A decade after the OAD insolvency precipitated by Rabobank, the appellate proceedings concerning OAD‘s dispute with Rabobank are set to commence on 13 September. Attorney Jan Michiel Wagenaar, representing OAD, has been refining the legal arguments and amassing supplementary evidence for the appeal. Wagenaar is also the Dutch lawyer for the European Fund Recovery Initiative (EFRI) in the Payvision case.
The OAD Bankruptcy Case
In September 2013, Rabobank elected to terminate its credit arrangement with OAD, a travel entity experiencing financial challenges. At the juncture of termination, OAD‘s financial obligations were circumscribed and adequately collateralized. However, Rabobank, in its prudential assessment, anticipated imminent fiscal challenges and opted for a preemptive termination.
OAD contends that, notwithstanding the contractual provisions permitting either party to terminate the agreement, Rabobank‘s decision was inconsistent with principles of equity and good faith. OAD posits that Rabobank‘s actions precipitated its insolvency and asserts that Rabobank should be held accountable for the resultant damages.
In 2015, OAD initiated legal proceedings against Rabobank. Subsequently, in 2019, the Court of Central Netherlands mandated OAD to furnish additional evidence, specifically to substantiate their claim that Rabobank had, during a pivotal week of takeover negotiations, assured OAD of an extended timeframe for the completion of said takeover. This assurance, OAD alleges, was conveyed telephonically between the then King’s Commissioner and Rabobank’s senior leadership.
Regarding the 2013 termination of the credit agreement by Rabobank with OAD, the court adjudicated that Rabobank‘s decision to terminate was within its legal rights and was not deemed inequitable. This termination subsequently led to OAD‘s declaration of bankruptcy. OAD attributes its insolvency to Rabobank’s actions, asserting that the bank should have accorded them a more extended period. To this end, OAD has sought legal redress, aiming to establish Rabobank‘s liability in the bankruptcy proceedings.
The Appeal
OAD appealed the trial court’s judgment and said: “The Utrecht Court, in its prior judgment, opined that this matter necessitates a meticulous review by the Supreme Court. Notwithstanding Rabobank’s persistent endeavors to either defer or obviate the appeal, the hearing date stands confirmed.“
OAD lawyer Jan Michiel Wagenaar states, “The new evidence encompasses a revelatory witness testimony and a financial expert’s report detailing pertinent calculations. OAD has meticulously documented an account of 33 instances where Rabobank breached its own protocols and fiduciary duty. These transgressions by Rabobank culminated in severe financial repercussions for OAD, ultimately leading to its unfortunate insolvency.”
OAD underscores that the Utrecht Court previously posited that a bank must egregiously overstep to be deemed in breach of its fiduciary duty. However, the current dossier unequivocally indicates Rabobank‘s excessive transgressions.
The pivotal issue for the appellate court’s determination is whether Rabobank breached its fiduciary duty and acted in the best interests of its client, OAD. The shareholders of OAD contend that Rabobank‘s professional financial counsel and solution-driven guidance were markedly deficient, particularly given OAD‘s history as a consistently compliant and punctual client.
Advocating for OAD, Attorney Wagenaar accentuates the necessity for an impartial and comprehensive appellate review. He asserts, “The exhaustive case file, supplemented with additional evidence, incontrovertibly establishes Rabobank‘s recurrent and systemic breaches of its fiduciary duty. Such aberrant conduct by Rabobank inflicted substantial financial harm upon OAD and its stakeholders, culminating in its insolvency. Such an outcome was avoidable. We remain sanguine that the Court of Appeal will render an equitable verdict, thoroughly evaluating Rabobank’s fiduciary obligations throughout the pertinent timeframe involving the Special Assets department.”
OAD‘s shareholders are optimistic that the appellate proceedings will yield a just resolution and appropriate redress for the incurred damages, estimated at €70 million. The societal ramifications of this case are profound, affecting thousands of travelers, rendering 1,550 employees jobless, and resulting in shareholders losing their entire enterprise.
