Netherlands Enterprise Court and the Boer Companies

In Episode 4 “Fight for the Shares”, the Netherlands Enterprise Court appointed independent director H.V. In episode 10 “Lies in the Courtroom”, I wrote:

“An independent director, H.V., was supposed to investigate what was going on. And digging into the work of H.V., it appears his independence can be called into question. More in an upcoming episode.” Why am I questioning his “independent involvement”? 

The Netherlands Enterprise Court 

The Netherlands Enterprise Court, as a special branch of the Court of Amsterdam, is charged with handling and deciding on procedures nationwide such as “launching an enquiry into and taking immediate measures regarding applications to investigate mismanagement (enquiry procedure, sections 2:344 to 2:359 of the Netherlands Civil Code).”

The enquiry procedure was requested by M.M. As a result, the Netherlands Enterprise Court was authorised on the basis of Section 2:345 of the Civil Code to appoint one or more persons to investigate the management and operations of the Boer companies. This is called a ‘first-phase’ investigation and can comprise remediation and restoration of healthy relations in the company. If the first phase is unsuccessful, a second-phase decision may establish that the company has been mismanaged. 

I spoke with the lawyer D.S. about the Netherlands Enterprise Court. What I thought was that the Court was a bunch of wise men who helped feuding shareholders reach agreement. What a benefit to the interests of the Dutch business world and working people! Truly a noble aim.

The lawyer D.S. awakened me from that dream.

“The Netherlands Enterprise Court is an old boys’ club whose members, the judges and investors, meet each other on the golf course and in service clubs like Rotary, Kiwanis, Lions and Round Table. What they do first is look at if it’s worthwhile to approve a given application for enquiry. The standard they use is that a) there are sufficient liquid assets in the company to pay the hourly rate of €300 to €500, and b) if there is patented technology. This sounds strange, but the investors in the Enterprise Court network are out after patents. If a company has a lucrative patent, the Enterprise Court can push the company to bankruptcy and relaunch or force a takeover. In both cases, the patent falls into the hands of the investor, who shares the profit with the ‘investigator’”. 

D.S. then added:

“I speak from personal experience. I had a patent for a waste water treatment system. There was disagreement in the board, the Enterprise Court stepped in, I was financially “wiped out” by the legal costs, and the investor watching from behind the scenes took over the company and the patent. I know a lot more instances where similar things have happened.”

The Boer companies

On 10 March, the Netherlands Enterprise Court appointed H.V. as the independent director of SWB and SWB Shipping. The shareholders M.M. and Luna Vermeulen were suspended and the shares were managed by M.W.E.E, who was also appointed by the Enterprise Court. And behind these men were lawyers ready to make sure decisions were carried out, under compulsion if necessary.  

All the time I was thinking: Great arrangement. Wise men, wise decisions. So in a few short months, the Boer companies would be back to normal. Friendly atmosphere, good profits, and a clean break from the culture of greed and neglect. Because nobody can make a mess of things like this bunch of employees. They threw literally everything around. From milk bottles to welding trolleys. And the gate was always invitingly open. Just drive in, put a half-empty can of paint in your car, and slip back out again. In short, with the arrival of a smart independent director, the company would be back in the swing of things. 

Nope.

The lawyer D.S. had already warned me: the independent directors are out to earn money. Money that ailing companies like SWB Shipping and SWB had to cough up. Tens of thousands of euros per month. Every month these gentlemen were “at the helm”, the companies sank deeper into debt. 

Let me run through the things the independent director H.V. should have done between 10 March and his departure in August. That was a period of 5 months. 

– Investigate the activities of M.M. (see Episode 3, “The M.M. Swindle” and Episode 6 “Fair Hearing: What the Boss of SWB Thinks”.

– Make an inventory of neglected maintenance and start getting the cranes certified. As R.B. described it: “A matter of the highest priority.”

– Contact debtors for payment.

