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Protection of Minority Shareholders, Investors and Creditors in Corporate Groups: the Strengths and Weaknesses of German Corporate Group Law

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References

  1. Concerning terminology of the Marketable Share Company Law (Aktiengesetz) 1965, see Kropff, Textausgabe AktG 1965 (Düsseldorf 1965) p. 375.

  2. Concerning the reasoning of § 311 AktG, see Kropff, supra n. 1, at p. 408; developed in BGHZ 69, 334 at pp. 337 — VEBAIGelsenberg.

  3. Regarding private company group law, cf., Baumbach/Hueck/-Zöllner, GmbH-Gesetz, 17th ed. (Munich 2000) Final Addendum I; Emmerich and Sonnenschein, Konzernrecht, 6th ed. (Munich 1997) pp. 381 et seq.; Hachenburg/-Ulmer, Gesellschaften mit beschränkter Haftung, 8th ed. (Berlin/New York 1997) Annex § 77; Lutter and Hommelhoff, GmbH-Gesetz, 15th ed. (Cologne 2000) Annex § 13; Roth/-Altmeppen, GmbHG, 3rd ed. (Munich 1997) Annex § 13.

  4. Cf., the contributions by Röhricht, “Von Rechtswissenschaft und Rechtsprechung”, ZGR (1999) 445, on the one hand, and Ulmer, “Entwicklungen im Kapitalgesellschaftsrecht 1975 bis 1999”, ZGR (1999) 751, on the other.

  5. Cf., Krieger in: Hoffmann-Becking (ed.), Münchener Handbuch des Gesellschaftsrechts, Vol. 4: Aktiengesellschaft, 2nd ed. (Munich 1999) 1143.

  6. Cf., Martens, “Die rechtliche Behandlung von Options- und Wandlungsrechten anläßlich der Eingliederung der verpflichteten Gesellschaft”, AG (1992) 209 et seq.

  7. These agreements, which are dealt with separately under marketable share company law, are generally negotiated in practice in a single agreement called “Organschaftsvertrag”; cf., Emmerich and Sonnenschein, supra n. 3, at p. 131.

  8. First addressed by Geßler, in: Centrale für GmbH (ed.), Der GmbH-Konzern (Cologne 1976) 178.

  9. BGHZ 116, 37 at pp. 41 et seq.; Emmerich and Habersack, Aktienkonzernrecht (Munich 1998) § 302 AktG, marginal number 30.

  10. Cf., Kleindiek, Strukturvielfalt im Personengesellschafts-Konzern (Cologne 1992) p. 158; cf., also BGHZ 105, 168 at pp. 183 et seq. — HSW. 11 BGH, AG (2000) 129.

  11. Cf., e.g., Koppensteiner, Kölner Kommentar zum AktG, 2nd ed. (Cologne 1987) § 302, marginal number 8.

  12. Priester, “Liquiditätsausstattung der abhängigen Gesellschaft und unterjährige Verlustdeckung bei Unternehmensverträgen”, ZIP (1989) 1301 at pp. 1307 et seq.; Emmerich and Habersack, supra n. 9, at § 302 AktG, marginal number 41; in detail Kleindiek, supra n. 10, at pp. 162 et seq.

  13. Cf., Emmerich and Sonnenschein, supra n. 3, at pp. 274 et seq.

  14. Cf., Emmerich and Habersack, supra n. 9, § 304 AktG, marginal numbers 42 et seq.

  15. Cf., Emmerich and Habersack, supra n. 9, § 305 AktG, marginal number 15.

  16. For a detailed criticism with an exposition of the case law: Emmerich and Sonnenschein, supra n. 3, at pp. 308 et seq. with further references. 18 Cf., ibid., at pp. 155 et seq.

  17. E.g., the case Audi/NSU (Bundesgerichtshof, BGH) JZ (1976) 561 with comments by Lutter.

  18. Such as the worldwide restructuring of the BBC group, as it was then called. Cf., Lutter, in: Druey (ed.), Konzernrecht aus der Konzernwirklichkeit: Das St. Galler Konzernrechtsgespräch (Cologne 1988) discussion report, 139 at p. 142.

