Investors claim legal success against Dexia
25 August 2004 , AMSTERDAM — Investors in a controversial share lease scheme have scored a legal victory with Amsterdam Court ruling that investment contracts should have been co-signed by the partner of the involved investors.
25 August 2004
AMSTERDAM — Investors in a controversial share lease scheme have scored a legal victory with Amsterdam Court ruling that investment contracts should have been co-signed by the partner of the involved investors.
This means that the contracts without the co-signature of an investor's partner or spouse have been declared invalid. Dexia Bank will as a result have to pay damages, Dutch public news service NOS reported.
The case was lodged by the Eagalease foundation, which represents about 16,000 investors. The crucial question in the case was whether the share lease contracts could be seen as "hire purchase agreements" and the court gave an affirmative ruling on Wednesday.
It is a normal for the partner of the buyer to also sign a hire purchase agreement — a purchase made on installment or credit. The requirement prevents one person individually loading a household up with financial problems.
Eegalease had demanded that the court immediately declare all share lease contracts which only one signature to be null and void, but that demand was dismissed. Instead, the judge ruled in three individual cases that full damages be awarded to the investors.
According to Eagalease, the next step is to demand power of attorney on behalf of the partners and use that in court to nullify the existing contracts.
Dexia is appealing the court's ruling.
The bank is locked in a battle with about 92,000 investors who borrowed money from the finance company to invest in the stock market in recent years. This is known as a share lease scheme.
The investors were left with large debts when stock prices fell and the resulting conflict between Dexia and disgruntled investors is the largest collective legal battle in Dutch history.
[Copyright Expatica News 2004]
Subject: Dutch news