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The provision of a put option and a contractual mechanism constitutes an unacceptable derogation and circumvention of the prohibition of a leonine pact

Court of Appeal of Milan, 13 February 2020. Pres. Meroni. Est. Silvia Giani

date: 25.06.2020
Area: Corporate, M&A

With the ruling in question, the Court of Appeal of Milan held that the provision of a put option and a contractual mechanism, to exempt the shareholder from participating in the losses up to the hypothesis of zeroing the value of the shareholding as a consequence of the full loss of the share capital, constitutes a forbidden hypothesis of derogation with the consequent circumvention of the prohibition of the leonine pact.

The provision of a put option and a contractual mechanism constitutes an unacceptable derogation and circumvention of the prohibition of a leonine pact

Court of Appeal of Milan, 13 February 2020. Pres. Meroni. Est. Silvia Giani

date: 25.06.2020
Area: Corporate, M&A

With the ruling in question, the Court of Appeal of Milan held that the provision of a put option and a contractual mechanism, to exempt the shareholder from participating in the losses up to the hypothesis of zeroing the value of the shareholding as a consequence of the full loss of the share capital, constitutes a forbidden hypothesis of derogation with the consequent circumvention of the prohibition of the leonine pact.