  19. This has already been pointed out by Hommelhoff, Die Konzernleitungspflicht (Cologne 1982/1988) p. 109.

  20. For an overview of listed subsidiaries in Germany see Pellens, “Börseneinführung von Tochterunternehmen — Aktienmarktreaktionen auf die Performance des Mutterunternehmens”, zfbF (Schmalenbach’s Zeitschrift für betriebswirtschaftliche Forchung) (1993) 852 at pp. 853 et seq.

  21. In more detail concerning the advantages see Pellens, ibid., at pp. 855 et seq.

  22. For a broad overview, cf., Emmerich and Sonnenschein, supra n. 3, at pp. 330 et seq.

  23. The central position of the subsidiary’s Management Board within the system of protection under §§ 311 et seq. AktG has already been pointed out by Hommelhoff, supra n. 21, at pp. 493 et seq.

  24. Supra n. 21.

  25. Concerning the function of the dependency report and its auditing, cf., the reasoning of the Government’s Draft (RegE) to § 312 AktG, in: Kropff, supra n. 1, at pp. 410 et seq.

  26. In practice, these rules are not implemented with sufficient precision and detail; cf., Wirtschaftsprüfer-Handbuch 1996, Vol. 1 (Düsseldorf 1996) pp. 506 et seq.

  27. All small marketable share corporations are not subject to compulsory auditing in terms of § 316 para. 1/267 para. 1 Commercial Code (HGB), provided that their shares or other securities are not listed on an official market (according to § 267 para. 3 s. 2 HGB).

  28. Concerning the reasoning given in the Government’s Draft (RegE) for § 312 AktG, see Kropff, supra n. 1, at p. 411: The dependency report must contain details of business transactions the disclosure of which might be detrimental to the company; see also Hommelhoff, in: Ständige Deputation des Deutschen Juristentages (ed.), Gutachten für den 59. Deutschen Juristentag, Gutachten G (Munich 1992) 16.

  29. Criticism in particular by the Business Law Commission (Unternehmensrechtskommission): Bundesministerium der Justiz (ed.), Bericht über die Verhandlungen der Unternehmensrechtskommission (Cologne 1980) marginal numbers 1387 et seq., and also by Lutter, “Das Konzernrecht der Bundesrepublik Deutschland: Ziel, Wirklichkeit und Bewährung”, in: Schweizerische Aktiengesellschaft (1976) 152 at p. 159; cf., also the sources mentioned by Emmerich and Habersack, supra n. 9, introduction to § 311 AktG, marginal number 8, footnote 19.

  30. Hommelhoff, “Praktische Erfahrungen mit dem Abhängigkeitsbericht”, ZHR (1992) 295.

  31. Cf., inter alia, Kropff, “Benachteiligungsverbot und Nachteilsausgleich im faktischen Konzern”, in: Festschrift W. Kastner (Vienna 1992) 279, at pp. 283 et seq.; Lutter, “100 Bände BGHZ: Konzernrecht”, ZHR (1987) 444 at p. 460; Rittner, “Gesellschaftsrecht und Unternehmenskonzentration — zu den Vorschlägen der Monopolkommission”, ZGR (1990) 203 at p. 218; Schmidt, “Abhängigkeit und faktischer Konzern als Aufgabe der Rechstpolitik”, JZ (1992) 856 at p. 859.

  32. Compare Hoffmann-Becking, “Sitzungsbericht R”, in: Ständige Deputation des Deutschen Juristentages (ed.), supra n. 30, 18, at p. 22.

  33. This retreat was incorporated in the decision of the German legislature not to reform comprehensively the law on private limited companies (GmbH-Recht), but merely make selective amendments and additions by the adoption of the GmbH-Novelle 1980 (BGBl. I p. 836). Cf., e.g., the overview of Lutter and Hommelhoff, supra n. 3, Einleitung, marginal number 7.

  34. Cf., e.g., Resolution (Entschließung), in: Ständige Deputation des Deutschen Juristentages (ed.), supra n. 30, at p. 691; cf., also Lutter, “Das Recht der faktischen Unternehmensverbindungen und die Beschlüsse des 59. Deutschen Juristentages”, DB (1992) 2429 at p. 2430.

