In a judgment dated 9 June 2016, the Constitutional Court ruled that there is a gap in companies' legislation regarding capital reductions in private limited liability companies ("besloten vennootschap met beperkte aansprakelijkheid"/"société privée à responsabilité limitée"). Creditors of public limited liability companies ("naamloze vennootschap"/"société anonyme") whose claims are subject to a judicial procedure or arbitration can require additional security. Creditors of private limited liability companies which are in a similar situation do not enjoy such a right. The Court finds that this situation is discriminatory.
The Companies Code provides for a mechanism of creditor protection in case of capital reduction. For claims that arose but which have not yet fallen due before the publication of the decision to reduce the capital, creditors can demand security within two months following that publication.
In an act of 22 November 2013, the legislator put an end to the uncertainty regarding the scope of the creditor protection. The Court of Cassation had found that a claim based on a judgment at first instance which was not provisionally enforceable was not a certain claim, hence excluding the creditor of such a claim from benefiting from the protection. Therefore, the Companies Code was amended in 2013 to provide that, for a public limited liability company, creditors whose claims were subject to a judicial procedure or arbitration before the general meeting of shareholders deciding on the capital decrease can also demand additional security. The legislator seems to have forgotten to also make these modifications for other company forms where a same protection exists, such as the private limited liability company and, in respect of its fixed capital, the cooperative company with limited liability ("coöperatieve vennootschap met beperkte aansprakelijkheid"/"société coopérative à responsabilité limitée").
The Constitutional Court has now held, in a judgment dated 9 June 2016, that, although the distinction in the treatment of the creditors of public limited liability companies and the creditors of private limited liability companies is based on an objective criterion, there is no reasonable justification for this distinction. Therefore, the lack of rules in this regard for private limited liability companies is discriminatory and is not compatible with articles 10 and 11 of the Constitution.
The scope of this judgment is confined to private limited liability companies. However, as mentioned, similar problems also arise for cooperative companies with limited liability. The legislator has some work to do.
Authors:
Claire Fornoville
Marieke Wyckaert
