News Potatoes
'Term of transfer Avebe shares unclear'
The resignation condition regarding the notice period, which starch producer Avebe uses when terminating its membership, is unclear. That is the judgment of the court in Leeuwarden. A number of former members filed a lawsuit against the cooperative.
A number of arable farmers submitted the delivery obligation and transfer obligation to the court. On Tuesday, March 26, the court in Leeuwarden made a decision about the matter† The potato growers grew starch potatoes for Avebe in the 2013/2014 season. At the time, they were unable to meet their delivery obligation, because the entrepreneurs were of the opinion that the cooperative was not paying a competitive price.
Avebe therefore imposed a fine on the companies, after which the companies canceled their membership. However, as a result, the cooperative kept them to their exit condition.
Penalty for non-delivery
Te Biesbeek Lawyers from Zwolle writes on their website that Avebe has a delivery obligation to insure itself of sufficient potatoes. By issuing shares (equivalent to 4 tons of potato starch per share), the growers have a delivery right. If the delivery obligation cannot be met, a fine of €125 per tonne of starch not delivered will be deducted.
The transfer obligation was also denounced. Before termination of membership, a member must transfer its shares to a third person. If this does not happen, Avebe will take the shares. The arable farmer must then also pay a fee of €681 per share.
Both the obligation to deliver and the transfer of shares gave the arable farmers a constraining feeling, especially when Avebe cannot offer a price that is above cost. They say that they are forced to sell their potatoes elsewhere, at a higher price. Colleagues are also not always interested in taking over shares.
Fine rightly
According to the Court of Appeal, the fine charged by the starch cooperative for failing to comply with the delivery obligation is justified. The growers have knowingly failed to fulfill the delivery obligation. There were no circumstances whereby the fine could be moderated.
It has a different opinion about the exit condition. "Conditions are allowed, but Avebe has granted the arable farmers an unreasonably short period of time. The cooperative should have given the members at least 6 months (after termination)", it says. The requirement to do this before the termination of the membership then constitutes an obstacle. This affects the freedom of withdrawal.
The court concludes that Avebe can no longer claim the negative value of €300 per share, which was active in 2014. The obligation to pay compensation for the share is therefore reduced by the Court of Appeal to €381 per share.
Niels van der Boom
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