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1. Introduction

The prohibition of treasury shares in limited companies is justified by the defense of creditors and - to a lesser extent - can be justified by the protection of minority shareholders. The fact is that treasury shares are a good solution as shown by the treasury shares of listed companies. 

However, treasury shares are widely used by family companies, especially when there are liquidity needs or there are tax reasons. 

We present the case of the sts 190/2019 that brilliantly solves an always controversial issue.

2. Background

We are faced with two confronting family groups. Some brothers against others. The epicenter of the conflict is the Aragonese company BARUES ZARAGOZA SA The subjects: 1 / on the one hand, the plaintiffs, Jesús Manuel, a brother, and the defendants, mother Ana, and the daughters - sisters of the defendant - Blanca and Camino. 

On June 2, 2005, BARUES ZARAGOZA SA is incorporated. The mother Ana and the children (6) are partners. The appointed CEO was one of the Jesús Manuel brothers. Later the capital was increased and other operations were carried out such as the constitution of another company BARUES VIVIENDA SL.

Later (2006-2007) the family decided to redistribute the assets and shares in the companies. Within these redistribution operations, the company BARUES ZARAGOZA SA was the owner of its own shares for a few moments until they immediately left to go to their final recipient. In the end the family patrimony of goods and participations is reorganized. Among the documents, swaps, a sale and a succession agreement were signed. These operations where Barues Zaragoza and another company in the group acquired their own shares were the object of the subsequent challenge. These operations were carried out in a single day in a notary's office. The objective of it was -as I have said- to reorganize the family patrimony.

In all these businesses in which Barues Zaragoza, SL participated, Jesús Manuel acted on his behalf as CEO.

In the judicial process, the desire of the two defendant sisters to get rid of the shares of BARUES ZARAGOZA SL was proven due to the risk operations that the latter was going to undertake, thus the desire to comply with the succession agreement between the mother and the six brothers.

3. Conflict

Years go by. Also although not indicated. The great crisis of 2008 arrives. On February 6, 2014, seven years after having carried out the aforementioned legal operations, Jesús Manuel and his wife Agueda filed the lawsuit that started the procedure against Ana, Blanca, Justa, Barues Zaragoza, SL and Cerrada Biel, SL (another company of the group), requesting the radical nullity of the exchange and sale of the shares, as it is contrary to the Law, in violation of article 40 of the LSRL, on derivative acquisition (treasury stock). 

3. Judicial Iter.

In the first instance, the claim is partially upheld and the acquisition of the shares by treasury stock of Barués Zaragoza SL is declared null and void, as well as the nullity of the immediate subsequent sale of these shares. Barues is also sentenced to return 1 Euros to the plaintiffs José Manuel and his wife.

The Hearing totally rectifies the judgment of the Court. It totally revokes the judgment of first instance and declares the treasury stock valid. 

Finally, the Supreme Court does not accept the appeal. It accepts the arguments of the Hearing.

4. Doctrine

We all know the ban on treasury shares. However, both the Zaragoza Court and the Supreme Court ruled that this prohibition has not been violated, since “the company barely held the ownership of its own shares, as it immediately transferred them in compliance with the share redistribution agreement among family members". 

“The ratio of the standard (art. 40.1 LSRL) responds mainly to the safeguarding of the effectiveness and equity integrity of the capital stock as a guarantee of the corporate creditors, which has not been affected in a case like this, in which the acquisition it was merely instrumental and the holding was so fleeting that it lasted what was essential for its immediate transmission for the same value.

The protection of the political and economic rights of the partners, which is also usually taken into account when analyzing the legal regime of the treasury stock, is not affected in this case either, since the contractual framework in which the exchange whose nullity is requested is framed, responds to the agreement that all the partners had reached to redistribute the ownership of the shares of the family patrimonial companies ”.

The TS uses a finalist or “ratio” interpretation, not literal, of the rule to establish that the treasury stock transaction was admissible. In my opinion, not only is a fair sentence obtained, but the rule is also made more flexible and adapted to the specific case. 

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