WILLEMSTAD — The Court of Appeal has declared Lovers Curaçao bankrupt, overturning an earlier ruling by the Gerecht in eerste aanleg and concluding that there was no abuse of authority by majority shareholder Vanddis in requesting the bankruptcy of Lovers Industrial Corporation.
In its judgment, the Hof van Justitie found that the financial situation at Lovers had deteriorated to such an extent that bankruptcy had become unavoidable. Vanddis argued on appeal that continued uncertainty was eroding confidence among employees, customers, and suppliers, while the company was no longer able to properly maintain its machinery.
The court accepted Vanddis’ position that it had a clear and legitimate interest in a rapid bankruptcy, including the possibility of a swift restart. That interest, the court noted, stems not only from Vanddis’ role as a creditor, but also as a shareholder and guarantor for Lovers’ bank debts. Those debts became immediately due after attachments were imposed by minority shareholder Lovers Industrial USA.
According to the ruling, the financial pressure on Lovers intensified further when the tax receiver placed attachments on all movable assets, including trucks and production machines. As a result, the company was no longer in a position to meet its salary obligations at the end of the month or to purchase essential ingredients for its products. The court noted that all of Lovers’ assets were encumbered by pledges or mortgages.
Efforts to reach an out-of-court settlement between Vanddis and Lovers on one side, and Lovers Industrial USA on the other, ultimately failed. The court stated that the minority shareholder demanded a level of security that could not be met. Lovers attempted to obtain a bank guarantee, but the bank required a further guarantee from Vanddis, which Vanddis was no longer willing to provide. Lifting the attachments, Vanddis argued, would not have resolved the underlying financial problems.
Lovers itself largely supported Vanddis’ arguments during the proceedings. The company did not initiate separate summary proceedings to lift the attachments, citing the legal risk that a court would likely find that the claims invoked by the minority shareholder were not manifestly unfounded and that a balancing of interests would not justify lifting the seizures.
Lovers Industrial USA, representing the children of the late Oswald van der Dijs, founder of the company, objected to how Vanddis and Lovers portrayed its actions. While maintaining that it had acted reasonably, the minority shareholder also indicated that it did not believe Vanddis was abusing its authority by filing for bankruptcy.
With the Court of Appeal’s ruling, the bankruptcy of Lovers Curaçao has now been formally established, bringing a long-running corporate and family dispute to a decisive legal conclusion.