On 27 November 2024, the Commercial, Financial and Economic Chamber of the French Supreme Court (Cour de cassation) upheld the obligation of a simplified joint stock company (société par actions simplifiée – SAS) to disclose its accounting documents when such information is required for a forensic examination ordered by a judge (appeal no. 23-17.536) to value its shares. This ruling is part of a recurring debate on the difficulties encountered in obtaining the documents needed to assess the value of a company’s shares.

Background and stakes of the case

At the heart of the dispute was a disagreement over the valuation of the shares of a former director and shareholder of an SAS.

Article 14 of the company’s articles of association stipulated that the determination of the price of the shares following the cessation of activity of an executive shareholder was a matter for a collective decision by the shareholders, or by an expert appointed in the event of disagreement.

However, the company refused to provide essential financial documents covering several financial years. The claimant therefore sought the intervention of the interim relief judge to force the company to produce these documents.

The Court’s decision:

The Court of Cassation dismissed the Company’s appeal refusing to disclose the accounts.

The refusal to disclose these documents constituted a manifestly unlawful disturbance for the Court of Appeal. The Court of Cassation confirmed this analysis.

According to the Court, all parties must comply with court rulings, including access to documents required for expert appraisals, despite any clauses in the articles of association or internal rules that might restrict access.

This reasoning is based in particular on article 873 of the Code of Civil Procedure and article 1843-4 of the Civil Code, which provide that the valuation of company rights must be carried out within a transparent framework when the articles of association do not set out an explicit valuation method.

This decision is in line with previous rulings favouring transparency in disputes between partners.

According to the Cour de cassation:

‘ It follows from the combination of article 873 of the Code of Civil Procedure and article 1843-4 of the Civil Code that, in the event that the articles of association or any agreement binding the parties do not lay down rules for valuing the company’s rights but only provide for the methods of doing so, a party may be enjoined, in summary proceedings, to disclose any document that the expert responsible for determining the value of these rights indicates as being necessary for the performance of his task’.

This ruling therefore reiterates the expert’s power to request all documents that are useful for his mission, and the support of the judge in ordering the disclosure of these documents in the event of a recalcitrant party.

This ruling highlights the importance of providing simple and clear mechanisms for valuing a company’s shares. The absence of rules inevitably leads to lengthy and therefore costly expert appraisals, which in the meantime complicate company life. It is therefore preferable to include a simple and effective method of calculating the value of shares in the articles of association or in a shareholders’ agreement, in order to settle these issues quickly.

By Olivier Vibert, Lawyer, Paris