– Make arrangements for payment of creditors, including the tax authorities. 

– Implement government health and safety regulations.

– Guarantee security by stringent control of incoming and outgoing vehicles. 

– Sell the push barges at the proper price and use the money to pay the debts of SWB Shipping to SWB.

– Sift through the ABN-AMRO financing of the push barge Nautica 18 and get the repayment on track.

– Open the door to employees of SWB to express their concerns, communicate, hear their ideas, etc. 

None of that happened. 

What the man did do was:

– H.V. spent weeks studying the situation in which the Boer companies found themselves. The lawyer D.S. warned me about that: “First, 100 to 200 hours are spent getting an idea what is going on.” Let’s say 150 hours at €400, that’s €60,000 in expenses. The actual amount may be a little more or less, so I’ll hear that from H.V. 

– H.V. didn’t manage to establish a settlement agreement between the shareholders M.M. and Luna Vermeulen. This was one of the most important purposes for which H.V. was appointed. 

–  H.V. accused Caroline Vermeulen, with whom he got along well with at first, of embezzling €148,815. He called in his lawyer on 18 June, and on 28 June made a report to the police. If prosecuted, Caroline Vermeulen could be convicted and sent to prison. We will go into this in Episode 13, entitled “Holding the Daughter Hostage for Hand-Over”.

– H.V. seized €50,000 in rent that SWB paid monthly to the landlord, Boer Vastgoed. He did that on improper grounds. He lent a helping hand to Rabobank, which made a claim of €2.9 million on Boer Vastgoed and as a result, levied executory third-party attachment on SWB. The bank said that it would not execute the seizure until it was decided on appeal. This gave H.V. the improper opening to demand the €50,000 in rent back over a period of 26 months. All together that’s €1.3 million. 

– To force Luna Vermeulen’s hand, H.V. levied an attachment on all her enterprises and bank accounts. 

What I see isn’t the rescue of the Boer companies, but backing shareholder Luna Vermeulen into a corner in the hope that she would give up her opposition. This was done with gross violence, including holding her daughter hostage. 

Luna had to make way for M.M., who would obtain ownership of SWB Shipping and SWB, as well as the land on which SWB is located, if possible. 

It’s clear enough. And the reason is easy to guess. M.M. has a side-line that is valued by his investors. SWB makes cheap push barges that are leased for a song to shipping companies who use them for business. And M.M. could have a one-third share in that business. Yes, you heard that right. We have the proof in our hands and will reveal it in another episode. 

Patent

Can I close with the interventions of the Netherlands Enterprise Court in shutting down companies? I will go back to my conversation with the lawyer D.S. 

“In the background there are investors who are on the hunt for patents”. 

Patents—what for? I go searching in the maze of my thoughts, and… Bingo! It must be the two docks. They are based on a unique concept whereby air is blown under the compartments so that the dock can lift a ship within an hour. It can be done proportionally, just the back sections or the front sections for screw or bow repair, or the whole dock, and—that’s it! In 2020 I advised Leo Boer to patent the docks. His answer then was: 

“Oh Peter, why should I? Anybody can just steal the idea.”

  Then I said:

“But what about all that specific knowledge in your head? There’s a lot more to it than that. Those docks are unique. There is hardly any maintenance compared with traditional docks, and… ”

  “Oh, Peter….”

There was specific industry knowledge at SWB. When I confronted the lawyer D.S. with this, she said:

“Is the technology patented?”

“No.”

“The investor behind the Enterprise Court isn’t interested anymore. Anybody can copy the design of that dock.”

One day after this conversation with D.S., Luna Vermeulen’s lawyers had a stiff talk with H.V., M.M., and his lawyer. And, amazingly, H.V. gave in. Even worse, he asked to be turned loose as quickly as possible on the condition that he was given immunity. That’s not something H.V. would say lightly—the man must have been up to some shady business. Thus, lawyer D.S.’s hypothesis may be correct.