The decision of the Paris Correctional Court in the case of Sidel is a legal change; but up to what point Last week, the ex-dirigeants of the Group of machines manufacturer of plastic packaging have been sentenced to suspended prison sentences and heavy fines for inaccurate accounts presentation and dissemination of false information ("Les Echos" from September 13). More surprising, the judges of the 11th House acknowledged the existence of a collective harm associated with these offences and have chosen to compensate 700 shareholders who were worn civil party on a lump sum basis (10 euros per share). This is not a first 5 business have already allocated damages to shareholders but the amount thereof and the number of committed shareholders remained until then symbolic. At a time when the Government plans to introduce a group action in French law (a very diluted form of "class action" American), the decision of the Court is part of a heavy tendency of the authorities to punish more severely the defects of transparency in the accounts of companies.
Legal contractions
Several cases are coming: the record Regina Rubens will be presented to the 11th Chamber of the Paris Correctional Court, on 27 October, Eurotunnel in April 2007, others are still in the offices of the judges of instruction, as Vivendi, EADS... However, this decision mark a true reversal of jurisprudence Difficult to say because the judges are not comfortable and fail to diagnose the liability of the company at the price of sometimes surprising legal contractions. "Sidel is a particular case to the extent where the fault had been previously established and sanctioned by the COB, penalty upheld on appeal." "Moreover, the company itself, in the transaction agreement with shareholders represented by Deminor cabinet had negotiated with Sidel compensation of 20 euros per share, Editor's note, agreed to compensate the holders, thus acknowledging harm", recognizes Colette Neuville, President of the Association for the defence of minority shareholders (Adam), representing a group of minority shareholders in this case almost equally with the Association for the defence of small active carriers (Appac).
Clarify their thinking
For a long time, the Court of cassation considers that the shareholders are not entitled to seek the remedy of own prejudice in the case of a tort committed by leaders including jurisprudence on abuse of social goods (1). Indeed, "for the High Court, in this case, it is society which is directly a victim and not the shareholders", note the criminal lawyer Philippe Goossens. To retain the action of the Adam and the Appac, judges of the 11th House jointly retain responsibility for the company and its ex-dirigeants. "Recognizing, in this case, the existence of direct harm to shareholders independent of the injury suffered by the company, the Court opens the way to shareholders-orchestrated mass action", note Nicolas Molfessis, Professor of law at Paris-II. Remains a problem: how to calculate damages The judges give no indication and hold 10 euros without any known how they calculated this compensation. "This mass litigation makes difficult the fixing of the harm of each shareholder", recognizes Alain Génitau, counsel for the Adam. In any event, judges must quickly clarify their thinking. There are chances that the company decides to appeal and Adam should follow it on a provisional basis.
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