Milan court decides which are the consequences of violation of a bylaws right of first refusal

The shareholders entitled to a bylaws right of first refusal, who were not informed of the share transfer, have a right to damages. However, they are not entitled to obtain a preventive seizure of the transferred shares from the third party. While the violation of the right of first refusal has effects on the third party’s position (because the share transfer is ineffective vis-a-vis the company), the shareholders whose rights were violated have no right to redeem the shares from a third party. Hence, no right to obtain a specific injunction (available to one who might have a property interest).

The right of first refusal is not an option to buy that can be object of a remedy of specific performance – It only sets forth a duty to inform (whose breach entitles to damages): the prospective transferor is always entitled to change his mind, to reject the offer to purchase by calling off the transfer. Tribunale di Milano, March, 9, 2015.

For more information: Francesca Giannoni-Crystal