Case IX GC 64/12 JUDGMENT IN THE NAME OF REPUBLIC OF POLAND November 22, 2012 District Court in Krakow, IX Commercial Division composed of: Chairman: Cłerk: District Court Judge Grzegorz Mazur Senior court recorder Małgorzata Wegrzyn after hearing on November 22,2012 in Krakow proceeding in a case brought by Jan Domanus, Andrew Kozłowski and Izabeła Kozłowski against KRAKOW BUSINESS PARK Ltd. in Zabierzow with incidentał intervening of Adam Swiech for dissołution of company l. petition is denied; II. orders the Płaintiffs Jan Domanus, Andrew Kozłowski and Izabeła Kozłowski to jointły pay to the Defendant KRAKOW BUSINESS PARK Ltd. in Zabierzow the sum ofPLN 58,737.00 (fifty eight thousand seven hundred thirty seven) as repayment of the court costs; III. orders the Płaintiffs Jan Domanus, Andrew Kozłowski and Izabeła Kozłowski to jointły pay to Adam Swiech the sum of PLN 6,797.00 (six thousand seven hundred ninety seven PLN) as repayment ofthe court costs. SealoJ District Court in Krakow Case IX GC 64/12 [Stamp): appropriate signatures a.ffixed on the original Certified true copy Malgorzata Wegrzyn, Senior Clerk
Judge Grzegorz Mazur denied motion to liquidate a well-functioning business "Kraków Business Park LLC"
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Case IX GC 64/12
JUDGMENTIN THE NAME OF REPUBLIC OF POLAND
November 22, 2012
District Court in Krakow, IX Commercial Division composed of:
Chairman:Cłerk:
District Court Judge Grzegorz MazurSenior court recorder Małgorzata Wegrzyn
after hearing on November 22,2012 in Krakowproceedingin a case brought by Jan Domanus, Andrew Kozłowski and Izabeła Kozłowskiagainst KRAKOW BUSINESS PARK Ltd.in Zabierzowwith incidentał intervening of Adam Swiech
for dissołution of company
l. petition is denied;II. orders the Płaintiffs Jan Domanus, Andrew Kozłowski and Izabeła Kozłowski to
jointły pay to the Defendant KRAKOW BUSINESS PARK Ltd. in Zabierzow thesum ofPLN 58,737.00 (fifty eight thousand seven hundred thirty seven) asrepayment of the court costs;
III. orders the Płaintiffs Jan Domanus, Andrew Kozłowski and Izabeła Kozłowski tojointły pay to Adam Swiech the sum of PLN 6,797.00 (six thousand sevenhundred ninety seven PLN) as repayment ofthe court costs.
SealoJDistrict Courtin Krakow
Case IX GC 64/12
[Stamp): appropriate signatures a.ffixed on the originalCertified true copyMalgorzata Wegrzyn, Senior Clerk
JUSTIFICATION.Of the judgment dated November 22, 2012
Plaintiffs Andrew Kozlowski, Izabela Kozlowski and Jan Oomanus petition this Court for
dissolution of a limited liability company known as Krakow Business Park Ltd. located in
Zabierzow. Besides the Plaintiffs the above mentioned company has an additional shareholder
Adam Swiech who owns majority stake. As a basis for dissolution ofthe Company it was pointed
out: actions of the majority shareholder, who committed numerous crimes against minority
shareholders and the Company; questions as to real number of shares held by the individual
shareholders, with exemption of Izabela Kozlowski; discrimination of minority shareholders by
Adam Swiech through, among others, making access to documentation of the Company
impossible; lack of reaction from Adam Swiech to the questions raised in relation to payments
made by subsidiary company for services performed by non-existing American company; taking
possession of shares of Jan Oomanus by Adam Swiech and exercising voting rights contrary to
previous assurances; not reporting Jan Oomanus in the Book of Shares and not reporting him and
Izabela Kozlowski in Registrar Court; not maintaining the Book of Shares; issue of alleged loan
to Jan Oomanus which in fact was a dividend; appropriation by Adam Swiech the funds
belonging to John Oodmanus; organizing an Extraordinary Meeting of Shareholders with the use
of remote communication means; existence in a Company so called "Silent Shareholders";
creation of a structure of organization with a goal of aggrieving minority shareholders; payments
made to Cypru s Company despite the fact that the Company did not perform any consulting
services; lack of dividends; falsification of minutes of the Shareholders Meeting and attendance
list dated March 26, 2008. The aforementioned circumstances prove that there is an open and
sharp conflict between the shareholders, which makes the Company's operations impossible.
