A Managing Director of a French Société Anonyme has a statutory duty of loyalty towards the shareholders of such company. This principle was set in stone by a ruling of the French Supreme Court (Cour de cassation) in 1996. It has further been ruled that under this duty, a Managing Director ("MD") must inform the board of directors and shareholders of any ongoing negotiations in relation to a proposed transaction affecting the shareholding of a company, even in the situation where such a company is in distress. Non-compliance with this duty may lead to the termination of a MD's appointment and exclusion of his right to contractual compensation
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