The acquisition of shares by the company following the refusal of approval of a transfer to a third party

Cass, Com, January 4, 2023, n°21-10.035

In its decision of January 4, 2023, the Court of Cassation affirms that a company which refuses to approve the transfer of a partner’s shares to a third party, and which requests the sequestration of the shares as well as the appointment of an expert to determine their value, is obliged to repurchase these shares.

1. The legal framework

Article 1843-4 provides that in the event of the transfer of a partner’s corporate rights or the repurchase of such rights by the company – without their value being determined or determinable – the value may be determined by an expert in the event of disagreement between the parties.

2. The facts

The articles of association of a simplified joint stock company (SAS) stipulated that in case of refusal of approval, the company had to, within a period of two months from the notification of the decision of refusal, either have the shares repurchased by one or several partners, or proceed to this repurchase itself. The redemption price was then to be fixed by mutual agreement, and failing that, under the conditions provided for in Article 1843 of the Civil Code.

Furthermore, if the redemption was not completed within two months, the approval was considered to be given.

In this case, the company refused the approval of a transfer of shares from a partner to a third party, and requested the sequestration of the shares held by the partner, as well as the evaluation of their value by an expert, on the basis of article 1843-4 of the Civil Code.

The partner then asked the company to pay him the transfer price determined by the expert. The company refused his request, arguing that if the shares were not redeemed within the two-month period, the transfer was presumed to be approved.

The partner then summoned the company in order to obtain the lifting of the sequestration and the payment of the transfer price of his shares.

The Court of Appeal of Papeete rejected his request in a decision of October 8, 2020, on the grounds that in the absence of an agreement between the partner and the company on the purchase price, or at least on the principle of an appraisal, only the approval of the initial project was considered as given.

3. The opinion of the Court of Cassation

The Court of Cassation overturned the appeal decision, determining that by requesting the sequestration of the partner’s shares and the appointment of an expert to determine their value, the company had manifested its intention to acquire the shares at the price set by the expert, so that an agreement had been reached on the matter and on the methods for determining the price.

Indeed, the issue of the offer was deduced from the sequestration of the shares, which constitutes an offer on the thing, and from the request for the appointment of an expert, which constitutes an offer on the methods of determining the price. The consent of the parties is then tacit.

The company cannot therefore retract its decision by invoking a tacit approval due to the non-repurchase of the shares within the statutory time limits.