In response to the petition the Defendant Company Krakow Business Park Ltd. asked
the Court to dismiss the claim as unjustified. In the justification it was stated that the Defendant
created one of the largest office complexes in the Małopolskie Province, what was the
Company's main goal, accepted by ali the shareholders. The aforementioned undertaking
couldn 't be successfully achieved without mutual cooperation of all shareholders. Lack of
payment of dividend was, among other, a result of the resolution adopted in this respect in
connection with the loan taken by KBP-l Ltd. The Company's Board of Oirectors has never
limited access of the Plaintiffs to the Company's documents. Furthermore, the Plaintiffs have
never exercised the right provided for in Article 212 point 4 Code of Commercial Companies.
Plaintiff Andrew Kozlowski was one of major authors of KBP's development strategy and alI
other shareholders actively participated in this project. There is no court case in the matter of
determining a real number ofshares held by Andrew Kozlowski and Jan Domanus. New Board of
Directors undertook actions necessary for recreation of the Book of Shares, sending necessary
letters to the shareholders. Lack of registration of Izabela Kozlowski and Jan Domanus in Court
Registrar as the shareholders is compliant with the law regulations. Circumstance of Adam
On September 13, 2008 District Attorney for Krakow decided to charge Adam Swiech
with four charges concerning criminal offences committed in organized crime group to the
detriment of Andrew Kozlowski, Izabela Kozlowski, Jan Domanus and the Company Krakow
Business Park Ltd., as well as the State Treasury.
Proof: Decision to charge pages 164-167
With the decision dated September 15, 2008 case number XIV Kp 915/08/ Regional
Court for Krakow Śródmieście in Krakow, XIV Criminal Department applied to Adam Swiech a
preventive measure in the form of pre-trial detention.
Proof: a decision
With a decision dated October 23, 2008 District Attorney in Krakow secured on the
shares held by Adam Swiech in Krakow Business Park Ltd. a pen alty of a fine and penalty
punitive measures in the form ofthe forfeiture or obligation of compensation for damages.
Proof: decision
Andrew Kozlowski and Jan Domanus filed petitions dated October 23, 2008 about
establishing alegal evidence ofbeing a shareholder in Krakow Business Park Ltd.
]
Proof: petitians
On November 18, 2008 Extraordinary Meeting of Shareholders of Krakaw Business Park
was held, on which alI of shareholders where present, except for Izabela Kozlowski. Resolution
on changing agenda ofthe meeting was approved unanimously.
Proof: minutes pages 897-900
On November 18, 2008 President of the Board of Krakaw Business Park Ltd. submitted
documents concerning loan agreements to the attorney of minority shareholders.
Proof: letter page 906
On May 7, 2009 Extraordinary Meeting of Shareholders of Krakaw Business Park Ltd.
was held on which alI of the shareholders where present, except for Izabela Kozlowski. It was
decided that that meeting was incorrectly convened.
Proof: minutes pages 1285-1288
On May 22, 2009 Extraordinary Meeting of Shareholders of Krakaw Business Park Ltd.
was held, on which alI of the shareholders where present with exception of Izabela Kozlowski
and Andrew Kozlowski. The following resolutions were voted and approved: on dismissing Jan
Blajer from a position of President of the Board of Directors, on electing new President of the
Board, on changing remuneration of the President of the Board, on electing an attorney to sign
contracts with members ofthe Board.
Proof: protocol pages 1300-1304
By the verdict dated March 9, 2010 District Court in Krakaw, Department IX
Commercial case num ber IX GC 177/09 dismissed a petition of Izabela Kozlowski to establish
ownership of 1,028 shares in Krakaw Business Park Ltd. and obligation to publish those shares in
the Book of Shares.
Proof: capy ofthe verdict
By the decision dated November 22, 2010 District Attorney in Krakaw changed and
supplemented previous charges against Adam Swiech and presented him with tata I of 25 charges
ofcriminal offences shown in the Criminal Code and Criminal Treasury Code.
Proof: decision on changing and supplementing decision about charges
By the decision dated February 22, 2011 District Attorney In Krakaw changed and
supplemented previous charge s against Adam Swiech and presented him with additional 26-th
charge.
