Extract
[...] holds 5,100, Dominic B. owns 4,000, and Ketchum holds 900. Concerned by the two capital increases listed on the agenda of the extraordinary general meeting of April Ketchum questions both the consequences of these operations on his participation in the company's capital and the rights and remedies available to him to preserve his interests in the face of these measures (II). I. The effect of the capital increases on Ketchum's situation Ketchum questions the effects of capital increase and capital increase on his situation within the SA. [...]
[...] Case law has already sanctioned capital increases aimed at diluting the minority shareholder's participation solely to exclude them, particularly when a significant influx of money for the company is imminent3. Given this, if the capital increase responds to a legitimate financing need of the company, the contradiction to the social interest and the abuse of majority would be difficult to establish. On the other hand, if the suppression of the preferential subscription right is not justified by objective economic motives and aims solely to exclude Ketchum to the benefit of Danny B., the abuse of majority could be characterized. [...]
[...] In addition, in the event of a capital increase in favor of a third party, and if the partners do not fully exercise their preferential right of subscription, a new partner could enter the company, which would modify the relationships between partners and decision-making in the general meeting. Effects of Capital Increase The company's share capital, following Capital Increase is set at 1,500,000 euros, corresponding to a total of 15,000 shares. Capital Increase if approved, will bring the share capital to 3,000,000 euros for 30,000 shares. Ketchum will be deprived of its preferential right of subscription in the context of Capital Increase resulting in further dilution of its participation. [...]
[...] However, if he wishes to retain his shares and limit the effects of dilution, Ketchum could consider negotiating a shareholders' agreement with the other associates before the implementation of the projected capital increases, including in particular: a non-dilution clause ensuring the maintenance of Ketchum's participation percentage in the event of future capital increases or specific guarantees protecting his minority shareholder rights, such as a veto right on certain decisions. Negotiating such an agreement could allow Ketchum to preserve its position within the company and maintain a relative influence, despite the planned increases. A negotiated approach, based on a constructive discussion with the other associates, could thus constitute a beneficial solution for Ketchum. [...]
[...] During the Increase No. 2 Regarding the Increase No the agenda sent to the shareholders provides for the suppression of the preferential subscription right to reserve the capital increase for Danny B. In this regard, Articles L.225-135 and L.225-138 of the Commercial Code provide that the extraordinary general meeting may decide to suppress the preferential subscription right during a capital increase in order to reserve it for a person specifically designated. This person may, however, not participate in the vote. [...]
