ECLI:NL:RBAMS:2025:1453

Uitspraak

JUDGMENT

AMSTERDAM DISTRICT COURT

Netherlands Commercial Court NCC District Court

Case number: C/13/747331

Judgment

5 March 2025

Claimant in the original claim

Defendant on the motion in the counterclaim:

WELTEN GROUP B.V.,

‘s-Hertogenbosch (the Netherlands)

represented by H.J. van der Baan, G. Straub, J.W. Snel and F.J. Smeets, lawyers,

Defendant in the original claim

Claimant on the motion in the counterclaim:

ONE TWO WORK B.V.,

Amsterdam (the Netherlands),

represented by T.S. Jansen, L.M. Veth, J. van Hemel and M. Nuijten, lawyers.

Joining parties in the original claim on the claimant’s side

1.
ARCH INSURANCE (EU) DAC

Dublin (Ireland)

2.
LLOYD’S INSURANCE COMPANY S.A.

Brussels (Belgium)

3.
AXIS SPECIALTY EUROPE SE

Dublin (Ireland)

4.
ZURICH INSURANCE EUROPE AG

as the legal successor to Zurich Insurance Plc Frankfurt (Germany)

represented by S. Derksen and I. Léger (member of the Paris Bar), lawyers.

The parties are referred to below as the Purchaser, the Seller and the Underwriters. The term ‘lawyer’ has the meaning as defined in Clause 3.1.1 NCC Rules of Procedure (NCCR).

1.Procedural history

1.1.

The proceedings to date are listed in the interim judgment given on the Seller’s motion for document disclosure on the original claim on 17 July 2024 (the ‘Interim Judgment’, publication number ECLI:NL:RBAMS:2024:4396).

1.2.

On 27 November 2024, the Underwriters submitted a motion to intervene under Article 217 Dutch Code of Civil Procedure (DCCP).

1.3.

On the same date, the Seller submitted its statement of defence against the original claim, including a counterclaim and a motion for document disclosure on the counterclaim.

1.4.

A case management hearing was held by videoconference on 2 December 2024.

1.5.

The Court gave directions on 4 December 2024. It allowed the Purchaser to submit a statement of defence on the motion to intervene and bifurcated the original claim and the counterclaim, except for the Seller’s motion in the counterclaim.

1.6.

On 18 December 2024, the Purchaser submitted its statement of defence against the Underwriter’s motion to intervene.

1.7.

On 20 December 2024, the Court granted the motion to intervene and denied the request for leave to appeal this decision.

1.8.

The Purchaser submitted additional exhibits by brief dated 31 December 2024.

1.9.

On 6 January 2025, the Purchaser submitted its statement of defence against the Seller’s motion for document disclosure on the counterclaim.

1.10.

On the same date, the Underwriters submitted a statement setting out their views on the original claim. They changed their position from intervening party (
tussenkomende partij) to a joining party on the Purchaser’s side (
voeging aan de zijde van eiseres in conventie).

1.11.

By brief dated 10 January 2025, the Seller submitted additional exhibits.

1.12.

On 13 January 2025, the Purchaser submitted a statement of reply to the Underwriters’ statement.

1.13.

In its letter dated 13 January 2025, the Seller objected to the Underwriters’ statement. The Court rejected the objection on 17 January 2025.

1.14.

On 17 January 2025, all parties submitted their pleading notes.

1.15.

On 20 January 2025, the Court held a hearing on the original claim and on the motion on the counterclaim (see the Court Record uploaded in eNCC on 30 January 2025). At the beginning of the hearing, the Court gave its reasons for its decision to allow the Underwriters to attend the hearing after its change in position from intervening party to joining party (on the Purchaser’s side).

1.16.

After the hearing, the Seller uploaded its revised pleading notes, as instructed by the Court.

1.17.

On 13 February 2025, the Purchaser and the Seller commented on the Court Record. The Court subsequently corrected the Court Record on some points.

1.18.

Judgment on the original claim and the motion in the counterclaim was set for today.

2.The facts

2.1.

The Purchaser is a special purpose vehicle established by Straco PE NV (Straco, a private equity firm, based in Belgium) for the acquisition, in February 2023, of all the Welten
HoldingB.V. shares from the Seller (the Transaction). Welten
HoldingB.V. is referred to below as the Group.

2.2.

The Seller is a subsidiary of One Two Capital Fund I Coöperatief U.A. which in turn is managed by One Two Capital B.V (OTC, a private equity firm based in the Netherlands). Prior to the Transaction the shares in the Group were held by the Seller (75%) and (indirectly) by [the CEO] Management B.V. (19%) and Stichting Administratiekantoor One Two Work (6%). Key management members of the Group own the majority of the certificates of the aforementioned “Stichting” (foundation) for the purpose of profit-sharing.

2.3.

The Group runs a staffing business in the financial sector, seconding employees to financial institutions, such as banks, insurance companies, pension funds and asset management firms. It consists of several operating companies: Welten Detachering B.V. (Welten Detachering), Dukers & [the CEO] Opleidingen en Advies B.V. (Dukers), BOLD People B.V. (Bold), and Carrierecafé Werving en Selectie B.V. (CarriereCafé). Until the beginning of 2024, the Group’s CEO was [the CEO] (the CEO) and the Group’s CFO was [the CFO] (the CFO).

2.4.

The sale of the Group was by “controlled auction”. Straco was admitted to the first phase of the bidding process by letter dated 31 October 2022. At this occasion, Straco was also provided with an electronic copy of the Information Memorandum. This memorandum included a reported EBITDA for the financial year 2022 (2022 EBITDA) of EUR 10,417,000, which after certain management corrections resulted in an adjusted EBITDA of EUR 12,533,000.

2.5.

Subsequently, Straco made a non-binding offer and the parties agreed on the parameters for the sale and purchase of all shares in the share capital of the Group by entering into the Term Sheet dated 23 November 2022. Key elements of the Term Sheet were:

 an effective date of 1 January 2022, meaning that the economic benefits and risks related to the Group would be deemed transferred to Purchaser with effect from and including 1 January 2022 (the Effective Date),

 an enterprise value of EUR 120,000,000 on a cash-and-debt-free basis which resulted in a purchase price of (i) EUR 105,000,000 payable at Closing and (ii) a deferred payment and conditional Earn Out of EUR 15,000,000,

 the purchase price equals the enterprise value adjusted for debt, debt-like items, cash and cash-like items as per the Effective Date,

 the purchase price was based on several assumptions, such as:

o the provision of accurate information regarding historic revenue, gross margin and EBITDA for the financial year 2021,

o a satisfactory due diligence on the latest estimate of the EBITDA for the financial year 2022, and

o a satisfactory due diligence on the approved budget for the financial year 2023,

 a “locked box mechanism”, where the purchase price was to be reduced by any unallowed cash ‘leakage’ between Effective Date and Completion.

2.6.

After signing the Term Sheet on 23 November 2022, the Seller created a virtual data room, including a Q&A feature. Part of the disclosed information was EY’s Financial Vendor Due Diligence Report dated 17 November 2022 (the VDD Report). In respect of the financials for 2022, this report included a reported EBITDA of EUR 10,630,000 and an adjusted EBITDA of EUR 12,746,000.

2.7.

Subsequently, the Purchaser engaged Deloitte to prepare its own financial and tax due diligence report (Top Up VDD), which did not identify any material findings.

2.8.

On 30 December 2022, the Purchaser and the Seller signed a Share Purchase Agreement (the SPA), which reads – in relevant part – as follows:

“(…)

2
Sale and transfer of the Shares

2.1

Sale

The Seller hereby sells the Shares to the Purchaser and the Purchaser hereby purchases the Shares from the Seller.

2.2

Transfer

The Seller shall transfer the Shares to the Purchaser free from any Encumbrance and together with all rights attaching to them at Completion in accordance with Clause 8, and the Purchaser shall accept the Shares from the Seller free from any Encumbrance and together with all rights and obligations attached to them at Completion.

2.3

Effective Date

Subject to the terms and conditions of this Agreement, the economic benefits and risks which are directly or indirectly related to the Shares shall be deemed transferred to the Purchaser with effect as from and including the Effective Date.

3
Purchase Price

3.1

Purchase Price

The purchase price for the Shares (the "Purchase Price") shall be an amount equal to:

(i) EUR 97,687,000, being the amount as identified as the equity value in Annex 3.1(i) (the "Initial Purchase Price");

plus

(ii) the Completion Compensation; minus

(iii) the Completion Leakage; plus

(iv) if applicable, a conditional and deferred payment (if any) that may become due and payable to the Seller as part of the Purchase Price and is to be calculated in accordance with Annex 3.1(iv) (the "Earn Out").

3.2

Payment

On the Completion Date, the Initial Purchase Price, plus the Completion Compensation, minus the Completion Leakage and minus the Reinvestment Amount (the "Completion Payment") will be paid by the Purchaser to the Seller in accordance with the Notary Letter. (…)

7
Pre-Completion undertakings

7.1

Conduct of business

7.1.1

Subject to Clause 7.1.3, the Seller, except with the prior written approval of the Purchaser:

(i) shall procure that each Group Company from the Signing Date until Completion:

(a) shall continue to operate its (part of the) Business as a going concern in a normal and prudent manner and will conduct its business in the ordinary course consistent with past practice in all material respects and no Group Company will do or agree to do anything which is outside the ordinary course of the business of such Group Company;

(…)

(f) will maintain all accounting and other records in the ordinary course; (…)

iii. change its accounting reference date or make any material change to the accounting practices and principles applied in the Annual Accounts (except for changes required by Applicable Law);

(…)

ix. make any material change to the organization or nature of the Business; and/or (…)

10
Warranties

10.1

Seller's Warranties

10.1.1

The Seller hereby represents and warrants (garandeert) that each of the Warranties are true, accurate and not misleading on the date of this Agreement and the Completion Date.

