CORPORATE | Italian Supreme Court on alleged breach of the “divieto di patto leonino” principle

On 22 October 2024, the Italian Supreme Court issued its Ordinance No. 27283 concerning the request to declare null and void a shareholder agreement for breach of Article 2265 of the Civil Code, which prohibits the exclusion of shareholders from profits or losses (the so-called “divieto di patto leonino”). In the context of an exchange of shares (“permuta azionaria”), a shareholder undertook to keep indemnified another shareholder in case the value of the transferred shares would have been lower than an agreed threshold at a certain reference date. The claim did not find acceptance from the Court, which (a) qualified such clause as a put option, and (d) deemed the same valid, since it did not imply a total and permanent exclusion from profits or losses, as requested under the consolidated interpretation of the Italian Supreme Court for devising a breach of “divieto di patto leonino” principle.

Newsletter n. 102 – December 2024