Proof: decision changing and supplementing decision about charges
By the decision dated March 29,2011 District Court for Krakaw Sródmieście in Krakaw,
Department XI Commercial ofthe National Court Register, empowered Adam Swiech to convene
Extraordinary Meeting of Shareholders of Krakow Business Park Ltd. in the subject, among
other, of adopting a resolutions on acknowledgement of fulfillment of the Board's duties, on
dismissing existing members ofthe Board and electing new members ofthe Board.
Proof: decision
On April 28, 20 l I Extraordinary Meeting of Shareholders of Krakow Business Park Ltd.
was held, on which all of the shareholders where present with exception of Izabela Kozlowski
and Andrew Kozlowski. The following resolutions where voted and approved: on
acknowledgement of fulfillment their duties by the members of the Board and President of the
Board, on dismissing existing members ofthe Board President ofthe Board, and on electing new
Board members and new President ofthe Board in person of Alicja Gostek-Swiech. The attorney
of Jan Oomanus voted against all above resolutions and objected to them.
Proof: protocol pages 1971-1979
On April 16,2012 Extraordinary Meeting ofShareholders ofKrakow Business Park Ltd.
was held, on which all ofthe shareholders where present.
Proof: minutes pages 2563-2566
On April 26, 20] 2 Extraordinary Meeting of Shareholders of Krakow Business Park Ltd.
was held, on which alI ofthe shareholders where present.
Proof: minutes pages 2726-2727
On May 2, 2012 Extraordinary Meeting of Shareholders of Krakow Business Park Ltd.
was held, on which alI of the shareholders where present. During the meeting the resolution,
among other, on increase of the Company's capital was adopted. The attorneys of Jan Oomanus,
Andrew Kozlowski and Izabela Kozlowski voted against that resolution and raised objection to
this resolution, without j ustification.
Proof: minutes pages 2567-2574
National Court Register file kept for Krakow Business Park Ltd. shows as the
shareholders: Adam Swiech holding 16,393 shares worth PLN 500.00 each and Andrew
Kozlowski having 4,346 shares worth PLN 500.00 each. In addition, the shareholders are: Izabela
Kozlowski holding 257 shares worth PLN 500.00 each and Jan Oomanus holding 1,145 shares
worth PLN 500.00 each. Proof: copy ofthe National Court Register Record
In relation to the companies from the Capital Group created by the Defendant Company
there was a num ber of investigations concluded by Directors of Office of Fiscal Control and
Treasury Chamber in Krakow in the subject of imposing additional tax amounts. Defendant
Company admitted existence of this circumstance, provided that that in the course of the
proceedings carried out by the tax authorities a presurnption of guilt was applied, therefore, they
do not constitute a basis for putting in allegations against the Defendant Company in the
proceedings. The decision documented by the Plaintiffs with copies concern various entities, not
only the Defendant Company (in file binder XI and XII).
The aforementioned actual state of affairs was determined by the Court based on the
documents included in the case file, with regard to which the court found no grounds to question
their credibility. At same time in the Court's mind they are sufficient for fuli reconstruction ofthe
Company's activities. It should be pointed out, that Plaintiffs did not provide accurate data
concerning existence of the Defendant Company and activities undertaken by it, and oniy
emphasized an existing conflict between the shareholders. The Plaintiffs themselves pointed out
that all information is included in the case file and they referred to it.
At the request of the Plaintiffs filed before closing the case, the Court allowed and
conducted (within the scope requested by the Plaintiffs) proof from opinion of court experts
called on by the Oistrict Attorney in a course of the proceeding VI Ds. 49108/Sp. The Defendant
did not challenge existence of financial operations shown there, however it challenged alegal
assessment of such operations, and furthermore pointed out that that the criminal investigation
has not led to indictment until that time. In particular the Court examined conclusions ofthe court
experts. It should be pointed out; that opinion issued by expert Magdalena Kupiec dated February
4, 2011 (page 3020) includes analysis of capital flows on the basis of documentation made
available to her in a course of criminal investigation. Court expert did not formulate definitive
conclusions. The expert in fact analyzed accounting records, picturing the financial tlows and
showing which documents are missing to present a full picture of the flows. In her concluding
remarks the expert indicates where one should look for further financial documents.
The Plaintiffs referred also to the opinion of expert of the certified auditors Lech Stanczyk, and
Beata Cala dated July 31,2010 (page 3158) issued in the course ofthe criminal proceedings VI
Ds. 49/08 Sp. Plaintiffs drew attention to the conclusions of the experts. The experts stated, that
transactions selected by them (page 3418) raise their doubts as to the reality of the services
performed. On the following pages (page 3421) the experts expressed their opinion that money
transferred out by Adam Swiech in the form of loans came from fictitious transactions that took
place in the companies belonging to the KBP Capital Group.