10.1.2

Each of the Warranties is separate and independent and, except as expressly provided to the contrary in this Agreement, is not limited by reference to any other Warranty.

10.1.3

The Seller acknowledges that the Warranties are material and the accuracy of the Warranties is essential to the Purchaser’s decision to enter into and pay the Purchase Price set out in this Agreement. The Warranties allocate between the Seller and the Purchaser the risk and costs relating to any facts or circumstances that may cause any of the Warranties to be untrue, inaccurate or misleading.

10.1.4

No representations or warranties, express or implied, have been given or are given by the Seller other than the Warranties.

(…)

10.1.6

The Seller shall not be liable in respect of any forward-looking forecasts, estimates, interpretations, analysis, projections, statements of intent or statements of opinion in relation to the period as from the Completion Date, which have been included in the Data Room in good faith, save as where they form part of the Warranties.

10.2

Liability for Breaches

10.2.1

Subject to the terms of this Agreement, in the event of a Breach, the Seller is liable towards the Purchaser and shall compensate the Purchaser for the Damages suffered or incurred by the Purchaser, or, at the Purchaser’s sole discretion, the Group Companies, as a result of such Breach (whereby Damages incurred by the Group Companies shall also be deemed Damages of the Purchaser).

10.2.2

The sole and exclusive remedy of the Purchaser for a Breach will be an action for Damages and the Purchaser waives its rights to claim specific performance (nakoming) or any other remedy.

11
Limitation of Seller’s liability

11.1

Remedy

The Seller shall not be liable in respect of a Breach, if such Breach is remedied by the Seller in full, at its own cost, to the reasonable satisfaction of the Purchaser after the expiry of fifteen (15) Business Days following receipt by the Seller of a written notice from the Purchaser in accordance with Clause 12.1.1.

(…)

11.4

Maximum liability

The liability of the Seller in respect of any and all W&I Claims shall not in the aggregate exceed an amount equal to EUR 1.

11.4.1

The aggregate liability for claims other than W&I Claims (e.g., such as Claims under the Specific Indemnities) of the Seller under this Agreement shall never exceed the Purchase Price actually received, excluding any liability for Leakage and/or claims under Clause 17, for which the Seller’s liability is uncapped.

11.5

W&I Insurance

11.5.1

The Purchaser's sole and exclusive recourse for any (a) Breach; or (b) for a payment under the Tax Indemnity (each a W&I Claim) shall be against the W&I Insurer under the W&I Insurance Policy, except (i) in respect of a Claim for Breach of a Fundamental Warranty to the extent not (fully) covered by the W&I Insurance Policy; and (ii) in the case of fraud (bedrog) on the part of the Seller. The Purchaser hereby irrevocably waives any right it may have to submit any W&I Claim against the Seller. The Seller shall not be liable for any W&I Claim to the extent such W&I Claim is not (fully) covered by the W&I Insurance Policy, except (i) in respect of a Claim for Breach of a Fundamental

Warranty to the extent not covered by the W&I Insurance Policy (for the avoidance of doubt: in such case the Seller shall only be liable for the part that is not covered by the W&I Insurance Policy); and (ii) in the case of fraud (bedrog) on the part of the Seller. For the avoidance of any doubt, the Seller will not be liable for any deductible or retention (eigen risico) or any other costs under the W&I Insurance Policy.

(…)

11.14

Fraud

Nothing in this Agreement shall operate to limit any liability of the Seller in case of fraud (bedrog) by such Seller in respect of the relevant Breach.

(…)

20
Miscellaneous

(…)

20.1

No rescission

Unless stated otherwise in this Agreement, the Parties waive their rights, if any, to in whole or in part annul (vernietigen), rescind (ontbinden) or partially rescind (gedeeltelijke ontbinding) this Agreement on the basis of article 6:228, article 6:265 or article 6:270 of the DCC.

(…)

20.13

Entire agreement

This Agreement sets out the entire agreement and understanding between the Parties in respect of the subject matter of this Agreement and supersedes any previous arrangements or agreements between the Parties. No Party will have any right or remedy against any other Party arising out of or in connection with any such preceding or concurrent agreement unless agreed otherwise herein.

21
Law and jurisdiction

21.1

Governing Law

This Agreement shall be governed by and constructed in accordance with the laws of the Netherlands.

21.2

Jurisdiction

The Netherlands Commercial Court in Amsterdam, the Netherlands shall have exclusive jurisdiction over a dispute arising out of or in connection with this Agreement.

2.9.

The SPA contains various Annexes, which will be cited in relevant part below.

2.10.

Annex 3.1(i) Initial Purchase Price Calculation

2.11.

Annex 3.1(iv) Earn Out (Earn Out Annex)

“(…)

1
Earn Out

1.1

Earn Out Payment

The Parties acknowledge and agree that, subject to Clause 1.2 of this Annex, the Seller may as part of the Purchase Price for the Shares, become entitled to an earn-out payment of a maximum of EUR 15,000,000 (the "Earn Out Payment").

1.2

Conditions Earn-Out Payment

1.2.1

The Seller shall be entitled to a pro rata Earn Out Payment of EUR 2.50 for each EUR 1 realized EBITDA of the Group in the financial year 2023 between EUR 14,000,000 and EUR 20,000,000. The Earn Out Payment shall be calculated on the basis of the following formula: Earn Out Payment = EUR 2.5 multiplied by (EBITDA in the financial year 2023 minus EUR 14,000,000), it being understood that the Earn Out Payment shall never exceed an amount of EUR 15,000,000.

(…)

1.3

Determination Earn Out Payment (…)

1.3.2

Ultimately on 1 August 2024, the Purchaser shall send to the Seller a final statement containing a detailed calculation and the calculated amount of the Earn Out Payment, together with a copy of the adopted audited annual accounts of the financial year 2023 (the “Earn Out Payment Calculation”). Following receipt of the Earn Out Payment Calculation, the Purchaser shall provide the Seller, upon first request, such information as reasonable requested by it and provide the relevant information relating to the preparation of the Earn Out Payment Calculation, in each case for the purpose of assisting the Seller in its review of the Earn Out Payment Calculation and the calculations contained therein.

(…)

1.3.4

The EBITDA shall be the EBITDA reported in the consolidated audited annual accounts of the Company for the financial year 2023, adjusted for the following items (…).

1.3.5

Within twenty (20) Business Days following the delivery to the Seller of the calculation of the Earn Out Payment Calculation, the Seller may notify the Purchaser in a written notice (the Dispute Notice Earn Out) of any item in the Earn Out Payment Calculation it wishes to dispute. The Dispute Notice Earn Out shall include the reasons for such dispute and a list of proposed adjustments, all substantiated in sufficient detail so as to allow proper assessment thereof by the Purchaser. Any line items not identified in the Dispute Notice Earn Out being in dispute will be deemed to be agreed for the purposes of this Agreement and will therefore be final and binding upon the Parties, save where

such line item should be changed as a consequence of the agreement or determination of a disputed line item.

1.3.6

If a Dispute Notice Earn Out is received by the Purchaser, the Parties shall use their best endeavours to agree the items disputed by the Seller within twenty (20) Business Days following the receipt of the Dispute Notice Earn Out by the Purchaser. If no Dispute Notice Earn Out is received by the Purchaser within the set time limit of twenty (20) Business Days or the Seller has notified the Purchaser that there are no items it wishes to dispute, the Earn Out Payment Calculation shall be the Earn Out Payment and will be final and binding to the Parties.

1.3.7

If any item disputed in a Dispute Notice Earn Out is not agreed between the Parties within twenty (20) Business Days following the receipt of the Dispute Notice Earn Out by the Purchaser, the Expert Procedure will apply.

(…)

2
Earn Out Covenants

2.1

Earn Out Covenants

2.1.1

The Seller acknowledges and agrees that, after Completion, the Company (and the other Group Companies) will be subject to the corporate control and supervision of the Purchaser, and the Purchaser is entitled to exercise such corporate control and supervision of the Group in a manner serving the long-term best interests taking into account the interests of the Seller in relation to the Earn Out.

2.1.2

On a monthly basis, the Purchaser shall provide the Seller for a copy of the management accounts of the Group Companies of the preceding month, which are identical to the management accounts Straco BV receives as ultimate parent company of the Group.

2.1.3

The Purchaser shall, taking into account clause 2.1.1 of this Annex, procure (i) that the Group shall as of Completion until 1 January 2024 carry on its business in the ordinary course of business in accordance with past practice, and (ii) to the extent such having a negative effect on the EBITDA and/or Earn Out, that none of the following shall occur at any time before 1 January 2024:

(…)

(ii) the amendment of the accounting principles and/or policies applied by the Group, unless to the extent required to make it compliant with Applicable Law;

(…)

(iv) any significant and lasting adjustment in the nature of the Business, as conducted at Completion;

(…)

(vii) dismissal of [the CEO] as statutory director of the Purchaser and/or termination of his management agreement by the Purchaser (e.g. not including the situation [the CEO] Management B.V. himself terminates his management agreement and/or resigns), other than due to a reason that qualifies as an urgent cause (dringende reden) as meant in section 7:678 DCC; and

(viii) any knowing and intentional act by the Purchaser with the sole purpose of minimizing the Earn Out Payment.

2.1.4

In the event of any breach by the Purchaser of any of its obligations under Clause

2.1.3

of this Schedule, the Purchaser shall be liable for the amount by which the Earn Out Payment is diminished as a result of such breach, if upon receipt by the Purchaser of a notice of default from the Seller after a term of twenty (20) Business Days after the date of such notice of default the breach is not remedied.

(…)”

2.12.

Annex 10 Warranties (Warranties Annex)

“(…)

4. Financial statements and financial position

(…)

4.2

The management accounts of each Group Company in respect of the period from the Accounts Date to 31 September 2022, copies of which are included in the Data Room, have been prepared in accordance with accounting principles and policies and applying the methods and underlying assumptions used in the preparation of the Annual Accounts and the management accounts of that Group Company prepared for the twelve (12) months period prior to the Accounts Date.

