The Czech Supreme Court has addressed the question of the precise time when a shareholder’s interest in a limited liability company ceases to exist if that interest is included in a bailiff’s execution warrant. In a decision on September 19, 2017 (file no. 29 Cdo 5719/2016), the court argued that in order to determine when a shareholder’s interest expires, it is essential to consider whether that interest is – even to a limited degree – transferable.
If a shareholder has a non-transferable interest and this is subject to a bailiff’s execution warrant, the interest will cease to exist when the warrant takes effect (i.e. after the failure to meet the deadline for providing the required performance) or on the effective date of a court decision dismissing the petition to stay an execution warrant assuming such a petition was filed.
If the shareholder’s interest is transferable, it will expire when the share is auctioned off or when the limited liability company is notified of its repeated failed auction.