Shareholders were disqualified from participate in the vote at the company's general meetingi avstemning på selskapets generalforsamling

Fair Group AS is a company whose purpose is to conduct debt collection activities. It has multiple shareholders, the two largest being Cerebus AS and Bilforum AS. In August 2023, the company sold its operating assets to a newly established company wholly owned by Bilforum. These assets were subsequently resold to a third company, owned by Bilforum and two other shareholders of Fair Group.

Cerebus claimed that the sale had been made at an undervalue and requested an extraordinary general meeting of Fair Group to consider a proposal that the company initiate legal proceedings seeking reversal of the transactions. The proposals were rejected, notably after Bilforum and the two other shareholders involved in the purchasing companies voted against them. Cerebus argued that these shareholders were disqualified from voting due to a conflict of interest and brought legal action against Fair Group seeking to have the decisions declared invalid.

The Supreme Court, in line with both the District Court and the Court of Appeal, held that the shareholders in the companies that acquired Fair Group’s assets were disqualified from participating in the vote on whether to initiate legal proceedings. The shareholders had a significant interest in the matter that could conflict with the company’s interest, see section 5-3 subsection 4 of the Companies Act. The Supreme Court stated that it is not necessary, in this context, to assess whether initiating legal proceedings would be in the company’s best interest. That decision rests with the general meeting, properly constituted.

The judgment clarifies the conditions under which a shareholder is disqualified from voting at a general meeting in limited liability companies.

Read the judgment from the Supreme Court (Norwegian only) (PDF)

Area of law: Company law, section 5-3 of the Companies Act

Key paragraphs: 57–58, 64.

Justices: Falch, Høgetveit Berg, Hellerslia, Sivertsen, Poulsen