4.3

Such management accounts:

(i) are not misleading in any respect;

(ii) give a true and fair view (getrouw beeld) of the value of any of the assets and liabilities of that Group Company as at the dates to which they were drawn up; and

(iii) fairly reflect the profits and turnover of that Group Company in respect of the periods to

which they relate. (…)

4.5

Since the Accounts Date:

(a) the Group Companies have operated its Business as going concern in a normal and prudent manner and have conduct its business in the ordinary course consistent with past practice in all material respects and no Group Company did or agreed anything which is outside the ordinary course of the business of such Group Company; in the ordinary course in a normal and prudent manner;

(…)

(e) there has not been any event, occurrence, fact or change that has had a material adverse effect on the condition (financial or otherwise) of the business, prospects, assets (including intangible assets) and liabilities, results of operations or financial performance of any Group Company;

(…)

16
Compliance

16.1

To the best of Seller’s knowledge, the Group Companies are conducting (and have at all times conducted) their business activities in material compliance with its constitutional documents and all Applicable Laws.

(…)

18
Information

18.1

All information contained in the Agreement and the Data Room, including the answers to questions raised in the Q&A tool of the Data Room, are correct, accurate and not misleading.

18.2

The Data Room includes all information which is likely to be material to a purchaser of the Company and/or an investor in the Company. Without limiting the generality of the foregoing, no information was withheld or excluded from the Data Room for reasons other than being immaterial to a purchaser of the Company.

(…)”

2.13.

On 30 December 2022, a policy was issued on behalf of the Underwriters to insure the Purchaser for losses caused by breaches of the Warranties in the SPA (the Policy). Coverage under the Policy is subject to conditions and limitations.

2.14.

On 22 February 2023, the parties determined the final purchase price to be paid by the Purchaser by agreeing on an Addendum to the SPA, amending the Initial Purchase Price in Clause 3.1(i) SPA to EUR 97,427,000 and replacing Annex 3.1(i) SPA by Annex F Addendum. The total amended final purchase price, including the Completion compensation, was EUR 102,677,000 (the Purchase Price).

2.15.

On 23 February 2023, the Purchaser and the Seller completed the Transaction (Completion), which meant the Seller transferring the Group shares and the Purchaser paying the Purchase Price.

2.16.

On 27 June 2023, a meeting took place between the CEO and [the managing partner], the managing partner of Straco. Following this meeting Purchaser started an inquiry into deferral bookings made by the Group in the preceding months, including the months predating Completion. This resulted in the Group’s Position Paper on the deferral bookings dated 14 July 2024, a note prepared by the Group's auditor (Crowe Foederer Audit & Assurance B.V.; ‘Crowe’) dated 31 August 2023 and finally a report drafted by Eight Advisory, an international financial due diligence party. The Purchaser concluded from these reports that the Seller had breached several warranties of the SPA and held the Seller liable for these breaches in its letter dated 19 October 2023.

2.17.

By letter dated 27 February 2024, the Purchaser notified the Underwriters of its claim under the Policy in respect of materially the same facts and circumstances as the Purchaser’s claim against the Seller.

2.18.

On 6 January 2025, the Underwriters accepted coverage under the Policy in respect of a breach of Warranties 18.1 and 18.2. They reached a settlement of the insurance claim with the Purchaser, resulting in a payment to the Purchaser of EUR 6,750,000.

3.The original claim

3.1.

The Purchaser seeks a declaration that the Seller breached certain warranties (the Warranties) included in the Warranty Annex of the SPA (Warranties 4.3(i), (ii) and (iii), Warranties 4.5(a) and (e), Warranty 16.1 and Warranties 18.1 and 18.2) and that the Seller breached the pre-completion undertakings provided for in Clause 7 of the SPA (the Pre- Completion Undertakings).

3.2.

It further demands a declaration that the Seller is liable for the damages caused by the breaches of the Warranties and Pre-Completion Undertakings in the amount of EUR 40,250,000 plus statutory interest, to be reduced by any amounts recovered by the Purchaser from the Underwriters (EUR 6,750,000; see para, 2.18 above), minus any reasonable costs, expenses and tax incurred in obtaining such recovered sum. The Purchaser seeks an order from this Court to pay the amount for which the Seller is liable. At the hearing, the Purchaser amended its claim, as a clarification, so as to order the Seller to pay to the Purchaser any other amount in damages that the Court considers reasonable, and amended the amount to be paid as compensation for reasonable costs (see para. 4.3 below).

3.3.

In the alternative (
subsidiair), the Purchaser’s claim is for the Court to order the Seller to pay the same amount of damages based on tort (Article 6:162 Dutch Civil Code (DCC)) or, as a second alternative (
meer subsidiair), on the basis of compensation for the non-setting aside of the SPA despite the existence of fraud (Article 3:53(2) DCC).

3.4.

A further part of the claim is for the Seller to be ordered to pay to the Purchaser the costs of these proceedings, including the post-judgment costs (
nakosten), plus statutory interest.

4.Discussion of the original claim

4.1.

This dispute is about the purchase by the Purchaser of the Seller’s shares in the Group. The Purchaser argues in these proceedings that before signing of the share purchase agreement (SPA) on 30 December 2022 (Signing) and Completion on 23 February 2023, the Seller breached certain warranties and pre-completion undertakings to which it had committed itself in the SPA.

4.2.

The factual allegations supporting the Purchaser’s claims are threefold:

 in the period between 7 November 2022 and Completion, the Group deferred certain costs, which it had incurred in the 4th quarter of 2022 (Q4 2022), to the first quarter of 2023 (Q1 2023),1 which was not in accordance with the Group’s past accounting practices and constituted a structural change of the Group's accounting policies,

 in the same period the Seller presented financials for the year 2022 which contained substantial accounting irregularities: revenue was overstated while several costs (such as holiday accruals) were understated (which are referred to below as P13 bookings),2

 the Seller failed to disclose that the financial performance of the Group (presented in the form of the 2022 EBITDA3) had deteriorated in Q4 2022 compared to the estimates provided by the Seller and that the underperformance was more than the EUR 0.5 million that the Seller had communicated previously to the Purchaser.

4.3.

According to the Purchaser, the Seller has, with these actions, breached the Warranties and Pre-Completion Undertakings. The Purchaser further argues that the Seller committed these breaches intentionally in order to mislead the Purchaser as to the financial performance of the Group and thereby induce the Purchaser to enter into the SPA and to complete the Transaction. This constitutes fraud, which precludes the Seller from invoking the limited liability clauses in the SPA (Clauses 11.4 and 11.5.1), so that the Seller is fully liable for the damages resulting from the fraud, which the Purchaser quantifies as follows:4

 the difference between the enterprise value in the Anchor Valuation of EUR 104.9 million (based on a 2022 EBITDA of EUR 12.7 million x 8.2 multiple) and the Adjusted Valuation of EUR 65.6 million (as calculated by Deloitte, retained by the Purchaser) based on the adjusted 2022 EBITDA of EUR 9.7 million x 6.8 multiple)

= EUR 39.3 million

 damages relating to financing arrangements with the banks: EUR 900,000

 reasonable costs incurred by Purchaser, consisting of the costs for investigating the breaches (the Eight Advisory Report, EUR 25,000) and the costs for quantifying the damages (Damage Quantification Calculation Report, EUR 31,290).5

4.4.

The Underwriters concur with the Purchaser’s position, except where it pertains to the specific Warranties that were breached (Warranties 18.1 and 18.2 only, in the Underwriters’ view) and the amount of damages suffered by the Purchaser.

4.5.

The Seller does not dispute that the deferrals of certain costs to the following fiscal year (2023) and the P13 accounting entries in 2022 (the P13 bookings) – as set out in the Eight Advisory Report – actually occurred,6 nor that the Purchaser only became aware of these deferrals and bookings after Completion. Further, the Seller does not dispute that the Group’s Q4 2022 performance – if adjusted for these deferrals and P13 bookings – was worse than disclosed to the Purchaser.

4.6.

The core of the dispute is:

whether any of the above actions by the Group’s CEO or CFO, or the CEO/CFO’s knowledge thereof, can be attributed to the Seller, and if so,

whether the Group, by making the deferrals and P13 bookings, changed its accounting practices, and if so,

whether the Group committed fraud by taking these actions and not disclosing the deteriorating financial results.

Attribution of actions/knowledge of the Group to the Seller (1)

4.7.

The Court will first consider the issue of attribution.

4.8.

According to well-established case law of the Dutch Supreme Court, actions and/or knowledge of the person doing the alleged act or having the relevant knowledge are attributable to a legal entity, if the actions and/or knowledge – based on standards prevalent in the community (
maatschappelijke opvattingen) – may be considered actions and/or knowledge of the legal entity (
Knabbel and Babbeljudgment regarding actions7 and the
P&F v. Peperjudgment regarding knowledge8). This applies not only to persons within the legal entity having actual control over the entity, but also to a non-controlling officer who has knowledge of the subject-matter for which the entity is held liable, provided that the officer had a duty to communicate its actions or knowledge thereof to the legal entity (see Professor Tjittes, “
Commercieel Contractenrecht”9 and the Opinion of the Advocate- General at the Supreme Court dated 18 September 2015).10 Such actions or knowledge are also attributable to the legal entity if the legal entity’s representative had a duty to enquire regarding the information needed to fulfil its duties.11

4.9.

Both the “actual control”/“non-controlling officer” rules and the “duty to enquire” rules apply in this case.

4.10.

The Seller is the Group’s parent company and the entity involved in the Transaction. The person approving the relevant actions and/or having the knowledge about the Group was the Chief Financial Officer of the Group (she is referred to below as the CFO). She was aware of the Transaction taking place which would result in the takeover by the Purchaser of the Group from the Seller. The CFO was the person responsible for the Group’s decisions on deferring costs, on accounting policy and on disclosure of the Group’s financial information to the Seller and ultimately to the Purchaser before and during the transaction process. She shared the information on deferrals, accounting policy and the Group’s financial situation with the Seller, and if she did not, she should have.

