On 17 September 2014, the Court of Justice of the European Union (the "ECJ") handed down a judgment on the request for a preliminary ruling on the interpretation of Article 1(2)(h) and Article 3(1) of Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (the "Prospectus Directive"). It did so in the context of a forced sale of securities.

On 16 July 2003, parties had entered into an agreement to transfer shares in a number of companies. Following disputes between the parties in relation to the performance of this agreement, the Court of Appeal of 's-Hertogenbosch ordered in a judgment of 30 November 2010 that the purchasers should pay EUR 500,000 to the sellers as an advance on the price of the shares. In order to ensure execution of this payment, the sellers effected a compulsory attachment of share certificates held by the purchaser and requested the District Court of Breda to order the sale and the transfer of those share certificates. In its judgment of 27 December 2010, the District Court of Breda ordered the sale and transfer of the share certificates in a public sale and held that the obligation to publish a prospectus, in accordance with Article 5.2 of the Dutch Law on financial supervision (the "Law"), did not apply on the grounds that the aim of the Law "was not to protect purchasers who deliberately assume a risk in a forced sale with a view to making a profit but only to protect investors and savers against dishonest offers, inadequate information and incompetence".

After confirmation of this judgment by the Court of Appeal of 's-Hertogenbosch, a further appeal was brought before the Supreme Court of the Netherlands. That court, in turn, requested that the ECJ determine whether the obligation to publish a prospectus also applies to the forced sale of share certificates.

In its analysis, the ECJ stated that the purpose of the Prospectus Directive is "to ensure investor protection and market efficiency" and that the publication of a prospectus is intended "first, to enable investors to assess the risks linked to the offer of securities to the public or the admission of those securities to trading, so as to enable them to make an informed decision, and, second, to ensure that the proper functioning of the markets concerned is not hindered by irregularities". Therefore, the nature of the transaction underlying the decision to proceed with the sale of securities in the context of a forced sale is significantly different from that contemplated by the Prospectus Directive. Forced sales are only intended to satisfy the rights of the attaching creditor rather than participate in an economic activity on the securities market.

The ECJ further stressed the fact that an obligation to publish a prospectus prior to a forced sale would (i) impede the objective of "swiftly and effectively satisfying the debt owed to the creditor"; (ii) delay the forced sale and the payment of the creditor; (iii) give rise to additional expenses for preparing the prospectus; and (iv) create practical difficulties.

The ECJ concluded that the obligation to publish a prospectus prior to any offer of securities to the public, as imposed by Article 3(1) of the Prospectus Directive, does not apply to a forced sale of securities.

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