Plaintiffs allege that this is the evidence of the "transfer-out" of financial resources from the
Defendant Company to the benefit of Adam Swiech. In the opinion of the Court a significant
difficulty in interpreting the opinion of experts formulated in such way, results only from the use
of the term "fictitious". Experts' opinion does not allow for determining what defects of the
statements of will should be assigned to the individual transactions. The opinion is a material
associated with other evidence compiled in criminal proceedings, evidence not known to this
Court. Civil Court is unable to eonduet a separate qualification of these transactions on the basis
of presented opinions. What is important, considerable financial flows relate to relationships of
the Defendant Company with its "subsidiaries", what does not seem to violate rights of the
Defendant Company as a shareholder in "subsidiaries". What is even more important, model of
Capital Group was created during the harmonious existence of the Defendant Company, what is
clearly indicated by the documents from pre-filing period. It should be noted that the transactions
before the spring of2008 took place with the fuli possibilities of control by the Plaintiffs, and the
resolutions indicate their acceptance in the unanimous vote. In a later period, at the request ofthe
Plaintiffs, the Defendant Company is being extensively controlled by tax authorities and District
Attomey's Office. These controls reveal a num ber oftransgressions, but this does not change the
assessment of the evidence, indicating that the Plaintiffs actively participated in undertaking and
accepting activities ofthe Company.
The Court considered evidence from testimonies of Plaintiffs (page 2741) from the
Defendant (page 3011 b) and incidental intervening party (pages 2747 and 3009b). Testimonies
ofthe Plaintiffs do not eonfirm the claims included in the petition concerning gradual build-up of
conflict among the shareholders, which led to the filing of this action in 2008. In light of the
above cited documents the shareholders harmoniously co-created the company, which was
already pointed out by the Court of Appeal when considering appeal to the previous judgment in
the case. Violent eruption ofconflict occurred only in the spring of2008. The culmination ofthe
Plaintiffs' actions was the decision for the temporary detention of Adam Swiech.
The court tried to find an answer to the question why such violent conflict erupted among
partners in mid-2008 in the shareholders' testimonies. Testimonies are fuli of subjective
comments about who is responsible for a conflict of shareholders. In the opinion of the Court,
shareholders do not report what financial issues evoke in the Plaintiffs feeling that they have
invested more than the incidentaI intervening party wants to repay them nowo This confirms
believes of the Court that the presented grounds for the c1aims included in the petition do not
correspond to the real relations among partners, which led to violent conflict and bringing an
action for dissolution ofthe Company.
The Plaintiffs pointed out that at the tum of 2007 and 2008 they decided to cash in their
shares, but shareholders have failed to agree on a price. They pointed out that later on, due to lack
of agreement by incidental intervener to pay claims submitted by them, they wanted to sell the
company, but intervener objected to such sale. Then they obtained c1ues pointing to financiaI
irregularities in the Company and informed District Attomey. Their allegations are confirmed in
the criminal proceedings. Plaintiffs feel "trapped" in the Company not being able to sell their
minority shares at their real value.
Intervener explained that after a period of harmonious development and cooperation, in
2008 the Plaintiffs wanted to sell the Com pany, which he refused. Then the Plaintiffs took actions
to take away from him the Company, where he was a majority shareholder, in fact actions leading
to destruction of the Company as a business entity. Despite these activities the Company
continues its development.
Chairman of the Board of the Defendant Company declared fulI co-operation with the
Plaintiffs as to interests ofthe Company.
Ultimately, the Court found that, despite the conflict of the shareholders, it does not
affect directly operations of the Company, which continues to develop the model of a capital
group, co-created by the shareholders a long time before 2008.
District Court found the followiog:
Finally, the Plaintiffs pointed out that the claim included in the petition was justified by
permanent and unavoidable conflict among the shareholders. Plaintiffs feel trapped in the
Defendant Company, which was appropriated by the incidental intervener. This situation causes
that the objective ofthe Company carmot be achieved. The factual basis ofthe claim was indicted
by the Plaintiffs in the petition in 2008, and the Court is bound by it. The fact of escalating
conflict of shareholders in the course of these proceedings, it is an inevitable consequence of the
Plaintiffs decision from 2008 to initiate criminal and present proceedings. As a result of the
Plaintiffs' action the Defendant Company is fully transparent. Intensive controls by tax
authorities and law enforcement agencies are undertaken. The Defendant Company maintains
liquidity; since - as indicated by the Defendant - the banks did not halt financing of extensive
investment (fact known to the Court on its own initiative). The Plaintiffs carry out current
controls by prosecuting resolutions to Court.
