presented by May 2018 in order to make it possible that legislation can be adopted before European Parliament elections in 2019.

More information is available from a Fact Sheet issued by the Commission.

Parent Companies Are Not Parents, Subsidiaries Are Not Children

Okpabi v Shell Judgment Puts the Brakes on the Expansion of Parent Company Liability for Damage Caused By Its Subsidiaries

A recent judgment of the England and Wales Court of Appeal addressed important jurisdictional questions in relation to a parent company’s liability for damages caused by its subsidiaries. The court did not rule on the merits of the claim; rather, it analysed the preliminary issue of whether UK courts have jurisdiction to hear such claims. In determining whether there is jurisdiction, however, the English court did have to examine substantive law issues. This makes the case of great interest to parent company liability, and, as parent company liability overlaps with supply chain liability, also to the latter. Continue reading “Parent Companies Are Not Parents, Subsidiaries Are Not Children”

Cross-border Insolvencies after Brexit: Views from the United Kingdom and Continental Europe

A recent paper of the Centre for International Governance Innovation and the British Institute of International and Comparative Law examines the consequences of Brexit for cross-border insolvencies. The conclusion of the paper reads as follows:

Whatever the outcome of the Brexit negotiations might be, it is possible that the United Kingdom will lose at least part of its attraction as a restructuring and insolvency hub for the remaining member states of the European Union.

Swiss Referendum on Implementing Supply Chain Liability

a post by guest blogger Penelope Bergkamp

Following a clear trend, Switzerland is now also considering proposals to hold  Swiss companies liable for environmental damage and human rights violations in their supply chains. Possibly inspired by the French Corporate Duty of Vigilance Law, the Swiss Coalition for Corporate Justice (SCCJ) launched the Responsible Business Initiative (“RBI”) in 2015. The RBI involves a citizens’ petition to amend the Swiss Federal Constitution to impose “appropriate due diligence” obligations on Swiss companies in  accordance with  their responsibilities under the UN Guiding Principles, along with liability for breaches by their subsidiaries. In response to the RBI, the Swiss Senate adopted a somewhat narrower, less ambitious proposal. Pursuant to Article 139 of the Federal Constitution, the Swiss people will be asked to vote on the RBI in a popular referendum

This post discusses the RBI and highlights the key differences between the RBI and the Senate proposal. First, the background to the RBI proposal is briefly reviewed. I will then turn to the procedural and substantive provisions of the RBI. Finally, the international private law aspects of the proposal will be analyzed. Continue reading “Swiss Referendum on Implementing Supply Chain Liability”

Heremans Lectures 2018: “Judicial Analytics and The Great Transformation of American Law” – Professor Daniel Chen (Toulouse School of Economics) at KU Leuven

Opening Lecture of the Heremans Lectures 2018 on 26 March 2018 (11 am)

The 2018 Heremans Lectures in Law & Economics at KU Leuven will be delivered by Professor Daniel Chen of the Toulouse School of Economics. The lectures will investigate a set of ideas related to legitimacy in law, how to formalize recognition-respect theory, and what it means for legal institutions, actors, and judges to be indifferent, such that it violates our notion of justice. The lectures will investigate how economic theory, experiments, causal inference, and machine learning can shed light on these issues.

The Inaugural Lecture will take place on 26 March 2018 at 11:00 am in the University Halls at Naamsestraat 22, 3000 Leuven, Belgium and is titled:

Judicial Analytics and The Great Transformation of American Law

Continue reading “Heremans Lectures 2018: “Judicial Analytics and The Great Transformation of American Law” – Professor Daniel Chen (Toulouse School of Economics) at KU Leuven”

Insolvency proceedings and human rights

In its judgment of 11 January 2018 in the case of Cipolletta v. Italy, the European Court of Human Rights held that there had been a violation of Article 6 § 1 (right to a fair hearing within a reasonable time) of the European Convention on Human Rights and a violation of Article 13 (right to an effective remedy). Continue reading “Insolvency proceedings and human rights”