FRANCE Law and Practice Contributed by: Elodie Mulon, Jennifer Tervil, Romane Lemaitre and Emmanuelle Bonboire-Barthélémy, Chauveau Mulon & Associés
For unlisted securities, the market value may be estab - lished by a combination of relevant methods, such as the mathematical value or the yield value, in order to approximate the market value as closely as possible (Court of Cassation, Commercial, Financial and Eco - nomic Chamber, 6 November 2012, No 11-25.878). This valuation may include adjustments, such as dis - counts for lack of liquidity or control. • Discount for lack of liquidity: lack of liquidity may justify a discount on the market value, particu - larly for unlisted securities. This discount reflects the difficulty of trading these securities on a regulated market. For example, a 30% discount was approved for unlisted securities due to their absence from the market and their low turnover compared to comparable companies (Paris Admin - istrative Court, 1st section, 1st chamber, 1 July 2025, No 2315396, No 213064). However, the tax authorities may challenge the amount of the discount if it is not sufficiently justified or if it exceeds the reasonable limits established by case law. The valuation method must be rigorous and based on relevant comparisons. • Discount for lack of control: the discount for lack of control applies to minority shareholdings to reflect the lack of decision-making power associated with these shareholdings. This discount is justified by the fact that minority shareholders cannot influence the company’s strategic decisions. 5. Wealth Disputes 5.1 Trends Driving Disputes The most common disputes concerning inheritance are those relating to: • the nullity of a will or a gift and therefore to the distribution of the estate assets; • disagreements between heirs over the composition and valuation of the estate assets; • the existence of a life insurance policy that benefits an heir or a third party; or
• the existence of gifts made by the deceased during their lifetime to the detriment of certain heirs who feel they have been wronged. Where trusts are concerned, disputes may arise as to their validity and recognition in France. This is because there can be a conflict between the law governing an estate, for example French law, and the concept of a trust, which does not exist in French law. If French law applies to the succession, a trust cannot override the heirs’ reserved portion; whereas if the applicable law does not recognise the reserved portion, but does recognise trusts, then the latter will be recognised and applied in France. Like all contracts, fiduciaries often give rise to disputes relating to the interpretation of the terms and condi - tions of the contract, its performance, particularly as regards the fiduciary’s obligations, and its termination. Thus, unless mediated, disputes involving foundations most often result in legal actions based on contractual liability. In addition, the parties to the fiduciary con - tract may be exposed to criminal and tax penalties if they commit offences (tax fraud, bankruptcy, money laundering, etc). Lastly, disputes involving foundations mainly con - cern their recognition as being in the public interest in terms of meeting the non-profit-making public inter - est requirement. 5.2 Mechanism for Compensation In wealth disputes or disputes involving trusts, fidu - ciaries or foundations, the harm caused to an injured party is made good by awarding damages, either on the grounds of extra-contractual liability, or on the grounds of contractual liability, particularly relating to fiduciary or foundation contracts. In principle, all losses, whether material or moral, are eligible for compensation. In the case of an inheritance dispute, damages may, for example, be awarded for the commission of an inheritance fraud or the abusive exercise of usufruct rights to the detriment of the bare owner (squandering of funds) or the concealment of an heir.
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