  35. According to § 319 para. 1 s. 1 AktG only a marketable share corporation can be integrated.

  36. A company made dependent by a control contract is, from a tax law point of view, organizationally integrated; cf., Sonnenschein, Organschaft und Konzerngesellschaftsrecht (Baden-Baden 1976) p. 124.

  37. Cf., already Hommelhoff, supra n. 21, at pp. 245 et seq. as an addition to Schmidt, “Konzernrecht, Minderheitenschutz und GmbH-Innenrecht”, GmbHR (1979) 121 at pp. 122 et seq.

  38. More detail, inter alia, in Hachenburg and Ulmer, supra n. 3, Annex § 77 marginal numbers 133 et seq., 215 et seq.; Roth/-Altmeppen, supra n. 3, Annex § 13 marginal number 25.

  39. More detail in Hachenburg/-Barz, GmbHG, 7th ed. (Berlin/New York 1979) § 13 Annex II marginal number 31 with further references; see also OLG (Oberlandesgericht) Dülsseldorf, BB (1981) 1482, with the dissenting annotation by Timm, “Der Abschluß des Ergebnisabführungsvertrages im GmbH-Recht”, BB (1981) 1491.

  40. BGHZ 105, 324.

  41. BGH, GmbHR (1992) 253 -Siemens.

  42. Cf., Lutter and Hommelhoff, supra n. 3, Annex § 13 marginal numbers 52 et seq.; Hachenburg/-Ulmer, supra n. 3, § 53, marginal numbers 140 et seq.; Baumbach/Hueck/-Zöllner, supra n. 3, Final Annex I, marginal numbers 37 et seq.

  43. In contrast, the minority opinion (Lutter and Hommelhoff, supra n. 3, Annex § 13, marginal numbers 64 et seq.) argues for the protection of the outvoted shareholders as opposed to a right of expulsion (squeeze-out) against compensation.

  44. Determined by case law, BGHZ 116, 36 at pp. 41 et seq. — Stromlieferung.

  45. For a broad overview, compare Emmerich and Sonnenschein, supra n. 3, at pp. 389 et seq.

  46. BGHZ 65, 15 with a discussion, inter alia, by Rehbinder, “Treuepflichten im GmbH-Konzern”, ZGR (1976) 386.

  47. Cf., also BGHZ 95, 330 at p. 340 -Autokran.

  48. This was also the argument in BGHZ 95, 330 at p. 343.

  49. Supra n. 49; further developments in case law have recently been summarised by Goette, “Anmerkung zu BGH Beschluß vom 30.3.2000 (VII ZR 370/98)”, DStR (2000) 1066 et seq.

  50. BGHZ 115, 187; the vast number of reactions in the legal literature has been documented by Hachenburg/-Ulmer, supra n. 3, Annex § 77, before marginal number 97.

  51. Cf., the contributions in Hommelhoff, Stimpel and Ulmer (eds.), Der qualifizierte faktische GmbH-Konzern (Cologne 1992).

  52. BGHZ 122, 123; this decision was also a point of departure for discussion by many scholars; cf., the list brought in Hachenburg/-Ulmer, supra n. 3, Annex § 77, before marginal number 97.

  53. Among the Federal Judges, Goette, supra n. 51, at pp. 1067 et seq., once again underlines this issue.

  54. Emmerich and Habersack, supra n. 9, Introduction to § 311 AktG, marginal numbers 20 et seq.

  55. BGHZ 80, 69.

  56. Lutter and Timm, “Konzernrechtlicher Präventivschutz im GmbH-Recht”, NJW (1982) 409, were the first to adopt the concept of preventive self-protection, as is described in BGHZ SO, 69 at p. 75

  57. In detail Lutter and Hommelhoff, supra n. 3, Annex § 13, marginal numbers 12 et seq.; Roth/-Altmeppen, supra n. 3, Annex § 13, marginal numbers 92 et seq.; Hachenburg/-Ulmer, supra n. 3, Annex § 77, marginal numbers 57 et seq.; Baumbach/Hueck/-Zöllner, supra n. 3, Final Annex I, marginal numbers 68 et seq.

  58. The threatened minority shareholders can protect themselves from defeat with a threat to contest the progress of the subsidiary towards dependency with a claim based on the lack of (or apparently insufficient) justification: cf., Lutter and Hommelhoff, supra n. 3, Annex § 13, marginal number 15; Hachenburg/-Ulmer, supra n. 3, Annex § 77, marginal numbers 60 et seq.

