Consistency of the valuation criteria and quotaholder’s burden of proof in challenging the financial statements
The Court of Naples, specialized section for business matters, in its judgment of June 26, 2025, ruled on the principle of consistency of the valuation criteria adopted in the drafting of financial statements, re-affirming the now consolidated case law according to which such principle, ensuring uniformity in the valuation methods applied across various financial years, does not legitimise the use of the same past criteria if it undermine a clear, true and fair representation of the company’s financial position, assets and liabilities, and the profit.
The case
The dispute originated from an action brought by an Italian limited liability company (S.r.l.), which was a minority quotaholder of another limited liability company in liquidation (the “Company”). The claimant, in particular, sought the annulment by the first instance judge of the Company’s resolutions approving the financial statements as at December 31, 2020, and determining the liquidator’s remuneration.
The appellant company argued that the liquidator had convened the quotaholders’ meeting for the approval of the financial statements as at December 31, 2020, with a significant delay compared to the statutory deadlines. Due to the liquidator’s inertia to convene the quotaholders’ meeting for the approval of the financial statements of the Company, the appellant company independently convened the quotaholders’ meeting, which nevertheless resolved not to dismiss the liquidator but to confirm his office, with the favourable vote of the majority quotaholder.
The quotaholders’ meeting for the approval of the financial statements as at December 31, 2020, was ultimately convened by the liquidator on November 30, 2021, and approved the financial statements with the favourable vote of the majority quotaholder and the dissenting vote of the minority quotaholder. The latter then challenged such resolution, alleging the breach of the principles of clarity, truthfulness and fairness of the financial statements, specifically with reference to the registration, among the debts of the Company for interest free loans granted by the quotaholders, of a debt arising from supplies of goods by the claimant.
The Company contested the claims, arguing that the delay in convening the quotaholders’ meeting was justified by the difficulties faced by the liquidator in reconstructing the accounting data, due to the failure of the former director to hand over the documentation. The Company also noted that the contested item had already been included in the financial statements as at December 31, 2019, prepared by the former director of the Company and that its classification as an interest free loan was confirmed by the fact that the claimant did not request the payment of the relevant invoices, concluding that the challenge should be dismissed.
The decision
The Court of Naples began with a systematic analysis of the invalidity regime applicable to the quotaholders’ meeting resolutions approving the financial statements of limited liability companies, reaffirming that the nullity (nullità) cases set out in Article 2379 of the Italian Civil Code are exhaustive. Among such cases are considered the quotaholders’ meeting resolutions having an unlawful subject (illiceità dell’oggetto), a category in which case law includes the approval of financial statements drafted in breach of the principles of clarity, truthfulness and fairness, as alleged in the present case.
The Court of Naples clarified that a quotaholder’s entitlement to challenge a quotaholders’ meeting resolution of a company originates from the need to receive reliable and transparent accounting information, which is essential for making informed decisions regarding their interest in the company.
However, the standing to challenge such a resolution is subject to the raising of specific objections to management actions performed by the liquidator and how these affect the company’s financial statements. The claimant bears a strict burden of proof, which requires him to specifically identify the items in the financial statements deemed irregular and to indicate how they violate the law.
In the case at hand, the Court found that the claimant’s writ of summons focused mainly on criticism of the liquidator’s conduct, rather than on identifying actual defects invalidating the quotaholders’ meeting resolution or concerning the approved financial statements. The defendant Company invoked the principle of consistency of valuation criteria, arguing that the disputed classification was lawful as it conformed to valuation methods adopted in prior financial years.
The Court of Naples, consistent with the Italian Supreme Court, reaffirmed that the principle of consistency of valuation criteria used in the drafting of financial statements shall not be invoked to perpetuate drafting methods that undermine a clear, true and fair representation of the company’s financial position, assets and liabilities, and profit. At the same time, if a quotaholder challenges an item valued in accordance with drafting criteria previously agreed upon and used in past financial statements, the quotaholder shall also provide unequivocal evidence of the caused lack of clarity, truthfulness and/or fairness.
Since in the present case this burden was not met, the Court of Naples found the claimant’s action unfounded and dismissed the challenge to the resolution.