THE BOTTOM LINE
- Business continuity trumps director disputes: In a deadlocked 50/50 company, a Dutch court prioritized keeping the business running over restoring full powers to a director who had been locked out, especially when the other director was handling daily operations.
- The right to information is not a right to control: While a director cannot be kept completely in the dark, a court may grant read-only access to financial systems rather than full executive control (e.g., bank cards, payment approval) to prevent a corporate stalemate from escalating into operational paralysis.
- Shared blame weakens claims for drastic relief: The court was unwilling to suspend one director and hand power to the other when it found both parties were complicit in creating the company’s financial and administrative problems. This signals that courts will scrutinize past conduct before intervening.
THE DETAILS
This case involved a classic 50/50 joint venture that had broken down. The two holding companies, each owning 50% and acting as co-directors, were in a complete stalemate. One director (the plaintiff) found themselves locked out of the company’s financial and administrative systems by the other (the defendant). The plaintiff sought an emergency injunction to suspend the defendant, appoint a special representative, and regain full access and control. This forced the court to weigh the rights of a director against the immediate survival of the business they are meant to govern.
The court’s decision hinged on pragmatism and a clear-eyed assessment of who was actually running the company. It found that the defendant was, and had been for some time, the one primarily managing day-to-day operations. Critically, the court also concluded that both parties shared responsibility for the company’s troubled state, citing a history of poor administration and excessively high personal loan accounts owed to the company by both sides. Given this shared blame, the judge was unwilling to take the drastic step of suspending the operational director and handing the reins to the plaintiff, fearing it would simply swap one set of problems for another and destabilize the business.
Ultimately, the court forged a middle path. It denied the most far-reaching requests—suspending the director and granting the plaintiff a veto over payments—as these measures would have brought the company to a standstill. However, it upheld the plaintiff’s fundamental right to information as a co-director. The defendant was ordered to provide the plaintiff with digital, read-only access to the company’s bank and accounting software. This solution ensures transparency and oversight for the excluded director without giving them the power to interfere with daily operations, effectively preserving the company’s ability to function while signaling that the parties must seek a more permanent solution through negotiation, mediation, or a full proceeding at the specialized Enterprise Chamber.
SOURCE
Source: Rechtbank Rotterdam
