A team of lawyers from Raczynski Skalski Radcowie Prawni Adwokaci Sp.p. in Warsaw successfully conducted a two-instance proceeding related to the enforcement of a client’s claim against a company based in Warsaw for shares not bought back by the company in contravention of a previously concluded conditional share repurchase agreement (so-called buy-sell back). As a result of the Legal Firm’s actions, the District Court for Warsaw-Wola in Warsaw, 1st Civil Division, awarded the entire amount due, together with interest and litigation costs, and the District Court in Warsaw dismissed the defendant company’s appeal. Thus, the judgment is final.
In the facts of the case, the client obtained information that there was an opportunity to purchase shares with repurchase at a fixed price, giving investors the opportunity to earn a “guaranteed” 12% per year. The purchase price of the shares was: PLN 3.60 with an option to repurchase 12 months after allocation at a price of PLN 4.03. In the case of this agreement, the debtor, together with the second guarantor of the investment, undertook to repurchase the shares if two conditions were met – the shares or rights to shares would be traded on an organized market for no less than 6 months, and the trading price, calculated as the average of the closing prices of the last 10 sessions, before the deadline would be no less than PLN 4.03.
The client found the above offer favorable, as he was interested in a safe investment, and thanks to the presence of two conditional share repurchase underwriters, it appeared to be such.
After meeting both repurchase conditions, i.e. the shares had been traded on the market for more than 6 months and the trading price, calculated as the average of the closing prices of the last 10 sessions, before the deadline was below PLN 4.03, the Client applied for repurchase of the purchased shares.
In response, the guarantors of the conditional repurchase of shares refused to comply with the request, citing, among other things, the provisions of the Commercial Companies Code.
Eventually, the District Court for Warsaw-Wola in Warsaw, 1st Civil Division, awarded the entire amount due from the defendant company to the plaintiff, together with interest and litigation costs, thus agreeing with the plaintiff’s position. On February 15, 2024, the District Court in Warsaw, 5th Civil Appeals Division, at a closed session, dismissed the defendant company’s appeal, awarding it the costs of the appeal proceedings.
The case was handled by the law firm’s team led by attorney Judyta Garwacka – Polisiak.
