Member News | Shareholder conflicts Webinar by COBALT Legal

On 26 October, 10 am, COBALT law firm kindly invites you to watch the live webinar Shareholder conflicts: (un)forced sale of shares.

The pandemic, war, inflation and energy crisis have created a so-called perfect storm in the economy, which disrupts all branches of business, complicates supply chains, and increases the risk of partner defaults. It is not surprising that the crisis also affects business owners.

During the webinar, we will talk about shareholder disagreements and the redemption of securities.

Lithuanian laws provide that the holders of 1/3 of the shares in a private limited liability company may apply to the court for an order obliging the other shareholder or shareholders to buy out the plaintiff’s shares or to sell the latter’s shares.

Such forced sale of shares is considered incompatible with the requirements of the principle of inviolability of the ownership. However, sometimes shareholders’ conflicts reach such a scale and intensity that not only conflicting business owners are affected. The resulting legal deadlock leads to strategic decisions no longer being taken regarding the company’s operations, with the risk of inevitable business losses, termination of employment relationships with unmotivated employees, dissatisfied/unhappy customers and suppliers, and even damages claims against the manager due to the loss of business. In order to avoid all these negative consequences, the legislator has decided to allow the court, in exceptional cases, to rule on forced redemption or sale of shares.

Therefore, during the webinar, we will discuss the specificities of forced redemption proceedings and the issues that usually arise during such proceedings, and consider how the share price is determined during such proceedings. We will also discuss who should buy back the shares in the event of a conflict – a large shareholder, a small shareholder, or maybe even a third party unrelated to the conflict, such as a financial investor?

Moreover, you will learn whether it is possible to buy a business where all or part of the share price is paid with funds borrowed or otherwise obtained from the target company. In the panel discussion planned at the end of the event, the speakers will try to find an answer to this question and will discuss this topic in order to clarify the legality of a company’s share purchase.

SPEAKERS:

Šarūnas Skyrius, Partner at Superia 

Elijus Burgis, Partner, Head of the Corporate Transactions Department at COBALT

Marius Inta, Partner, Head of Commercial Disputes practice group

IMPORTANT: before the start of the broadcast, please register at the following link >> http://cobaltlive.zoomtv.lt 

The webinar is free of charge. Webinar language – Lithuanian.

BROADCAST TIME: 26 October (Wednesday), 2022 at 10 am. 

The live broadcast will be shown by clicking on the following link: http://cobaltlive.zoomtv.lt 

We invite you to ask relevant questions during the live broadcast.