(Corporate) Litigation | Cases

Bas de Jong: “Follow the money”


“In this particular case, I represented the Veenendaal council, that provided surety for a foundation that ran an old people's flat. In 2000, it took out a loan with a bank, for  refinancing. The foundation received the loan of several million after the council had provided security with regard to the bank. Initially, the money was placed on deposit, pending the repayment of a different loan. When the foundation came in touch with a couple of mala fide advisors, everything went wrong and that cost the foundation and the council that provided the guarantee dearly. On the advice of the advisors, the board members blindly signed all sorts of documents. The foundation's millions of guilders were first used to buy dollars, which were placed on deposit. In all, it concerned an amount of 9.4 million US Dollars. This amount was “invested” in a transaction with a party in America, that presented itself as an investment company and conjured up visions of very attractive returns. However, on the day the other loan had to be repaid with the newly borrowed money, the money was not there. The bank whose loan had to be repaid in October 2002, as well as the bank that had provided the new loan, called upon the council's surety now that the borrowed money had disappeared in the direction of America.

When the council realised that it appeared to have been set back many millions, it conducted an investigation. In that context, the Court questioned many witnesses. The investigation was very extensive and even crossed national borders. Based on the investigation, the council summoned various parties to appear, among which the bank that had provided the bank guarantee, the foundation's board members and the so-called advisors.

In 2007, I was able to score the first success for the council. After four years of litigation, the bank that had provided the bank guarantee was ordered to pay the money, for which the council initially would have to foot the bill, to the council. The Court considered that the bank guarantee was null and void, because the persons who had ordered the bank guarantee to be provided on behalf of the foundation, were unauthorized. Subsequently, the board members, who were hiding behind each other and were pointing at the advisors and the bank, were sentenced to repay the remainder of the claim to the council. One of the advisors was also sentenced to pay damages. At present, this case is still on appeal before the Supreme Court. Separate civil proceedings have been instituted before the Hague District Court against the other advisor, who has been declared bankrupt. This case has become a success, mainly because we have sunk our teeth in the money flows, cross-border as well. This investigation demanded days and evenings of puzzling over details, but did yield what we were looking for.”