Conflicts among shareholders in companies are a natural phenomenon. Shareholders,
including minority shareholders, benefit from the protection provided for in the regulations ofthe
Code of Commercial Companies. The right to request dissolution of a company is a most far-
reaching right. Enforcement of this right is therefore the last resort. In the opinion of the Court,
the evidence gathered in course of the case, failed to show that the circumstances specified in
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Article 271 ofthe Code ofCommercial Companies occurred for dissolution ofKrakow Business
Park Ltd..
Pursuant to Article 271 of the Code of Commercial Companies, except in the cases
referred to in Article 21, the court may declare dissolutions of the company when demanded by
shareholder or member of the company's governing body, if attaining the company's objective
becomes impossible or, if another important reason exists caused by the Company's relationships.
Court decisions consistently state that a failure to achieve the objective of the company may be
caused by the conf1ict that exists between its shareholders, as a result of frictions between two
fractions of shareholders with a balanced number of votes, when is not possible to pass
resolutions, which hinders the proper operations of a company (see Decision of the Supreme
Court dated April 10, 2008 TV CSK 20/08). An objective of each commercial company, both
personal as well as capital, similarly to every corporation, i.e. association of people, is pursuit to
achieve a common objective (Article 3 Code ofCommercial Companies). It does not only refer to
business objectives, but also social ones, and the basie feature of every company is an idea of a
co-operation among partners (shareholders). Shareholders of a limited liability company should
pursuit to achieve a com mon objective during the entire period of its existence. When reaching
company's objectives becomes impossible, the Act indicates, as fundamental, lian important
cause" for dissolving a company by the court (Article 271 paragraph I of the Code of
Commercial Companies). The impossibility of achieving the objective should be permanent and
continuous. It is assumed that the impossibility ofachieving a limited liability company's purpose
must be objective, which means that such company is not able to reach an agreed objective,
despite making legal and organizational efforts. Other important causes include: lack ofability to
make a decision in the company (decision-making "lock"), lack of governing bodies and inability
to appoint them, permanent use of majority shareholder's position, lack of interest in the
company's affairs by its shareholders, permanent conf1icts between board members, depriving a
shareholder of its rights by other shareholders, a breach of Article 20 of the Code of Commercial
Companies.
In the literature, there are also opinions, that dissolution of a company, which has the
ability to operate in the market, should be the final solution. A mere violation of some minority
shareholder's (shareholders') rights, even ofa notorious character, is not a sufficient circumstance
for a court to issue ajudgment on dissolution ofa company. Violations ofthese rights should lead
to further negative consequences in the functioning of the company, for example majority
shareholders when adopting resolutions violate good manners and hurt minority shareholder, who
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then effectively brings an action against such resolution (see Dominika Wajda, Glossary to the
Court of Appeal judgment ofNovember 9, 2006 and Aca 575/2006, Glossary 2008.2.53).
With regard to the allegation of non-disclosure in the National Court Register of the
shareholders Jan Domanus and Izabela Kozlowski, it should be noted that, pursuant to Article 36
paragraph 8 letter C ofthe National Court Register Act dated August 20, 1997, only shareholders,
who own at least 10% ofthe shares should be recorded in the register. Therefore, ifthe shares of
Jan Domanus and Izabela Kozlowski did not cross the aforementioned threshold, they should not
be recorded in the register. The fact of not recording them doesn't cause that Jan Domanus and
Izabela Kozlowski are not shareholders in the Company and do not have any rights. Despite the
fact that they where not recorded in the register, they may exercise their rights arising from
ownership of shares in Krakow Business Park Ltd. In addition, it should be noted that both Jan
Domanus and Izabela Kozlowski were present at the Meetings of Shareholders, as shown by the
attendance lists and exercised their rights to vote on them. Thus, their position as shareholders
was never in danger, since they exercised the powers available to shareholders. It is significant
that until 2008, none of the partners raised any doubts about the amount of their shares; and also
that the resolutions were passed easily and have not been objected by anyone either in the formaI
or substantive context. General Meetings of Shareholders were held on a regular basis and there
were no problems with adopting resolutions. For a period of II years there were no disputes
between the shareholders as to their shares in the Company, which would find its final in court
proceedings. The Plaintiffs did not prove that the lack of the Book of Shares, or any irregularity
in keeping it, had any impact on functioning of the Company. In the opinion of the Court in the
light of the minutes of shareholders meetings, it should be considered that any deficiencies in
administration of the Book of Shares did not constitute an obstacle to efficient development of
Krakow Business Park Ltd.
