I believe that the shareholder law suites will not take precedence to creditors because yesterday
while doing research I ran into a law wording "Piercing the corporate veil"
The basic definition:
Piercing the corporate veil refers to a situation in which courts put aside limited liability and hold a corporation's
shareholders or directors personally liable for the corporation's actions or debts.
Veil piercing is most common in close corporations.
https://www.law.corn..._corporate_veil
Interesting enough this also applies in Dutch Law:
https://business-net...etherlands.html
So looks like to me if the shareholders force their hand then creditors may use this to their advantage.
All I can see is lots of arguments coming up and the stupid shareholders going to make lawyers reach and still not going
to get much and would have made more money buying more shares at this price and let the company grow.
In my view investors were greedy then so blinded by MJ that they could not see reason, now greedy again so blinded that
cannot see the real winners going to be professional lawyers that all they do is jump from company to company to make
money from class actions.
Brings back memories of Corporate Law and Governance.
But I do not think that it is a correct interpretation of piercing the corporate veil.
Normally a juristic entity (legal persona) has a separate legal standing, and can sue or be sued in its own capacity. The liability of the business is then limited to what the business can settle (typically the NAV). The directors or other officers cannot be sued or held liable in the private capacity.
Piercing the corporate veil relates to the position where a director acted fraudulently. The Court could then pierce the corporate veil and not limit the remedies available to the injured party to only the assets of the company, but could via an order of court could hold the delinquent directors responsible in their personal and private capacity. In very rare occasions the delinquent director could be held liable for criminal negligence as well.
The above however, does not absolve the company from liability.
Steinhoff will be held accountable. There is no doubt of this. However the co-respondents - all the auditors and various specialists engaged prior to Dec 2017 will be held negligent. There are 43 co-respondents.
In other words, although Steinhoff will be held accountable for the lawsuits, they will in turn jointly and severally hold their own auditors etc accountable in their (Steinhoff's) lawsuits. This case will play out in the courts for a very, very long time.
Best Regards
Captainfrom82
Edited by Captainfrom82, 24 May 2019 - 03:59 PM.
