Background
A minor inherited approximately one-third of the shares derived from her deceased father’s 99% interest in a family-owned limited company. Acting through her mother, who held parental authority, she alleged that the other heir-shareholders had taken effective control of the company, refused meaningful access to company information, excluded her mother from the premises, and threatened to summon the police if her mother attended. She also alleged that the company had never distributed profits and that its articles made share transfers effectively impossible without every shareholder’s consent.
The minor sought dissolution of the company for just cause or, alternatively, permission to leave the company with payment of the real value of her shares, as well as a profit-distribution advance. The Gebze Commercial Court rejected dissolution and the profit claim but permitted her exit and awarded TRY 51,630,656.99, with statutory interest beginning when the judgment became final. Both sides appealed: the minor challenged, among other things, the rejection of dissolution and the interest start date, while the company disputed the existence of just cause, the adequacy of the valuation, and the refusal to appoint a representative guardian for the child.
The Court’s Holding
The appellate court held that just cause existed for the minor’s departure. Because the child was only nine or ten years old at the relevant time, her mother had the legal right and duty to manage and protect her property absent a contrary judicial order. The other shareholders’ categorical refusal to admit or cooperate with the mother, and the resulting hostile legal and practical relationship, therefore affected the child directly and made continued membership untenable. The court also found no direct conflict of interest requiring appointment of a guardian, noting that the mother was not herself a shareholder in the company.
The court agreed, however, that the TRY 51.6 million exit payment had not been established through an adequately reasoned, current valuation. The real value of an exiting shareholder’s interest must be determined as close as possible to the judgment date. Here, the real-estate figures dated from a June 2022 inspection, the company records were examined as of June 2022, and a later report updated prices to June 2023 without explaining the method. The report also combined discounted-cash-flow and adjusted-net-asset approaches using different weights without explaining why those weights were selected.
Because the company remained active and dissolution is a last resort, the appellate court upheld the conclusion that shareholder exit was the appropriate remedy rather than liquidation. It nevertheless vacated the entire first-instance judgment and remanded for a new or supplemental expert report determining the shares’ real value as near as possible to the new decision date. The court did not examine the parties’ remaining appellate objections at this stage, and its remand decision was final.
Key Takeaways
- Obstruction directed at a minor shareholder’s lawful parent-representative may constitute just cause for the child’s exit from a limited company.
- A court may preserve an operating company by ordering the complaining shareholder’s exit and payment of the shares’ real value instead of dissolving the company.
- An exit award must rest on a transparent valuation current to a date as close as possible to judgment; unexplained updates and unexplained weighting of valuation methods are insufficient.
Why It Matters
The decision confirms that Turkish courts will assess a minor shareholder’s practical ability to exercise company rights through the parent legally responsible for managing the child’s property. Other shareholders cannot avoid scrutiny merely by directing exclusionary conduct at the parent rather than at the child personally.
It also underscores the evidentiary discipline required in shareholder-buyout cases. Even where just cause and the appropriateness of exit are established, the award cannot stand unless experts explain their methodology and calculate real value using information sufficiently close to the judgment date.