It should also be noted that from the documents contained in the pages 72 and following
it arises that Adam Swiech, as the President of Krakow Business Park Ltd., filed on September
17, 2004, with the Court Registrar a current list of shareholders, which included Andrew
Kozlowski, Izabela Kozlowski, Adam Swiech and Jan Domanus. The aforementioned list of
shareholders was included by order of the Court to the Registrar files of the Company on
September 21, 2004.
It should also be noted that Jan Domanus was present at the meetings of shareholders and
took an active part in them, by voting. He did not question at that time the amount of his shares.
Thus, the current dispute between him and Adam Swiech about the fact of holding shares, in itself
can't constitute the ground for dissolution ofthe Company.
In the light of the gathered documents it cannot be admitted that the Plaintiffs were
discriminated by Adam Swiech as minority shareholders, and aJso that they had no influence on
the decisions made and directions ofthe Company's development. In the opinion ofthe Court the
Plaintiffs knew the financial and legaJ situation of Krakow Business Park Ltd. and actively
participated in its operations. The minutes from shareholders' meetings, which were held until
2008, and attendance Jists, show that al! shareholders were present at them, and that the resolution
where adopted unanimously. Minority shareholders did not raise any objections to the adopted
resolutions and did not challenge them in Court. The fact that since 2008 the Plaintiffs do not
agree with adopted resolutions and challenge them in Court, which some ofthem considered to be
invalid due to the violation of the rights of minority shareholders, carmot lead to a simple
presumption that during the entire period of existence of the Company the Plaintiffs were
discriminated, and their rights violated.
The Plaintiffs' attorney's claims that adopting resolutions and then challenging them in
court demonstrates a permanent status ofthe conflict cannot be considered as true. In the opinion
of the Court concordant adoption of resolutions over a period of 11 years in fact indicates that
there was no conflict between the shareholders at alI. In addition, gathered evidence indicates that
by mid-2008 no resolution was ever challenged in court by any ofthe shareholders. It should also
be noted that the Plaintiffs themselves admitted that the conflict between the partners existed
since mid-2008. Thus, it carmot be regarded as a permanent, growing over the years, since until
2008 actions where taken unanimously. It should also be noted that, if the circumstances
presented in this case would be found to be true, it would not be possible for the Company to
operate, and certainly not for a period of II years. In particular, it would be impossible to create
new organizational structures and generating profits by the Defendant Company. Shareholders
acting rationally in this situation should immediately take actions to "cure" the situation in the
Company, and not to wait passively for II years.
As a side remark it should be noted that the court proceedings initiated by the minority
shareholders since the second half of 2008 concerning the resolutions, in most cases ended with
dismissal of the actions. Thus, it should be considered that they were in line with the law
reguJations and do not infringe the shareholders' rights.
Plaintiffs repeatedly claimed that the majority shareholder's activity was based on a
number of irregularities in functioning of Krakow Business Park Ltd. and its subsidiaries, and by
numerous fictitious transactions. Nevertheless, in the opinion of the Court evidence gathered in
the case did not demonstrate that the actions of Adam Swiech were aimed against the minority
shareholders. It should also be noted that the documents col!ected in the case, the minutes from
Shareholders Meetings in particular, indicate that the Plaintiffs knew the real situation of the
Company, and also its undertakings or agreements concluded with the subsidiary-companies. It
should be noted that until 2008 the Plaintiffs also did not question the organizational structure of
the Defendant Company and creation of so called "Subsidiaries". In addition, the Plaintiff
Andrew Kozlowski, during questioning at the hearing admitted that all shareholders ordered from
an independent tax firm issuing opinions concerning financial and legal concepts of Krakow
Business Park Ltd. operations. Therefore, the doubt as to the validity or legality ofthe structure of
Krakow Business Park Ltd. should be considered as occurring suddenly, based on the subjective
grounds, not supported by any evidence. Until mid-2008, the cooperation between all
shareholders developed concordantly, without any conflicts. Thus, Plaintiffs' claims that for the
entire period of 11 years since the incorporation of the Company, they did not know about the
activities of Adam Swiech and did not have the opportunity to take appropriate actions, are hard
to believe. It should be underlined that until mid-2008 alI the shareholders were present at
Shareholder Meetings, in concordantly adopted resolutions, which then were not challenged in
Court. Thus, currently raised claims of numerous irregularities to the detriment of the Plaintiffs
find no support in the presented documentation, illustrating the operations of Krakow Business
Park Ltd. over 11 years.