4.11.

On the other hand, the Seller, which provided warranties to Purchaser on the accuracy and completeness of Group information, had a duty to enquire and obtain the information from the Group CFO as needed to make good on its word. If it did not fulfil this duty and get the information, this non-compliance is an additional ground for attribution of the actions and knowledge of the Group CFO to the Seller.

4.12.

This is what a reasonable person in the same circumstances as the parties would have expected in signing the SPA. In the SPA “Seller’s Knowledge” is defined as follows [bold added by the Court]:

“Seller's knowledge or any similar expression means, with respect to any fact, matter or circumstance,the actual knowledge of the Seller, [the CEO] and [the CFO]at the date of this Agreement and the Completion Date, and theknowledge they should have hadafter having made due enquiries by each of them into the relevant subject matter with the relevant persons responsible for the matters in question within the Group Companies.”

While it is true that “Seller’s Knowledge” is used in the SPA as a definition, and that the Warranties invoked by the Purchaser in these proceedings are not knowledge-qualified, this does not help the Seller. Attribution of knowledge is not only guided by contractual definitions, but also by standards prevalent in the community (as the Court ruled above).

Under these standards, the definition only confirms that the parties to the SPA expected the Seller (as in fact a reasonable observer in the same circumstances would have done) to know what the CEO and CFO knew and what the CEO, the CFO and the Seller itself should have known, based on appropriate enquiries.

4.13.

Also, the opposite position – i.e. attribution is limited to actions and actual knowledge of the Seller’s own directors and officers, as well as specific actions and knowledge of other (legal) persons for purposes specified in the agreement – would be unworkable in the context of an M&A transaction such as the one between the Purchaser and the Seller. The reason is that this would mean that a seller could escape liability by (purposely or negligently) withholding relevant information on the target which it is trying to sell. Such a rule cannot be accepted as it would obviously create moral hazards and perverse incentives and undermine the business integrity of an M&A process.

4.14.

This analysis leads to the conclusion that the CFO’s actions and knowledge are attributable to the Seller.

Change in accounting practices (2) and fraud (3)?

4.15.

The next issue is whether the CFO – by approving the deferrals and P13 bookings – changed the Group’s accounting practices, and whether she performed these actions with the intent to conceal the deteriorating financials in Q4 2022 from the Purchaser (which - according to the Purchaser - constitutes fraud under the SPA).

4.16.

As the SPA does not contain a definition of fraud, and Dutch law applies to the legal relationship between the parties,12this term must be construed under the Dutch legal concept of fraud (
bedrog) which is defined in Article 3:44(3) DCC:

“Fraud occurs where a person induces another to perform a specific legal act by intentionally providing the other with inaccurate information, by intentionally concealing any fact the person was obligated to communicate, or by any other artifice. Representations in general terms, even if they are untrue, do not, as such, constitute fraud.”

Deferral of costs

4.17.

The Court finds that the approval by the CFO of the deferrals was contrary to the accounting practices of the Group, and that this was done intentionally, and with the purpose of concealing the lower profitability of the Group and inducing the Purchaser to adhere to the Transaction as previously agreed. The reasons for these findings are as follows.

 The evidence shows that the deferrals listed in the Eight Advisory Report were made in the period between November 2022 and February 2023 and consisted of costs of a certain nature which – according to general accounting principles – could not be deferred to another period than the period in which they were incurred. This follows from the note prepared by the Group's auditor, Crowe. This note13 will be referred to below as the Crowe Report. Not only were the deferrals – according to the Crowe Report – impermissible according to applicable accounting rules and a deviation from past practice. They also constituted a fundamental change of accountancy practices (
stelselwijziging).

 Crowe produced its report well after the deferrals were made and after Completion, at a time when the Purchaser was in charge of the Group, but this does not mean that its opinion is biased, despite the Seller’s argument along these lines. It is true that Crowe – prior to the position paper drafted by the CFO14 – initially gave the impression that deferring study costs to the next year could be in line with the “matching principle”, which is the principle that a cost item should be reported in the same period as the corresponding revenue is earned. However, (1) the discussion between the CEO/CFO and Crowe dates from well after the time the deferrals were made and could therefore not contribute to the
decisionto defer these costs in late 2022, and (2) Crowe’s opinion was dependent on (i) a substantiation by the CFO of her decision to defer and (ii) the advice of Crowe’s specialised committee of reputable independent experts ("
de afdeling vaktechniek").15 In the end, Crowe – having read the position paper drafted by the CFO and the advice from this special committee – decided that the deferrals were impermissible. That is decisive in the Court’s analysis.

 The fact, stressed by the Seller, that Crowe met privately with representatives from Straco prior to its report does not make its report biased either. As Straco is the current majority owner of Group shares, there is no reason why it should or could not have meetings with the Group’s auditor, even without the CEO or CFO of the Group being present.

 It is noteworthy that the Seller did not produce a report by an expert of its own contradicting Crowe’s findings and that the CFO, by not asking the auditor what its position was prior to actually making the deferrals, accepted the risk of the auditor seeking advice from its special committee and taking a position contrary to her position.

 The CEO’s statement (made during the interview by the Seller’s counsel after the Interim Judgment) to the effect that Straco only cared about the deferrals being made because of disappointing 2022 Group performance is inconsequential. The reason is that by making the deferrals, the disappointing results were hidden from the Purchaser’s view, and this in essence is the reason for the Purchaser initiating these proceedings, more than anything else.

 If the deferrals were contrary to Group accounting practices (and even a structural change), the CFO must have been aware of this at the time the deferrals were made. There is nothing in the record to suggest anything to the contrary.

 The Seller’s reference to one other instance in the Group’s past where study costs were deferred (the “Kunners” project, where the deferrals were reversed within the same financial year (2020)) was not in the context of an M&A process and does not justify the deferrals here.

 In any case, when allocating income and expenses, Article 2:384(2) DCC requires prudence. Prudence dictates that deferring costs may not be done without a solid ground to do so. This means that the CFO should have obtained a substantiation of her decision to defer costs before the decision to defer was made, instead of preparing a substantiation after Completion), and that she should have consulted the Group’s accountant before implementing such a change in Group accounting policies. In other instances (e.g.. the holiday accruals, see below), that is exactly what she did.

 The reason why she did not do this for the deferrals in question is obvious when analysing the emails and Teams messages exchanged between the CFO and her finance team (and among the finance team members themselves) in the period prior to actually making the deferrals. The Court will now go in to the specifics of these emails and messages.

o On 6 December 2022, one of the Group's finance employees ([X]) informed the CFO about the 'extremely bad results' of one of the Group's subsidiaries (Bold) in November 2022.16The revenues were very low (EUR 311k under the forecast) and there were additional costs of sales. This meant that the EBITDA was 138k negative instead of 319k positive. In response, the CFO indicated that additional sales costs had to be 'spread' to the next year (Q1 2023), with the ‘story’ that it was an investment, and that they had to 'play' with this.

o That same day in a Teams message17 [X] communicated to [Y] (another financial officer of the Group) that the CFO wanted him to reverse the previous month’s capitalisation of the study costs and to re- book them. He indicated that he felt that this would be insufficient to ‘close the gap’, but that the CFO found his proposal to defer the costs for two months ‘hard to defend’ (“
lastig verdedigbaar”).

o In the end, the costs were deferred to three months later.

o On 7 December 2023, the CFO was again informed of the extremely bad results for one of the Group's subsidiaries in the month November 2022 ("
Ik heb net de cijfers ingeladen en zie een extreem laag resultaat").18

o That same day, [X] sent an e-mail to the CFO about the actual figures for November 2022.19 This e-mail contained an Excel document with possible deferral bookings (referred to as "
correctieboekingen"). He indicated that the gap between the actual figures and the forecasts were 'enormous', and that this was the result of lower hires, lower productivity and lower fees. He noted that with a 'maximum stretch' he would be able to defer EUR 756,000 in costs, that this would 'postpone the problem', but that hopefully the ‘story’ could eventually be that figures are lower because certain hires had been postponed.

 There is no reference in the messages quoted above that the deferred costs actually related to the next financial year or that the deferrals would comply with the matching principle, as the Seller now claims. Instead, the focus is on closing the gap between the Q4 2022 estimate, which was communicated to the Purchaser, and the actual financials. This shows intent to hide the Group’s actual financial position from the Purchaser.

 The evidence also clearly shows that the CFO was aware that the deferrals were a structural change of the Group’s accounting practices (which was not allowed under the Warranties). If not, why would she have to present a ‘story’ to substantiate the deferrals? And if the CFO found a deferral of more than two months hard to defend, why would she allow a deferral for three months, without even checking the admissibility with the Group’s accountant, as she or her team had done previously as to another accounting issue (see the holiday accrual discussion below)? And finally: why did she say that there were no alternatives or even suggest that not implementing the deferrals would jeopardise the Transaction (“
Echt vervelend maar alternatief is no go20”)21?

 The CFO’s statements in the interviews held by the Seller after the Interim Judgment are unconvincing as they do not provide any compelling rebuttal of the above points, including contemporaneous documentary evidence. Moreover, the CFO’s statements (that she would not be in any position to commit fraud as she does not have access to the accounting system and would need two or three accomplices)22 are beside the point. The allegation is not that the CFO committed fraud on her own, but that the Seller committed fraud by misrepresenting the financials as a consequence of the CFO’s actions. The CFO was instrumental in the misrepresentation, and – as shown by the Teams messages and emails – she was aided by other Group finance employees.

