A war that lasted more than nine years. Six opposing heirs and lots of money at stake. It could be the subject of the Dragon House, and sometimes reality is stranger than fiction. The rosary of judicial confrontations between the Álvarez brothers, sons of Eulen’s founder David Álvarez, seems to have no end. The sale of some shares between the two family companies (Eulen and El Enebro) in 2013 is at the center of the latest legal battle between Eulen’s current president, María José Álvarez, and Marta, Elvira, Juan Carlos, Emilio and Pablo Álvarez Mezquiriz. It controls the El Enebro company, the largest shareholder of Vega Sicilia wineries.
Last April, the Madrid Provincial Court settled with the head of Eulen, who claimed that he had canceled the sale of his brothers’ shares. Specifically, 152,000 titles, from Eulen to El Enebro, which he sees as “emptying” the family legacy. His siblings are now appealing this judgment in the Supreme Court, and family conflict continues after nine years in court.
Pandora’s box was opened in 2010, worsening Álvarez’s business relationship. After their third marriage in 2009, Eulen’s founder gave his children control of El Enebro, the inheritance company set up to group the family’s assets. the return was to control 51% of the capital. Her seven children managed the other 49%, 7% each. However, things did not go as David Álvarez expected. Despite being 82 years old, she wanted to return to work. However, five of his children (Marta, Elvira, Juan Carlos, Emilio and Pablo Álvarez Mezquiriz) did not agree with this decision, and the patriarch was removed from the company along with his faithful grandchildren María José and Jesús David. This move was to be declared invalid by the Supreme Court in 2018.
second round
A second attack took place in 2013. At that time, David Álvarez owned 3.52% of El Enebro’s capital, and each of his seven children owned 13.38% of that company’s capital. In this way, they reached 93.68% of the shares to which the treasury shares were added. Juan Carlos Álvarez Mezquiriz assured at one of the company meetings that María José and her father were about to check out Eulen after they bought the participation of one of his other siblings, Jesús David Álvarez. In this way, after the death of María José Álvarez’s father in 2015, father and daughter concentrated up to 57.56% of the company’s shares.
Fearing to lose control of the parent family business, Marta, Elvira, Juan Carlos, Emilio and Pablo Álvarez Mezquiriz chose to sell their titles from Eulen to El Enebro to gain the majority from that company and challenge their father and sister. In this way, the rebels managed to control the family winery, Vega Sicilia. Eulen’s head appears in court after his brothers’ attempted ordeal. María José Álvarez initially handled the case through criminal channels. After his dismissal, he went to the Madrid Commercial Courts, which first denied the claim and then settled with him in a second case.
The arguments put forward by Eulen’s president to take the case to court were based on his brothers’ “disloyalty” to the company, “putting their private interests ahead of those of the company they run.” It sums up the sentence “The acquisition of shareholding packages of Eulen SA, which is owned by the directors of El Enebro SA, is not presented in the social interest of this company from the moment such a transaction is conceived”. cancels the transactions of five of the heirs. The sentence read, “The fact that El Enebro SA has no self-interest in the operation is further evidenced by the fact that the interest in conducting the operation in question is private and the directors themselves.”
The Madrid County Court notes that the five defendant brothers put their private interests before those of the company, both to carry out an operation that did not benefit Eulen (the sale of Eulen’s shares to El Enebro) and to cause harm to the company. the company incurs an unnecessary expense to the company that only “responds to his personal interests”. It also notes that the fixed price of 530 euros per share was determined “without evidence of sufficient support and evidence that it was higher than the actual price of the shares”.
Justice now requires a reversal of contracts, so El Enebro will have to return the shares to their former owners, Eulen, as well as dividends received during the years in which ownership of the shares was preserved. Currently, these shares are owned by Mezqual Ibérica, a company in which the five brothers continue their investments. After the appeal, the sentence has not yet been executed. The courts will once again be responsible for resolving disputes between the family clan, which remained unresolved seven years after the death of head of the family, David Álvarez.