Dutch Court of Appeal Denies Interest Deductibility on Convertible Loan in Private Equity Acquisition Structure

Journal
Author
Bruggeman, J. (Jeroen); Voort, L. van der
Country
Netherlands
Published Date
Issue
Finance and Capital Markets (formerly Derivatives & Financial Instruments) 2019 (Volume 21), No. 5
FormatPDF
EUR
45
| USD
50 (VAT excl.)

The authors discuss a recent judgment passed by the Amsterdam Court of Appeal on the deductibility of interest expenses incurred by a Dutch acquisition vehicle in respect of a convertible shareholder loan. The case relates to the acquisition of a Dutch clothing chain by a French private equity firm. The Court of Appeal considered the interest expenses to be non-deductible under the abuse of law concept.