 At no point in time did a Group or Seller representative communicate to the Purchaser that the deferrals were made. The Seller was under an obligation to disclose, as the deferrals constituted a change of accounting policy which was likely to be material to the Purchaser due to its impact on the 2022 EBITDA. In fact, during the Q&A process preceding the Completion, the Seller stated, in response to a question posed by the Purchaser: “non-chargeability is within cost of sales”.23 This implies that non-chargeable costs (such as study costs) are treated as expenses in the profit and loss statement (with a resulting effect on EBITDA) and not as capitalised costs on the balance sheet (with no EBITDA impact). The CFO in her interview did not explain why she thought the Purchaser knew or had reasons to know that the answer in the Q&A did not relate to study costs, which were substantial. Even if the answer is technically not false (as the Seller suggests), it is, at the very least, misleading, as it is incomplete and does not clarify that there are a number of substantial non-chargeable costs that
hadbeen capitalized (added to the balance sheet and removed from the profit and loss statement, with a substantial upward EBITDA impact). A reasonable person in the same circumstances as the Purchaser would not have understood this.

 The conclusion of all the evidence is inescapable: the CFO approved or allowed the deferrals with the intent to conceal the Group’s lower profitability from the Purchaser as the lower profitability would, if disclosed, jeopardise the transaction process.

P13 bookings

4.18.

The same conclusion applies to the P13 bookings, but only insofar as these bookings relate to an incorrect provision for holiday accruals (EUR 402,000). The Purchaser does not dispute that P13 bookings as such are not uncommon. It was not only aware of these bookings in a general sense, but also specifically in respect of the Group, as the Purchaser confirmed at the hearing. However, what is important here is that the Purchaser was not aware of the extent of the specific holiday accrual P13 bookings.

4.19.

The Court observes that in 2022 – at year’s end – the P13 bookings were almost twice as high (EUR 857,188) as indicated in Straco’s internal presentation on the Transaction (EUR 462,000).24It is likely that the increase was caused by an understatement of holiday accruals (in the amount of EUR 402,000), which was corrected by the auditor in the annual accounts post-Completion. And there is evidence that the understatement of holiday accruals was done with the intent to mislead the Purchaser (the Court will elaborate on that below). As to the remaining P13 bookings, the Purchaser did not sufficiently substantiate that these bookings were done with the intent to defraud the Purchaser. Therefore, the Court will deny the claim insofar as it relates to these other P13 bookings. It will now focus on the provision for holiday accruals.

Provision for holiday accruals

4.20.

The evidence shows that the CFO reduced the Group’s provision for holiday accruals in Q4 2022 – compared to its accounting policy in previous years and the accounting rules – and that this was not an honest mistake or a consequence of illness of Group employees, as explained by the CFO in her statement, but an intentional act designed to conceal the Group’s lower Q4 2022 profitability. The reasons for these findings are as follows.25

 In October 2022, there was a discussion between the Group’s finance officers and the CFO on the provision that needed to be taken for holiday accruals.

o On 10 October 2022, [the finance director], the finance director of one of the Group's subsidiaries ([the finance director]) indicated to the CFO that he had spoken to the Group’s auditor (Crowe) about the difference in provisioning for holiday accruals within the Group: the Group recorded a provision of 50%, whereas a subsidiary (CarriereCafé) recorded a 100% provision. [the finance director] communicated that the auditor had a negative stance towards a provision of only 50%.

o On 20 October 2022, [Y] asked the Group's auditor whether it was mandatory to record a provision for holiday accruals and which Clause in the ‘RJ’ [
Richtlijnen Jaarrekeningen; Dutch Accounting Standards] applies to this issue.26

o The auditor replied that a provision is mandatory and attached the underlying accounting standard, which states that when determining the amount of the provision for holiday accruals, account must be taken of the likelihood of a certain employee’s employment ending. His advice was to record a provision of 100% “if every euro counts”.27

o In response, [Y] said that for several years the Group had only recorded 50% of its holiday accruals, and asked if the Group had acted in violation [of accounting standards].28

o The auditor subsequently wrote that recording a provision of only 50% was a violation. He said that he understood that the Group in practice did not pay out all accrued holidays and that sometimes remaining rights to take holiday time may expire, but that according to the letter of the law/accounting rules, you should take a 100% provision.29

o [Y] (as late as 20 October 2022) communicated the auditor’s advice to the CFO.30

 The CFO did not decide to follow the auditor’s clear instructions that a provision of 100% was required according to the law and accountancy rules:

o In response to the last communication in October 2022 she replied: “Wonderful! Now I need to cop out on that little shit. I will tell [the finance director] that they can continue the old way of provisioning, but that we will organize it differently at group level (to bluff).”31

o On 9 November 2022 the CFO revisited the issue and asked [X]: “I want to know whether you set the provision for holiday [accrual] to 50 or 25 [percent].” (
“wil weten of je reservering vakantie nu op 50 of 25 hebt gezet”). [X] replied that it was now 25% with regard to Bold and CarriereCafé. The CFO’s response was: “Doing it this way is fine.” (
“is goed zo door te voeren“)32

o On 17 January 2023, the CFO wrote to [X]: “I reported [to [the investment manager], investment manager with OTC (the Seller’s parent company)] that we tweaked [the consolidated report on 2022] and that I only had a moral dilemma regarding the provisioning for holiday accruals.” (
“ik heb gemeld dat we getweaked hebben en dat ik enkel bij de reservering vakantoedagen[sic]
een moreel dilemma had”).33 It is evident that this “moral dilemma” stems from the discussion several months earlier (in October 2022) with the Group’s auditor on the subject of the size of the holiday accrual provision under the accounting rules.

o The CFO eventually lowered the percentage which was customary at Group level, which was 50%, to 25%.

 The CFO changed Group subsidiaries’ accounting practices, despite the fact that she was aware that the Group was involved in an M&A transaction, and that the Seller had committed to the Purchaser that the Seller would operate its business as a going concern and not make any material change to the accounting practices and principles as applied in the annual accounts of the previous year (2021).34

 Instead of coming forward with this change, she wrote to [the finance director] that the old way of provisioning was fine and that she would bluff her way out of admitting that the Group needed to provision for 100% (which was what CarriereCafé did).

 Furthermore, the VDD Report dated 17 November 2022, as provided by the Seller to the Purchaser,35which was the basis for the subsequent top-up due diligence by the Purchaser, states unequivocally:

“
Vacation days. As per discussion with the accountant, management records 50% of the vacation days provision. However, dependent on the amount of vacation days taken, additional liabilities arise.

Therefore, we include a n.q. item for consideration.”

o This information was incorrect. The auditor did not – in its discussion with the Group’s finance people – recommend that a provision of 50% for holiday accruals would be prudent, but stated that the law and accounting rules would require a 100% provision. A correct and not misleading way of communicating the auditor’s advice would have been: “Our accountant requires a 100% provision, but in these circumstances we have chosen to only do 50%...”.

o In practice, the Group did not adhere to the previous policy of 50%, but lowered the provision for holiday accrual even further, down to 25%. The Purchaser was notified of this change in the Q&A report:36

“For Welten Group records the vacation day provision at 50% as historically the actual pay-out of vacation days has been around 25%, which is assessed on an annual basis by management. Welten Group aims to minimise the payout of the vacation days by asking the employees to notify the Company about their leave and utilise their remaining vacation days. This way of accounting and the approach will be adopted by Carriere Cafe as well as part of aligning the accounting policies. The costs and balance sheet position will be provided tomorrow.”

o However, this still is misleading given the statement in the VDD Report that the accountant was fine with 50%. The gap between the accountant’s recommendation (100%) and the 25% actually provisioned for holiday accruals would likely have given rise to questions from the Purchaser’s side, as this was a huge step with significant impact on the 2022 financial results.

Breach of Warranties

4.21.

The Court finds that by providing false or misleading information on the deferrals and holiday accruals the Seller breached Warranties 18.1 (all information in the Data Room is correct and not misleading) and 18.2 (all information which is likely to be material to Purchaser is in the Data Room). These warranties are not limited to the information provided on the period from the Accounts Date (31 December 2021) to 31 September 2022, such as Warranties 4.3 and 4.5, but apply to the entire period until Completion of the Transaction (23 February 2023). This follows from the definition of ‘Breach” in the SPA:

“Breach means any fact, matter or circumstance that causes any of the Warranties, individually or together with the other Warranties, to be wholly or partly untrue, inaccurate or misleading on the Signing Dateor on the Completion Date.”[bold added by the Court]

4.22.

This is further confirmed by Clause 10.1.6 of the SPA which stipulates:

“The Seller shall not be liable in respect of any forward-looking forecasts, estimates, interpretations, analysis, projections, statements of intent or statements of opinion in relationto the period as from the Completion Date, which have been included in the Data Roomin good faith, save as where they form part of the Warranties.”[bold added by the Court]

This means that the Data Room is supposed to include information up to the date of Completion.

4.23.

The Seller does not dispute that the estimates on Q4 2022 provided to the Purchaser did not reflect the actual costs incurred by the Seller, as a substantial part of these costs were deferred to Q1 2023. Nor did it include a proper and prudent provision for holiday accruals, which should have been 100%. The total incorrect deferrals and holiday accruals (through Completion) are EUR 1,663,000 (EUR 1,261k deferrals + EUR 402k holiday accruals).

4.24.

This is a substantial amount, which affects the 2022 EBITDA. The Seller argues that the purchase price agreed upon by the Purchaser and the Seller was not based on the 2022 EBITDA, but on the 2021 EBITDA. This is beside the point. The Seller provided a warranty that the Data Room contained all information which was likely to be material to the Purchaser, including estimates and forecasts up until the Completion Date, and that all information was correct and not misleading. As a result, the relevant 2022 information should have been disclosed.

4.25.

In Clause 10.1.3 SPA the Seller
“acknowledges that the Warranties are material and the accuracy of the Warranties is essentialto the Purchaser’s decision to enter into and pay the Purchase Price set out in this Agreement. The Warranties allocate between the Seller and the Purchaser the risk and costs relating to any facts or circumstances that may cause any of the Warranties to be untrue, inaccurate or misleading.”
This means that any argument based on immateriality of the financial informationon the Group provided to the Purchaser is doomed to fail.

