Litigation, Luther SA updates
Luxembourg
Contributed by Luther SAShareholder dispute: court cancels capital increase due to breach of preferential subscription right
- Luxembourg
- 15 December 2020
In a notable decision, the Luxembourg District Court cancelled a company's capital increase on the grounds of a breach of the preferential subscription right of one of its shareholders. The decision gives interesting insight into the convening process for shareholders' meetings, the legal qualification of a debt contribution and its consequences, the outcome of a breach of a preferential subscription right and the prescription period applicable to the cancellation of shareholder decisions.
Luxembourg District Court rules on company wrongdoing as ground for piercing corporate veil
- Luxembourg
- 13 October 2020
The Luxembourg District Court recently ruled that a wrongful action committed by a company in the context of third-party attachment proceedings was justification to pierce the corporate veil. The decision confirms that the often-difficult task of proving that a company is fictitious is no longer the only possible way in which to thwart a debtor's fraudulent manoeuvres.
Unforeseeability theory developments in aftermath of COVID-19 crisis
- Luxembourg
- 04 August 2020
To counterbalance the negative economic impact that the COVID-19 lockdown measures have triggered, Luxembourg has introduced several regulatory and legislative measures to limit or at least mitigate the financial difficulties that many businesses may face in order to avoid bankruptcy. This article highlights the unforeseeability theory, which has not been used much in previous case law, but could be useful in the context of the unfolding COVID-19 pandemic.
Impact of COVID-19 on contractual obligations: force majeure and case law
- Luxembourg
- 05 May 2020
Due to the unprecedented health crisis brought about by COVID-19, many economic actors are facing the impossibility of fulfilling their contractual obligations or do not wish to honour them because they are no longer commercially viable. In the absence of specific material adverse change clauses, one possibility offered by Luxembourg law is the legal concept of force majeure. This article looks at the lessons which can be learned from the available case law in this respect.
District court rules on interpretation of minority actions
- Luxembourg
- 10 March 2020
In a notable case, the Luxembourg District Court ruled on the requirements for bringing minority actions and whether a broad interpretation thereof is possible. The judgment exposes the common lack of legal recourse available to shareholders who hold equal parts in a company. Whereas majority shareholders can impose their will at general assemblies and minority shareholders can commence minority actions, the possibility for equal shareholders to take similar action would lead to a problematic stalemate.