The irregularities found in the course of the control procedures result, if applicable, in
responsibility of Krakow Business Park Ltd. to the State Treasury, and not against the minority
shareholders. The gathered evidence showed that the Plaintiffs knew the ways of functioning of
the Defendant Company, as well as the actions taken by it. Thus, if the Plaintiffs participated in
the meetings of the shareholders, voted on them, inter alia, on the approval of the financial
statements and the reports of the Board, they cannot now claim, that they were not aware of the
activities carried out by the Company. Therefore the irregularities found, whether in criminal or
other proceedings in the course of other inspections, in the structure of organization cannot be the
basis for the dissolution ofthe company.
One of the grounds authorizing the Court to dissolve the company under the Code of
Commercial Companies is inability to make any resolutions, which results in the inability to
manage the affairs of the company. In this case, the Company functioned well and, what should
be underlined, continues its operations. Although this fact is not disputed, the testimony of the
Defendant Company CEO (page 3011), which leaves no doubt about the condition of the
Company, should be indicated. The above indicates that there are no grounds for dissolution of
the Company.
The accusation that throughout the existence of the Company alI the time Adam Swiech
sought to "dilute" the shares of the minority shareholders through a share capital increase, should
also be considered as irrelevant. It should be noted that since the incorporation of the Company,
the resolutions on the capital increase were adopted unanimously. The aforementioned resolutions
where not accompanied by any objections raised by the minority shareholders. Therefore, the
present claims ofthe Plaintiffs that the increase ofthe share capital is intended to their detriment
have not been proved.
The allegation of existence of so-called "quiet shareholders", who among others was
supposed to be Ryszard Swiech, who acted on behalf ofthe Company without any authorization,
is groundless. It should be noted that, according to a copy of entries in the National Court
Register, Ryszard Swiech served as Company's commercial proxy, so he could make decisions
on its behalf and to represent it.
According to the adopted resolutions the losses initially incurred by the Company were to
be covered by the profits generated in subsequent years, and the subsequent resolutions referred
to it. So one cannot make accusations that no dividend was paid to the shareholders, when the
Company initially generated losses, which in subsequent years where to be paid out of profits. It
should be pointed out that all the members unanimously approved the financial statements for the
preceding years and adopted appropriate resolutions, under which income generated in particular
year was to be allocated to cover the losses generated earlier. So there was no ground to pay
dividends. It should also be noted that all shareholders, including the Plaintiffs, made obligations
to the credit institutions not to adopt resolutions on the payment of dividends. This is intended to
secure loans granted to subsidiary companies. Therefore the Plaintiffs now cannot accuse the
Company ofunlawful depriving them oftheir dividends.
In the opinion ofthe Court the matter of Jan Domanus' dividend, if any, which according
to the Company was a loan, is also not a reason for dissolution,. It should be noted that the parties
have not submitted any document confirming the transfer of money. Thus, the Court was unable
to evaluate on its own the true nature of the transfer of these funds. Nevertheless, from the
resolutions adopted by all the shareholders, as well as from other documents it arises that the
Company was holding up payment of dividends. Because it initially generated losses, which in
the later years were covered by the profits generated by the Company. In addition the
shareholders agreed not to take resolutions on payment of dividends in connection with securities
for the loans granted to "subsidiary companies". So in the light of the circumstances described
above, it should have been assumed that the money given to Jan Domanus was not a dividend.
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Moreover, in the Court's opinion, even if one assumes that Jan Domanus received a
dividend, this would not constitute the basis for dissolving the Company. This issue should be
resolved between the shareholders, and not in the proceedings against the Company. It should be
noted that the accusation ofpaying the dividend was raised by one ofthe Plaintiffs A. Kozlowski,
acting in the proceedingjointly with the beneficiary ofthe payment J. Domanus, together turning
it in to as an accusation against the Company.