4.26.

By providing false or misleading information on the deferrals and holiday accruals the Seller not only breached the Warranties on the accuracy of the information (Warranties 18.1 and 18.2), but also misled the Purchaser to believe that the 2022 EBITDA was in line with the estimates, apart from a small deviation of EUR 0.5 million, which Purchaser had accepted.37 As the deferrals and the holiday accruals provision were done incorrectly with intent to mislead the Purchaser as to Group underperformance, the Court finds that the Purchaser would not have accepted the underperformance if it had been fully aware of the incorrect deferrals and holiday accruals provision – leading to a much higher underperformance.

4.27.

The Court’s conclusion is that the actual 2022 EBITDA that should have been disclosed before Completion is:

EUR 12,746k38

minus:

 EUR 1,261k deferrals39

 EUR 402k holiday accruals40

 EUR 599k reported underperformance41

= EUR 10,484k

4.28.

The total unreported 2022 EBITDA therefore is EUR 2,262k.

4.29.

This is a serious violation of Warranties 18.1 and 18.2. The Purchaser alleges that the Seller also breached other Warranties and the Pre-Completion Undertakings, but has not substantiated that such breaches would, if proven, result in a higher amount of liability. Therefore, the Court will not enquire whether these other warranties and pre-completion undertakings were breached by the Seller.

4.30.

Under Clause 10.2.1 SPA the Seller is liable towards the Purchaser in case of a breach of Warranties and shall compensate the Purchaser for the damages suffered or incurred by the Purchaser as a result of such breach.

4.31.

As a result of the Court’s finding that the breach of Warranties 18.1 and 18.2 is a result of fraud, the limitation and exclusion of liability following from Clauses 11.4 and 11.5.1 SPA do not apply. This means that the Seller is fully liable for any damages resulting from the breach of the Warranties (up to the maximum of the Purchase Price of EUR 105 million; see Clause 11.4.1 SPA).

Causation

4.32.

The Seller’s first argument on causation is that actions taken by the Seller after the signing of the SPA on 30 December 2022 cannot have affected the decision of the Purchaser to enter or not enter into the agreement, and could not result in not completing the Transaction because the Purchaser was obligated to close the Transaction regardless of the 2022 EBITDA, and had waived its right to annul or rescind the SPA (Clause 20.10) or to take recourse other than as a claim for damages (Clause 10.2.2 SPA).

4.33.

The Court does not accept this argument. The relevant date for claims for damages in these proceedings is the date of Completion (23 February 2023). That was the date on which the Purchaser was obligated to pay (and actually paid) the Purchase Price. If at that time the substantial Group underperformance and the attempt to conceal the underperformance by fraud had been disclosed to the Purchaser, the Purchaser would have been well positioned to withhold payment and insist on renegotiations. Although it is true that the Purchaser waived its right to annul or rescind the SPA (Clause 20.10 SPA), the SPA also says that nothing in the Agreement would operate to limit any liability of the Seller in case of fraud (Clause 11.15). The interaction of these provisions would have created a certain scope for price adjustments and empowered the Purchaser to try to wriggle out of completing the Transaction (absent appropriate price adjustments). In the Court’s view, in these specific circumstances, no court would order a purchaser to complete an SPA, even though there is a provision in the SPA excluding a right to seek annulment based on fraud – at least not without talks on appropriate adjustments.

4.34.

The Seller’s second argument is that - if it had informed the Purchaser of the Group’s actual 2022 underperformance and the incorrect deferrals and holiday accruals provision prior to Completion - this would not have steered the Purchaser away from signing and completing the SPA, because:

 the Purchase Price was based on the 2021 EBITDA, not the 2022 EBITDA; if the Purchase Price offer implied a multiple of 8.3 x 2022 EBITDA, that does not mean that the agreed Purchase Price is based on the 2022 EBITDA,

 the Purchase Price was a result of a controlled auction process, where the Seller required offers exceeding EUR 100 million,

 the Purchaser was only interested in the Group’s cash-generating capabilities, and was very eager to roll out the Welten model to Belgium.

4.35.

Under Clause 3 of the SPA the Purchase Price for the shares was EUR 97,687,000 (being the initial Purchase Price identified as the equity value in Annex 3.1(i)) plus the ‘Completion Compensation’ minus the ‘Completion Leakage’ plus (if applicable) the ‘Earn Out’. Annex F of the SPA (which replaced the purchase price in Annex 3.1 of the SPA as of 22 February 2023) shows that the final agreed Purchase Price was EUR 102,677k, which was calculated based on an enterprise value of EUR 105,000k (Enterprise Value or EV), deducting items such as leakage and adding the completion compensation.

4.36.

However, even if the EV of EUR 105,000k would have been based on the 2021 annual accounts (which the Seller contends), it must have been clear to the Seller that the Purchaser would renegotiate the deal (and possibly walk away from it), if the Group’s 2022 performance and growth potential (which is commonly measured by calculating the company’s EBITDA in a certain fiscal year) was not in line with the expectations provided by the Seller on the fiscal year 2022. This is evidenced not only by the fact that the due diligence prior to the signing of the SPA was done on the basis of the financial data from the Accounts Date (31 December 2021) to 31 September
2022, but also by the numerous times before Signing (which took place on 30 December 2022) the Group/Seller reported the estimated 2022 EBITDA to the Purchaser:

 the VDD Report dated 17 November 2022 included an estimated 2022 EBITDA of EUR 12,746,000,42

 in the financial report attached to the 12 December 2022 email,43the Group’s CEO informed Straco of the November 2022 financials and the effects they would have on the 2022 EBITDA (EUR 12,246k),

 on 19 December 2022, the CFO sent Straco an update on the 2022 financials, which included an EBITDA of EUR 12,002k,44

 in a phone call between the CFO and a representative of Straco on 23 December 2022, the CFO confirmed that the ‘reported’452022 EBITDA would be EUR 10.1 million,46

 on 26 December 2022, the CFO sent an Excel document (which was last modified on that same date by the CFO) containing a calculation of the bridge between the EV (Enterprise Value) and the PP (Purchase Price).47 The document suggests that the Enterprise Value was calculated by multiplying the 2022 EBITDA (EUR 12,533k) by 8.3 (see below).

The Seller argues that in the original document the multiple was calculated by the formula “Enterprise Value/EBITDA 2022=multiple”. Be that as it may, this document shows that the Seller was aware of the importance of the 2022 EBITDA to the Purchaser. That is the key point in the Court’s analysis.

4.37.

After Signing and before Completion, the actual 2022 EBITDA was also misrepresented (insofar as the figures were not adjusted for the incorrect deferrals and holiday accruals provision):

 on 3 February 2023, the CFO shared the actual 2022 financial results as part of the leakage determination process which showed a reported48 EBITDA of EUR 10,031,000.49

4.38.

The Seller’s knowledge about the importance of the 2022 EBITDA is furthermore evidenced by the actions taken by the Group’s CFO to conceal the lagging performance of the Group in Q4 2022 by intentionally making cost deferrals and applying a provision for holiday accruals that was too low. There is no explanation that makes sense other than that the Group, and therefore also the Seller, knew the importance of the 2022 EBITDA being in line with the expectations raised by the Seller.

4.39.

Furthermore, in Clause 10.1.3 SPA the Seller acknowledges that the Warranties are material and that the accuracy of the Warranties is essential to the Purchaser’s decision to enter into, and pay the Purchase Price set out in, the SPA. This means that the Seller knew or should have known that if one of the Warranties was breached, the Purchaser would not be willing to continue with the Transaction as agreed, and would no longer be willing to pay the Purchase Price.

4.40.

The fact that the Purchase Price was a result of a controlled auction process and that the Purchaser was eager to purchase the Group does not detract from the fact that the Warranties were essential for the Purchaser to pay the Purchase Price.

4.41.

Therefore, the Court considers it likely that if the Seller had disclosed the actual underperformance of the Group (as a result of the incorrect deferrals and provision for holiday accruals) prior to Completion, the Purchaser would – at the least – have renegotiated the Purchase Price.

Quantification of Damages

4.42.

Now, the Court turns to quantifying the loss resulting from the breach of Warranty 18.

4.43.

According to Article 6:96 DCC, financial loss includes both actual loss and loss of profit. Pursuant to Article 6:97 DCC, the Court quantifies damages in the manner that is most consistent with the nature of the damage. The starting point is that the injured party is put as much as possible in the position it would have been in if the event causing the loss had not occurred.

4.44.

According to Supreme Court case law, damages must be quantified by comparing the actual situation (i.e. with the Purchaser completing the Transaction, unaware of the Seller’s fraudulent misrepresentations of the Group’s actual profitability) to the hypothetical situation (where the Seller would have accurately informed the Purchaser of the Group’s financial situation prior to Signing and/or Completion).

4.45.

As the Court ruled above, the Seller should have disclosed before Completion that the 2022 EBITDA was actually EUR 10,484k instead of EUR 12,746k.

4.46.

The parties do not agree on the purchase price they would have renegotiated at that time. The Purchaser argues – referring to the Damage Quantification Calculation Report drawn up by Deloitte – that renegotiations would have lowered the Purchase Price to an adjusted valuation of EUR 65,600,000. This is calculated as the difference between:

 the Anchor Valuation which results in an enterprise value of EUR 104,900,000 (which is based on a multiple of 8.2 x the misrepresented 2022 EBITDA of EUR 12.7 million)

 The Adjusted Valuation resulting in an enterprise value of EUR 65,600,000 (based on an adjusted EBITDA multiple of 6.8 x the actual 2022 EBITDA of EUR 9.7 million (after adjusting for deferrals, holiday accruals and underperformance).

4.47.

