French Supreme Court Rules Subsidiaries’ Works Council Entitled to Appoint an Expert During Mergers and Acquisitions Notified to the EU Commission

By on July 21, 2011
Posted In Employment

Cassation, the French Supreme Court, held that all the entities, whether directly or indirectly subject to a change of ownership, are parties to the concentration.

 

 

 

 

Decision

The Cour de Cassation, the French Supreme Court, held that all the entities, whether directly or indirectly subject to a change of ownership, are parties to the concentration.

The works council of Organon Biosciences’ French subsidiaries was therefore entitled to appoint an expert.

What Does This Mean For Companies?

Once the Commission has published its press release announcing the concentration, the works council may decide to appoint an expert (usually a chartered accountant) to help the French subsidiary and employees understand the consequences of the concentration, regardless of how far removed the French subsidiary may be from the main parties involved.

The expert is entitled to request from any company involved in the concentration any information relevant to the concentration. Given the expert’s very broad powers of investigation, the works council has every reason to insist on appointing one.

Amongst other things, the expert’s investigations often reveal to the works council key information on the integration of the new entities. It is crucial, therefore, to bear these powers in mind when establishing and managing any concentration in France.

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