News Milk
Milcobel withdrawals also win in proceedings on the merits
A group of fifteen Flemish dairy farmers have been found in their favor against the Milcobel cooperative on appeal. This person should not have refused terminations and may not spread the payment of the so-called divorce share over a period of five years.
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This has been pronounced by the Enterprise Court in Dendermonde. The fifteen livestock farmers were part of a much larger group of dropouts who wanted to leave Milcobel in the spring of 2021. Milcobel feared that a total of up to 440 million kilos of milk could go away, which could have a major negative effect on the company.
For this reason, the cooperative board decided to put up a dam and announce a temporary withdrawal freeze and, in order to discourage withdrawals in general, to spread the payout of registered capital over a period of five years. This was laid down in the Articles of Association on 15 June last year.
In a first ruling last year, the leavers were already in the right. Now back in the proceedings on the merits, which is a setback for the Belgian cooperative.
Legal law members
The court rules that what Milcobel has determined is not possible. Firstly, members of a cooperative cannot be denied the right to terminate in a general sense. This is laid down in Belgian law (Companies and Associations Code). In addition, the cooperative should not have applied the provisions of mid-June retroactively to members who had previously indicated that they wished to leave, according to the court, which also declared the payment in installments of the invested capital unlawful. This capital must be repaid as soon as possible. The fifteen members indicate that they have more than €500.000 in credit.
Occupation Milcobel
Milcobel reports that it will not appeal the decision on the withdrawal right. However, against the stipulation that it cannot decide for itself how long it wants to spread out the repayment of the members' assets. According to Milcobel, this point affects an essential point in the current articles of association, which has been approved by a majority of shareholders and which should therefore apply to all shareholders without distinction, including those who have already given notice.
An appeal has no suspensive effect on the current ruling.