The Seller argues that the Damage Quantification Calculation Report is flawed in several ways:

 the Enterprise Value agreed upon concerned the value as per 31 December 2021,

 the misrepresentation in the report allegedly occurred at the transaction date, i.e. on 30 December 2022, whereas the valuations were performed with a valuation date of 30 June 2022,

 if Deloitte had done a proper “high level DCF Analysis” based on the Free Cash Flow (FCF) the Group could generate, it would have found that no loss occurred.

4.48.

The Court considers it likely that the Purchaser, if it had known that the 2022 EBITDA was substantially lower than communicated by the Seller, it would only have offered to pay a purchase price based on this lower EBITDA. It was or should have been clear to the Seller that the Purchaser was basing its decision mainly on the Group’s performance and growth potential (EBITDA), and not, or only to a lesser degree, on the free cash-flow generating capacity. The fact that the starting point for the purchase price determination may have been the 2021 EBITDA is irrelevant, as the Court has explained.

4.49.

The Court does have some doubts as to the valuation date used by Deloitte. The valuation date should be 23 February 2023 (see para. 4.33 of this judgment).

4.50.

As the Court ruled above, it is likely that the disclosure of the underperformance would have led to renegotiations. However:

 it is uncertain what purchase price would have been agreed in these renegotiations and whether or not an EBITDA multiple would have been used in relation to the actual 2022 EBITDA; that would, for instance, also depend on any other potential buyers. The parties have not sufficiently discussed the validity of the Purchaser’s assumption that the parties would have agreed on a lower
multiple(6.8 instead of 8.2). The multiple obviously makes a lot of difference in quantifying the damages, and

 the Court’s decision on the amount of the 2022 EBITDA misrepresented by the Seller results in a lower EBITDA than used by the Purchaser to quantify its damages (EUR 2,262k instead of EUR 3,000k; see para. 4.28).

4.51.

The Purchaser also seeks damages consisting of a ‘penalty interest rate’ it is ‘facing’ as a consequence of the misrepresentation of the 2022 financials. However, it follows from the Purchaser’s pleading notes that it has obtained a waiver from the lender with respect to the financial covenants, so that the harm may be limited to additional costs for obtaining this waiver (EUR 22,500) and a higher interest rate than expected. The Purchaser did not set out what effect this has, if any, on the actual amount in damages to be paid by the Seller.

4.52.

Finally, the Purchaser will have to reduce its claim by any amounts recovered from the Underwriters, after subtracting reasonable costs, expenses and tax incurred in obtaining the sum from the Underwriters. However, the Purchaser did not state and substantiate these costs, expenses and tax.

4.53.

The Court therefore provides an opportunity to all parties (including the Underwriters) to comment on (paras. 4.50-4.52):

 the expected outcome of the hypothetical renegotiation process given the Court’s decision on the 2022 EBITDA and the multiple proposed by the Purchaser, both in terms of the lower EBITDA and the multiple to be applied,

 the other items of the Purchaser’s claim for damages,

 the reasonable costs, expenses and tax incurred in obtaining the sum recovered from the Underwriters.

The brief must be limited to the subject-matter listed above. Any attempts to replead points on which the Court has already reached a decision will be disallowed.

4.54.

To facilitate the parties’ response to each other’s briefs, they will be directed to exchange drafts of their briefs two weeks prior to the deadline set by the Court.

5.The counterclaim

5.1.

The Seller’s counterclaims are:

 to declare that the Purchaser has breached Clauses 1.3.1, 2.1.2 and 2.1.3 of the Earn Out Annex;

 to declare that the Purchaser is liable for the amount by which the Earn Out Payment is diminished as a result of these breaches,

 to order the Purchaser to pay the amount by which the Earn Out Payment is diminished as a result of the breaches, to be determined in follow-on quantification proceedings (
schadestaatprocedure), and

 to order the Purchaser to pay the costs of the proceedings, plus statutory interest.

5.2.

As a part of the counterclaim the Seller raised a second motion for disclosure of documents (the first one was decided upon by the Court in the Interim Judgment) in which it seeks an order for Welten:

a) to provide OTW with copies of all Group management accounts shared by the Group with Straco in the period from 23 February 2023 to 31 December 2023,

b) to provide OTW with copies of information on 26 topics,

c) to pay the costs of the motion proceedings, plus statutory interest.

5.3.

In its directions dated 4 December 2024, the Court bifurcated the original claim and counterclaim proceedings, and directed that the Court would first deal with the original claim and the Seller’s motion for documents on the counterclaim, postponing the counterclaim to a later stage (see below).

6.Discussion on the motion in the counterclaim

6.1.

According to the Seller, the Purchaser has not fulfilled its obligation under Clause

2.1.2

Earn Out Annex to provide the Seller, on a monthly basis, with copies of the Group management accounts. The Seller also argues that the Purchaser has an obligation under Clause 1.3.2 of the Earn Out Annex to provide a further 26 categories of documents to verify the Purchaser’s Earn Out Payment Calculation, as well as to assess the Purchaser’s liability for any breaches of the Earn Out Covenants (Clause 2 of the Earn Out Annex).

6.2.

The Court notes that the information obligation the Seller is referring to (Clause 1.3.2 of the Earn Out Annex) reads – in relevant part – as follows:

“Following receipt of the Earn Out Payment Calculation, the Purchaser shall provide the Seller, upon first request, such information as reasonable requested by it and provide the relevant information relating to the preparation of the Earn Out Payment Calculation, in each case for the purpose of assisting the Seller in its review of the Earn Out Payment Calculation and the calculations contained therein.”

6.3.

The parties have different views as to how to construe this provision. The Seller asserts that it includes a right to assess whether any Earn Out Covenants have been breached. The Purchaser argues that the information obligation only pertains to the Earn Out Payment Calculation and underlying calculations.

6.4.

Dutch law governs the issue of SPA interpretation (Clause 21.1 SPA). The standard under Dutch law was set out in the Interim Judgment (in para. 4.8), so the Court will not repeat that here. The circumstances guiding the construction of the SPA were listed in the Interim Judgment as well, and are still the same. Therefore, the Court will give decisive weight to the most obvious text-based meaning of Clause 1.3.2 and other provisions of the Earn Out Annex.

6.5.

The disclosure obligation relied on by the Seller here differs from the disclosure obligation that the Court dealt with in the Interim Judgment. The disclosure obligation here is in Clause 1.3.2 of the Earn Out Annex and:

 is limited to information that is “reasonably requested,”

 pertains to information that is relevant to the preparation of the Earn Out Payment Calculation, and

 is there for the purpose of assisting the Seller in its review of the Earn Out Payment Calculation and the calculations contained therein.

6.6.

The Seller argues that this Clause contains two separate obligations:

 to provide all information reasonably requested, and

 to provide information relevant to the Earn Out Payment Calculation.

6.7.

This argument has no merit. The purpose of the disclosure obligation in the Earn Out Annex is to assist the Seller in its review of the earn out calculation. This follows clearly from the wording of Clause 1.3.2 Earn Out Annex as well as its location in the SPA. It is not a general disclosure obligation which relates to all earn out disputes, but a specific one, regarding only the “Determination Earn Out Payment”. This means that the information requested must be relevant to the review of the calculation.

6.8.

Most of the documents requested by the Seller do not relate to this review, but to the assessment as to whether the Purchaser breached any Earn Out Covenants. The question as to whether the Purchaser breached any Earn Out Covenants is not part of the review process, nor of the expert procedure following a Dispute Notice regarding the calculation to be sent by the Seller to the Purchaser (Clauses 1.3.5 and 1.3.7). The expert will not determine whether any covenants have been breached, but only whether the calculation has been done correctly. Any alleged breach of covenants needs to result in a separate notice, a notice of default under Clause 2.1.4 of the Earn Out Annex, which can ultimately result in the Purchaser’s liability (same clause). The existence of liability is for the Court to decide, not the expert. Evidently, this is also the Seller’s opinion, as it added a claim to that effect in its counterclaim in these proceedings.

6.9.

This means that document requests relating to any alleged breach of covenants cannot be based on the disclosure obligation in Clause 1.3.2.

6.10.

Moreover, the documents requested by the Seller in its motion do not fulfil the requirement of “reasonably requested”. The motion lists 26 categories of documents the Seller wishes to obtain from the Purchaser. Because of the wide scope of the motion, this may lead to the Purchaser having to sift through thousands of documents at substantial costs (according to the Purchaser the first disclosure motion resulted in EUR 150,000 in costs) to provide the information requested by the Seller.

6.11.

Not only are most of the documents not necessary for the review of the calculation, but the motion also amounts to a fishing expedition. For the documents requested to result in any earn out for the Seller, which is the Seller’s final goal, the 2023 EBITDA must have been at least EUR 14 million. This follows from the text of Clause 1.2.1 of the Earn Out Annex, which provides that the earn out payment is calculated by reference to any 2023 EBITDA in excess of EUR 14 million.

6.12.

The Seller provided no proof that the Group’s business in 2023 – absent the alleged Purchaser mismanagement – would have been doing so well that the 2023 EBITDA would have surpassed the 2022 EBITDA (which was well below EUR 14 million). Instead, the case file contains numerous indications to the contrary:

 the actual 2023 EBITDA calculated by the Purchaser was only EUR 3 million; even if the Seller managed to show that the actual 2023 EBITDA was or should have been higher, it is still a long way even to get anywhere close to the required minimum of EUR 14 million,

 the actual 2022 EBITDA was not EUR 12 million, but – as the Court ruled above – EUR 10 million, which constitutes a downward trend compared to 2021,

 the Seller knew that one of the Group’s subsidiaries was having ‘extremely bad results’ in Q4 202250 and that this was caused by a lower number of hires, lower productivity and lower fees,51whereas this should generally be the best quarter of the Group.52

6.13.

