CROATIA Law and Practice Contributed by: Iva Basarić, Marija Gregorić and Matija Skender, Babic & Partners
ject to the consent of other shareholders (or a particular shareholder) or the target company. Such limitations may be imposed with respect to the transfer of shares in joint stock compa - nies, where in particular situations the Articles of Association may also subject the transfer of shares to the consent of the target company. The Articles will typically list the reasons for which consent can be withheld, but if the Articles are silent on those reasons, the consent may be withheld only if doing so would be in the inter - est of the target company. 9.4 Directors’ Duties General rules apply to directors’ duties when enacting defensive measures. 9.5 Directors’ Ability to “Just Say No” Directors of the target company are not able to prevent the deal from occurring, but to a certain extent they may be able to influence the share - holders examining the takeover offer to decide against accepting an offer by voicing their con - cerns with the transaction in the opinion that the management is required to issue on the takeover offer (see 8.1 Principal Director’s Duties ). Litigation is rather rare in Croatia in connection with M&A deals (please also see 3.1 Significant Court Decisions or Legal Developments ). 10.2 Stage of Deal Disputes related to M&A transactions (which would most typically be decided in arbitration rather than litigation, so the decisions are com - monly not publicly available) would primarily be brought after the closing, most likely in connec - 10. Litigation 10.1 Frequency of Litigation
tion with breaches of particular provisions of the SPA. 10.3 “Broken-Deal” Disputes Broken-deal disputes are not common in Croatia and there is no significant case law in this area.
11. Activism 11.1 Shareholder Activism
Traditionally, shareholders in Croatia were gener - ally rather passive, but in recent years the market has seen a number of associations of minority shareholders of different local companies. The association that probably gained most visibil - ity in the media was the association of minority shareholders of Agrokor, the local giant whose insolvency was dealt with in a special insol - vency procedure designed immediately prior to the initiation of the insolvency proceedings. The association of minority shareholders actively tried to abolish the new legislation that put the new insolvency proceedings in place. It was mostly not successful in its endeavours, but it did raise awareness of shareholder activism as a means of protection for all shareholders, includ - So far activists have predominantly not focused on encouraging companies to enter into M&A transactions or similar. Rather, activism has focused primarily on protecting the interests of minority shareholders, although often with not much success. Another area where shareholder activism has gained more traction is the issue of the payment of dividends. ing minority shareholders. 11.2 Aims of Activists
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