In the Court's opinion, also the allegation that the Plaintiffs cannot exercise their rights as
shareholders, including being left without access to documents of the Company, turned out to be
irrelevant. As it is elear from the letters included on the pages from 247 to 279, representative of
the minority shareholders had an opportunity to examine the Company's documents after he
delivered original powers ofattorney. The Parties had a problem with finding an appropriate time
to meet and examine the documents, but it cannot be considered as avoided by the Defendant
Company's default. In addition, the Defendant Company provided possibility of making the
company's documents available only to the shareholders acting personally, and not by their
attorney. It also did not consent for copying the documents. This cannot be regarded as a sign of
bad will on the part of the Company. Specified decisions should be considered as rational and
taken in the interest of the Company itself. In addition, the attorney of the Plaintiffs fai led to
appear at the date and time indicated for access to the Company's documents. It should also be
noted that the PlaintiffIzabela Kozlowski, during questioning at the hearing in course ofthe court
suit, said that the Company had made the documentation available to her and she was able to
inspect it.
In the opinion of the Court the fact that at present a criminal investigation against Adam
Swiech is in progres s in respect to criminal offences committed with the use of organizational
structure of Krakow Business Park Ltd., does not constitute grounds for the dissolution of the
Company. The above is not an evidence for stating that the majority shareholder acted without
knowledge and to the detriment of the minority shareholders. Only a final and binding judgment
convicting him would eonfirm the guilt of Adam Swiech. Prior anticipation of the final outcome
of the criminal proceedings against a majority shareholder would violate constitutional
guarantees. One cannot make a presumption that, if criminal proceedings are conducted against
the majority shareholder, then the actions taken by him were to the detriment of Plaintiffs. The
more so because, in the opinion ofthe Court, alI the members concordantly worked together until
2008, adopting unanimous resolutions and approving the financial statements and the work ofthe
Board.
The fact that the District Attorney in Krakow established security interest on the shares of
Adam Swiech in Krakow Business Park Ltd. is irrelevant to the Company's operations. Adam
Swiech in fact may exercise, directly or through an attorney, the powers in respect of the shares
hel d, including the right to vote. This is demonstrated, inter alia, by the fact that the majority
shareholder was authorized by the District Court to convey Extraordinary Meeting of
Shareholders.
The Plaintiffs did not prove that Adam Swiech falsified the minutes of the shareholders'
meeting held in March 2008 and the attendance list. References made in the course of this hearing
by the Plaintiffs to the expert's opinion drawn up in the preparatory proceedings is not sufficient
for a positive resolution ofthe aforementioned issue in this proceeding.
It should also be noted that is incurring legal costs is a naturaI consequence of
participating in litigation. These costs are higher if the proceedings are taking place abroad. So
allegations should not be made against the Defendant Company, that it pays to USA attorneys,
who represent it before a court in the United States.
The fact that there is a conflict between the partners is undisputed. However, in the
opinion of the Court the conflict is present from mid-2008, and despite it Krakow Business Park
Ltd. is still operating. It is worth pointing out that in course ofthis proceeding the Plaintiffs filed
a motion - withdrawal of the action. It is true that the Plaintiffs withdrew that motion, but the
Plaintiffs were not able to explain to the Court the circumstances, in which they made such
important decisions. In the opinion of the Court this is yet another indication that the Plaintiffs
continuing the case put pressure on the incidental intervener in order to obtain a more favorable
price for their shares. When trying to persuade the parties to reach a settlement the Court received
information that the dispute boils down to the value, which the Plaintiffs would like to receive as
a settlement oftheir contributions, and the incidental intervener would not accept this value.
For the aforementioned reasons, the Court found no basis for dissolution ofthe Company.
The costs ofthe proceedings where decided pursuant to Article 98 ofthe Civil Code, according to
the principle of responsibility for the outcome of the process. Amount of granted expenses
includes the Defendant's attorney's fee and the incidental intervener separately, at the minimum
rates provided for in the Regulation of the Minister of Justice for the reimbursement of incurred
costs and expenses. The items that make up the granted expenses are calculated in the same way
as in the justification to the decision to discontinue, page 2090 binder X
SealoJDistrict Courtin Krakow
[StampJ: appropriate signatures ajjixed on the originalCertified true copyMalgorzata Wegrzyn, Senior Clerk
I, Jacek Stępak, registered on the Minister of Justice's List of Certified Translatorsunder the number TP/2969/05, hereby certify that I verified submitted translationinto English and I found its content to be compliant with the content of the documentwritten in Polish. The document consists of 56,287 characters, which constitutes 50pages of certified translation (§ 8; Minister of Justice's Regulation of 24 January2005).
Krakow, 15 March 2013. Number in the Repertory: 117/2013.