Equity – Governance – Management
Mediation is a highly effective tool for anticipating or resolving crises, deadlocks or impasses in the areas of equity, corporate governance and management: it is in the interests of the companies to resolve them immediately.
Disputes between shareholders or holders of securities:
Resolution of financial or agenda disputes between shareholders, bondholders and other holders of securities (bonus shares, stock options, BSPCE, BSA, etc.)
Taking into account the specific features of different types of shareholders – industrialists, investment funds, founders, successors, family offices, etc.
Application of shareholders’ agreements or partners’ agreements
Performing sharehoders and other holders’ right to information
Taking into account the role of representatives of security holders (representants de la masse), court-appointed special purpose trustee (mandataire ad hoc), court-appointed administrators (administrateur provisoire) and other court-appointed representatives.
Examples:
Resolution of a shareholders dispute within a financial institution
Conventional mediation✓ European asset management group, €500M in revenue
✓ Holding company majority founders vs. executive minority shareholder
✓ Dispute over interpretation of shareholders’ agreement: buy or sell clause, clause setting sale price between €25m and €50m
✓ Ongoing legal disputes: right to information, enforceability of shareholders’ agreement
Resolution of a dispute between two equal partners who were also managing directors in the food retailing sector
Conventional mediation✓ Personal disagreement between 2 managing directors and co-partners with 50% of the capital of a €12m turnover company
✓ Mutual refusal to exit the capital before their respective retirements in 10 years
✓ Disagreement over the value of the business (from €9m to €12m)
✓ Blockage of governance, competitive risk, suffering in the workplace
Resolution of a post-LBO dispute (leverage by-out) in the luxury watchmaking industry between shareholders and bondholders
Conventional mediation✓ Local investment funds and new management vs. selling founders and bondholders
✓ Acquisition of a leading B-to-B watchmaker, €50m turnover
✓ Dispute over cash and inventory levels at closing, as well as future EBITDA commitments
✓ Claim for fraud or warranty of liabilities, €22m at stake
✓ Finalization of reinvestment deal blocked, leading to financing shortfall
Corporate governance and management crises:
Anticipating governance difficulties in the event of a dispute between shareholders
Supporting management structures in the event of a change in shareholder ownership
Reorganization of management structures: management boards, supervisory boards, boards of directors, strategic committees, executive committees, etc.
Departure or repositioning of corporate officers: chairman and CEO, deputy CEO, managing director, co-managing directors, equal co-managing directors, etc.
Departure or repositioning of senior executives: employee managing directors, minority shareholder executives, etc.
Example:
Resolution of international contractual and shareholder disputes (joint ventures, IT services)
Conventional mediation✓ French software publisher vs. a distribution group in Eastern Europe
✓ Disagreement over the terms of liquidation and separation of activities between partners
✓ Litigation over minority shareholders’ right to information
✓ Litigation over the distribution of dividends and the fate of royalties
✓ Litigation over the termination of corporate offices
✓ Stake: €15M
Resolution of a dispute between shareholder-managers in the field of cybersecurity
Conventional mediation✓ Leading French encryption group, €50m turnover
✓ Chairman and majority shareholder vs minority CEO
✓ CEO resigns
✓ Majority shareholder fails to enforce buy-out clause in shareholders’ agreement due to lack of financing
✓ Dispute drags on, risk of governance deadlock
Resolution of a dispute between two managing directors who were also equal partners in the food retailing sector
Conventional mediation✓ Personal disagreement between co-managing directors and co-partners with 50% of the capital of a €12m turnover company
✓ Mutual refusal to exit the capital before their respective retirements in 10 years
✓ Disagreement over the value of the business (from €9m to €12m)
✓ Blockage of governance, competitive risk, suffering in the workplace
Labour relations
Relationship difficulties between senior executives and managers / N and N+1
Post-reorganization functional difficulties between departments/employees
Changes to the employment contract, termination by mutual consent of employment contract, redundancy, taking note (prise d’acte) of employment contract termination
Resolving situations of exposure to psycho-social risks – harassment, discrimination, etc.