Even so, at the hearing, the Seller said that a right to an earn out payment in the current circumstances cannot be ruled out, as:

 the business did not collapse and there was no decline in revenue,

 there are indications that the CEO and CFO of the Group had difficulties focussing on the business as they were kept busy answering Straco’s questions and completing an M&A in Belgium, and

 the four label approach conducted prior to the Transaction changed after Completion: the labels were rationalised and were managed by only one director.

6.14.

However, the gap between the actual 2023 EBITDA of EUR 3 million and the required EBITDA of EUR 14 million is so large that these arguments do not sufficiently explain why the Court should accept that this gap would have been bridged and even surpassed if the Purchaser had calculated the earn out correctly or had not breached any Earn Out Covenants (as alleged by the Seller). In light of the financial information on 2023, which was available to the Seller, it should have been able to provide more substantiation on this subject than it did, and its position is therefore not sufficiently substantiated.

6.15.

The Purchaser already provided the Seller with a large amount of financial data on the Group’s performance in 2023, such as a copy of the 2023 general ledger, the management accounts for 2023, the audited annual accounts for the financial year 2023 and email correspondence with Crowe Foederer regarding the accounting policies and methods applied. Given the remoteness of the chance that the Seller will succeed in getting to the minimum 2023 EBITDA needed for an earn out obligation to arise, the Purchaser was within its rights to limit its disclosure to the documents already provided in combination with its offer to grant the Seller on-site access to the full financial administration and other relevant documents. The Seller was obligated to accept this offer.

6.16.

The document requests can also not be awarded on the basis of Article 843a DCCP.53 According to well-established case law, the party requesting access or a copy of a document or range of documents must state and substantiate facts and circumstances, and submit any available evidence which justifies the conclusion that it is sufficiently likely that the alleged breach of contract (or tort) actually occurred. This standard enables the Court to strike a balance between the interests of the claimant in being able to discover the truth and strengthen the claimant’s evidentiary position, and the interests of the defendant in not having to disclose confidential information and in being spared the drastic burdens that disclosing evidence often entails.54

6.17.

As the Court ruled above, the Seller could and should have done more to substantiate its argument that the 2023 EBITDA would have been more than EUR 14 million if the Purchaser had calculated the earn out correctly and had not breached any Earn Out Covenants.

6.18.

The above leads to the conclusion that the motion regarding the 26 categories of documents will be denied.

6.19.

The motion will also be denied insofar as it pertains to the management accounts requested. In its statement of defence against the motion, the Purchaser explained why there were delays in providing the management accounts in 2023 and what it did to keep the Seller in the loop about the financial situation of the Group (para 5.4). The Seller did not sufficiently dispute this account of what happened, but only stated that it is inconceivable that Straco was not kept up to date more and earlier than the Seller. This does not properly explain why the Court should accept that the management accounts received by Straco differed from those received by the Seller. But even if the Purchaser did share management accounts with Straco that differed from those provided to the Seller, and by doing so breached Clause 2.1.2, as Seller argues, that would not make the Purchaser liable for any diminishment of the Earn Out Payment, which is what the Seller is trying to establish in the counterclaim. The parties only agreed liability in case of the breaches of the Earn Out Covenants listed in Clause 2.1.3 (see Clause 2.1.4).

6.20.

This means that the motion will be denied. The Seller being the unsuccessful party will bear the costs of these motion proceedings (2 points x the applicable rate of EUR 2,300) plus statutory interest.

on the counterclaim

6.21.

The denial of the motion for document disclosure may affect the Seller’s strategy as to the counterclaim. Therefore, the Court will allow the Seller to express its view on the next steps in the counterclaim proceedings. Subsequently, the Purchaser will be allowed to respond.

7.Decisions

THE COURT:

on the original claim

7.1.

allows all parties to submit a brief on the issues listed in para 4.53 above
no later than 7 May 2025,

7.2.

directs the parties to send the drafts of their briefs to the other parties
no later than 23 April 2025,

on the motion in the counterclaim

7.3.

denies the motion,

7.4.

orders the Seller to pay the costs of these motion proceedings, quantified up to this judgment at EUR 4,600, with the provision that if these costs are not paid within fourteen days after the date of this judgment, statutory interest will be due from the fifteenth day after the date of the judgment,

7.5.

declares that paragraph 7.4 of this judgment is enforceable notwithstanding appeal.

on the counterclaim

7.6.

allows the Seller to express its view on the next steps in these proceedings
no later than 23 April 2025,

7.7.

allows the Purchaser to respond
no later than 7 May 2025.

Done by L.S. Frakes, C.W.D. Bom and N.A.J. Purcell, Judges, assisted by W.A. Visser, Clerk of the Court.

Issued in public on 5 March 2025.

APPROVED FOR DISTRIBUTION IN eNCC

1. As to the specific costs the Purchaser refers to the report drafted by Eight Advisory, an international financial due diligence party (Exhibit 22 Purchaser), the Eight Advisory Report

2 As to the specific costs the Purchaser refers to the Eight Advisory Report

3 Earnings Before Interest, Taxes, Depreciation, and Amortisation. The number represents the fiscal year to which the EBITDA relates

4 Under reference to the Damage Quantification Calculation Report prepared by Deloitte, (Exhibit 28 Purchaser), the Damage Quantification Calculation Report

5 This amount was EUR 25,000 in the writ of summons, but corrected in the pleading notes of the 20 January 2025 hearing

6 For the exact numbers see page 9 of the Eight Advisory Report: EUR 2,718k in total, which consisted of EUR 1,261 in deferrals, EUR 858k in P13 bookings and EUR 599k in communicated underperformance. The Seller did dispute the independence of Eight Advisory, but did not dispute the amount of deferrals, P13 bookings and underperformance ascertained by the investigator hired by the Purchaser

7 Supreme Court 6 April 1979, ECLI:NL:HR:1979:AH8595, para. 1

8 Supreme Court 11 March 2005, ECLI:NL:HR:2005:AR7344, para. 3.4.2

9 R.P.J.L Tjittes, “Commercieel Contractenrecht – Deel I: totstandkoming en inhoud”, published in 2022 by Boom juridisch (“Commercieel Contractenrecht”), chapter 3, pages 190 et seq.

10 Opinion of the Advocate General 18 September 2015, ECLI:NL:PHR:2015:1975, para. 6.99

11 Supreme Court 9 January 1998, ECLI:NL:HR:1998:ZC2537, NJ 1998,586
Van Dam v Rabobankpara 3.4 and

“Commercieel Contractenrecht” p. 198 and 201

12 Para. 4.3 of the Interim Judgment

13 Dated 31 August 2023, Exhibit 21 Purchaser

14 Dated 14 July 2023, Exhibit 20 Purchaser

15 Email 6 September 2023 from Crowe to the CFO, Exhibit 24 Seller

16 Exhibit 41 Purchaser

17 Exhibit 40 Purchaser

18 Exhibit 42 Purchaser

19 Exhibit 43 Purchaser

20 “ No go” is a common term to refer to an M&A transaction being cancelled

21 Exhibit 41 Purchaser

22 Para. 32 of Exhibit 19 Seller

23 Exhibit 12 Purchaser, answer to question 96

24 Page 19 of Exhibit 30 Purchaser

25 The words between brackets were added by the Court

26 Exhibit 36 Purchaser

27 Exhibit 36 Purchaser

28 Exhibit 37 Purchaser

29 Exhibit 37 Purchaser: “
Formeel was dit inderdaad niet juist. Wij begrepen de onderbouwing dat jullie in de praktijk niet altijd alles uitkeren en soms zelfs verlofsaldi van medewerkers vervallen. Maar als je de letter van de wet/regel volgt zou je alles moeten voorzien/reserveren.”

30 Exhibit 38 Purchaser

31 Exhibit 38 Purchaser:
“Lekker dit. Nou moet ik mijn keutel bij die smiegel in nemen. lk meld aan [the finance director] dat ze het op de oude manier mogen blijven doen maar dat wij het op de groep anders gaan inrichten (bluffen)”

32 Exhibit 39 Purchaser

33 Exhibit 51 Purchaser

34 See Warranty 4.5 of the Warranty Annex and the Pre-Completion Undertakings in Clause 7 of the SPA

35 Exhibit 11 Purchaser

36 Answer to question 94; not submitted as exhibit, but quoted in the Seller’s pleading notes as presented during the hearing

37 See the difference between the EBITDA 2022 of EUR 12,246k reported by [the CEO] on 12 December 2022 and the estimates EBITDA 2022LE (Latest Estimate) of EUR 12,746k in the VDD Report (Exhibit 11 Purchaser, page 20)

38 See the VDD Report

39 Eight Advisory Report, p. 7

40 Eight Advisory Report, p. 11

41 Eight Advisory Report, p. 9

42 Exhibit 11 Purchaser, page 20

43 Exhibit 14 Purchaser

44 Exhibit 48 Purchaser

45 Before regular adjustments by management

46 See the note confirming this phone call submitted as Exhibit 29 by the Purchaser

47 Exhibit 50 Purchaser

48 Before regular adjustments by management

49 Exhibit 17 Purchaser

50 Exhibit 41 Purchaser

51 Exhibit 43 Purchaser

52 Exhibit 11 Purchaser, page 20

53 As from 1 January 2025 this Article has been replaced by Article 195, but the pre-2025 provision still governs proceedings which have been made pending before this date; see Article XIIA of the Simplification and Modernisation of Evidence Law (
Wet vereenvoudiging en modernisering bewijsrecht, Staatsblad 2024, nr. 62)

54 Supreme Court 10 July 2020, ECLI:NL:HR:2020:1251, para. 3.1.4

Aansprakelijkheid voor fraude en schending van garanties in M&A transactie

Uitspraak

JUDGMENT

AMSTERDAM DISTRICT COURT

5 March 2025

1.Procedural history

2.The facts

3.The original claim

4.Discussion of the original claim

5.The counterclaim

6.Discussion on the motion in the counterclaim

7.Decisions