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In a landmark victory led by Fieldfisher’s Amsterdam office, the firm successfully represented the trustee of Dutch fashion brand Etam Group against businessman Martijn Rozenboom. The court's decisive ruling found Rozenboom responsible for the company's bankruptcy and ordered him to pay €2 million.
Amsterdam – European law firm Fieldfisher has successfully represented the trustee of the Etam Group in a significant legal battle against Dutch businessman Martijn Rozenboom. The trustee, overseeing the bankruptcy of the Dutch fashion brand, sued Rozenboom under the Dutch rules for directors' liability in bankruptcy.
In 2020, a group of companies managing some renowned Dutch fashion brands went bankrupt. The trustee sold most of the assets to a new group ultimately controlled by Martijn Rozenboom. Rozenboom, known for acquiring retail chains out of bankruptcy, discontinued funding the new group within six months, citing the Covid lockdown as an excuse. This led to the bankruptcy of the acquiring entities. Consequently, the trustee of Etam Group decided to sue Rozenboom for the deficit in the bankruptcy, enlisting Fieldfisher Amsterdam for representation.
After almost two years of intense litigation, the Amsterdam district court ruled last week, holding Rozenboom liable for the entire deficit amount in the bankruptcy. While the exact amount will be determined in a separate procedure, the court ordered Rozenboom to pay an advance of €2,000,000.
The trustee’s legal team was led by Dispute Resolution Partner Marcel Willems, alongside the wider disputes team in Amsterdam, including Associate Rowan Hamer.
Marcel Willems commented:
Although demonstrating the mismanagement of the relevant entities was quite easy, successfully holding Martijn Rozenboom personally liable for the deficit in the bankruptcy was not.
For that purpose, the court had to accept our position that the director of a foreign legal entity – in this case, a Swiss company – acting as the director of the Dutch entities that went bankrupt can at the same time be seen as the shadow director of those Dutch entities.
The court accepted our position, despite a decision by the Dutch Supreme Court that can be seen as supporting Rozenboom's position. Secondly, the court had to reject Rozenboom's defence that the complete breakdown of sales, caused by the lockdown measures, was the real cause of the bankruptcy, rather than his alleged mismanagement.
The court rejected this defence by pointing out that it was a management decision to immediately stop using the funds still available at the level of the group entity that acted as the financier of the operating entities. We are waiting to see if Rozenboom will continue the battle and lodge an appeal or if he will cut his losses by striking a deal with the trustee.
This judgment is a great triumph for the Fieldfisher Amsterdam dispute resolution team and showcases the innovative and tenacious approach of the firm.