Client Success: The Court of Appeal in Łódź upheld the prohibition on asset disposal by a limited liability company in liquidation.

In a limited liability company operating in the manufacturing sector, a conflict arose between the majority and minority shareholders concerning the distribution of remaining company assets following the cessation of business activity. The majority shareholder, despite the company having invested millions in developing window and door systems suitable for sale across various European markets, claims that these systems were never fully developed by the company. He asserts that “there may have been some drawings,” but the systems were never completed. Nevertheless, through another company he owns, he has been selling windows and doors based on those very systems in a different country.

The minority shareholder – a client of the firm – provided the company with several letters of intent from leading domestic and European entities interested in purchasing the company’s assets, including the developed window and door systems. The liquidator, who is also the CEO of the majority shareholder, did not respond to any of these interested parties. Instead, he convened a shareholders’ meeting with an agenda including the sale of the company’s assets at a price no lower than their book value. At the meeting, the representative of the majority shareholder voted in favor of this resolution and against the minority shareholder’s (our client’s) proposal to sell the assets through a public auction in light of the multiple expressions of interest.

Under these circumstances, the Regional Court in Łódź granted interim relief to the firm’s client by suspending the effectiveness of the resolution approving the sale of the company’s assets and imposed a ban on the disposal of specific company assets—including the defined window and door systems—under penalty of PLN 200,000 for each breach. The court emphasized the risk that the liquidator, who is also the president of the majority shareholder, could transfer assets to related parties.

The Court of Appeal in Łódź, in its decision dated January 9, 2020, upheld the interim relief granted to the minority shareholder.

The firm’s client was represented in obtaining and maintaining the injunction by legal advisor Wojciech Bokina, attorney Maciej Wisławski, attorney Katarzyna Sawicka, and lawyer Tomasz Kiernożycki.