Retirement issues: career development, retirement, prejudice to retirement in the event of conflictual or non-mutual termination, etc.
Example:
Resolution of a dispute between an employer and a senior manager, employee and shareholder in the banking sector, involving various litigation procedures for harassment, discrimination and dismissal
Conventional mediation✓ Banking sector
✓ Litigation on the grounds of harassment, union discrimination and exposure to psycho-social risks
✓ Negotiation of departure taking account of retirement prejudice
✓ Stake: €3m
Resolution of a dispute between a dismissed operations manager and his former employer in the catering sector
Judicial mediation✓ Dispute over restaurant strategy and organization
✓ Refusal of a proposed mutual termination agreement
✓ Work-related accident, claim arising from safety obligation, possible occupational illness
✓ Claim for additional overtime pay
✓Dispute over redundancy for economic reasons
✓ Stake: €200,000
Resolution of a dispute between a dismissed operations manager and his former employer in the catering sector
Judicial mediation✓ Dismissal for professional inadequacy
✓ Employee has long service
✓ Stake: €500,000
M&A, Private Equity, investissement
Mediation is a highly effective tool for anticipating or resolving disputes arising from equity transactions, any resulting litigation being prejudicial to both parties (reputation, implementation of expert appraisals delaying proceedings, accounting provisions, etc.):
Post-acquisition, post-LBO (leverage by-out), post-merger disputes
Difficulty in executing vendor credit facilities
Enforcement of asset and liability guarantees
Claims for compensation or nullity of a transaction on the grounds of fraud
Financial appraisals for valuation or inventory purposes
Reinvestment transactions
Example:
Resolution of a post-acquisition dispute between construction companies
Mediation agreement✓ Listed international building and public works group vs family shareholders of a regional building and public works group, bound by post-sale commercial leases
✓ Claim for fraud or warranty of liabilities, €3m
✓ Refusal to execute a vendor loan due to expire soon
✓ Regional reputational issue, inheritance issue
Resolving a post-acquisition dispute in the construction and public industry
Judicial mediation✓ Buyer of a family construction equipment leasing company vs sellers
✓ Litigation over earn-out, stake €300,000
✓ Litigation over nullity of sale for fraud and damages, stake €1.5m
Resolution of a post-LBO dispute (leverage by-out) in the luxury watchmaking industry
Conventional Mediation✓ Local investment funds and new management vs. selling founders and bondholders
✓ Acquisition of a leading B-to-B watchmaker, €50m turnover
✓ Dispute over cash and inventory levels at closing, as well as future EBITDA commitments
✓ Claim for fraud or warranty of liabilities, €22m at stake
✓ Finalization of reinvestment deal blocked, leading to financing shortfall
Commercial relations
Unfair breach of contract
Breach of an established commercial relationship
Significant imbalance
Intellectual property
Distribution agreements, joint-ventures, concessionaires, commercial agents, etc.
Regulated professions: doctors, pharmacists, chartered accountants, notaries, law commissioners, architects, lawyers, etc.
Example:
Resolving a contractual dispute - IT services
Judicial mediation✓ European IT services group vs. an international insurance company
✓ Dispute over terms of renewal of services contract
✓ Dispute over intellectual property of developments
✓ Summons for judicial termination of contract and compensation, €8m
✓ Mediation in English language
Resolving a contractual dispute in the fashion and luxury industry
Judicial mediation✓ European manufacturer of luxury goods vs. one of its French distributors
✓ Litigation seeking compensation for the brutal breach of a distribution agreement
✓ Litigation seeking compensation for unpaid commissions and stock discrepancies
✓ Stake: €500,000
✓ Human issue (long illness of the manager, majority shareholder of the distributing company)
Resolving commercial and shareholder disputes - Luxury real estate
Conventional mediation✓ Regional estate agency group vs minority shareholder and founder of a partner and competitor company
✓ Conflicting commercial and ownership co-existence
✓ Unpaid commissions, unfair competition, €500,000 at stake
✓ Ongoing protective legal proceedings