  59. Cf., Lutter and Hommelhoff, supra n. 3, Annex § 13, marginal number 19; Baumbach/Hueck/-Zöllner, supra n. 3, Final Annex I, marginal number 61; also cf., Hachenburg/-Ulmer, supra n. 3, Annex § 77, marginal numbers 76 et seq.

  60. For more detail concerning legislative reform projects as regards private company see Hachenburg/-Ulmer, supra n. 3, Annex § 77, marginal numbers 12 et seq.

  61. Cf., Emmerich and Sonnenschein, supra n. 3, at pp. 72 et seq.; Binnewies, Die Konzerneingangskontrolle in der abhängigen Gesellschaft (Munich 1996); Liebscher, Konzernbildungskontrolle (Berlin 1995).

  62. Emmerich and Sonnenschein, supra n. 3, at pp. 79 et seq., 82 et seq.

  63. A uniform overview is provided ibid., at pp. 80 et seq., 83 et seq.

  64. Lutter and Timm, supra n. 58, at pp. 412 et seq., have already indicated a long time ago the phased procedure of business mergers.

  65. Cf., Emmerich and Sonnenschein, supra n. 3, pp. 248 et seq., 252 et seq.; Wilhelm, Die Beendigung des Beherrschungs- und Gewinnabführungsvertrages (Cologne 1976), pp. 109 et seq.

  66. Cf., Bundesministerium der Finanzen, “Referentenentwurf eines Gesetzes zur Regelung von öffentlichen Angeboten zum Erwerb von Wertpapieren und von Unternehmensübernahmen” (Draft Takeover Act) of 12.03.2001, available online at the website of the BMF <www.bundesfinanzministerium.de>.

  67. Concerning the view of the EU concerning the 13th (Takeover) Directive cf., Neye, “Der gemeinsame Standpunkt des Rates zur 13. Richtlinie — ein entscheidender Schritt auf dem Weg zu einem europäischen Übernahmerecht”, AG (2000) 289; the text of the directive in the version adopted is reproduced (in German) in AG (2000) 296, and (in English) in: Council of the European Union, Interinstitutional File (1995) 0341 (COD), Brussels, 21 June 2000, 8129/1/00 Rev. 1,DG C II.

  68. § 35 of the draft (supra n. 68) employs the undetermined legal concept of “control”.

  69. Art. 5 para. 2 a (inter alia reproduced in AG (2000) 299); cf., Neye, supra n. 69, at p. 293; and already Hommelhoff, “Konzerneingangsschutz durch Takeover-Law?”, in: Festschrift J. Semler (Berlin/New York 1993) 455 at p. 468 concerning the guarantee of continued existence in EU law.

  70. Reul, Die Pflicht zur Gleichbehandlung der Aktionäre bei privaten Kontrolltransaktionen (Tübingen 1991).

  71. Concerning legal matters of fact, supra n. 22.

  72. Concerning the trend towards exclusive rights for German marketable share corporations active in the capital market see Lutter, “Gesellschaftsrecht und Kapitalmarkt”, in: Festschrift W. Zöllner (Cologne 1998) 372; Hommelhoff, “Anlegerinformationen im Aktien-, Bilanz- und Kapitalmarktrecht”, ZGR (2000) 748 at pp. 769 et seq.

  73. Supra n. 70.

  74. Cf., supra n. 17; on the other hand, the “Spruchstellenverfahren” was not subject to criticism from those experienced in the transformation (Wiesen, “Der materielle Gesellschafterschutz: Abfindung und Spruchverfahren”, ZGR (1990) 503). — The drafted Takeover Act (supra n. 68) based the compensation on the average marketable share exchange rate (§31); Thereby, the costly, time-consuming and contentious necessity for expert opinions in the valuation of a business becomes redundant.

  75. Compare the (as yet still not adopted) suggestions by Hommelhoff, supra n. 30, at pp. 52 et seq.

  76. Supra n. 30.

  77. Herewith I deviate from the opinion I have held up until now (supra n. 30, at p. 59), as the suggested medium for publicity of the subsidiary’s report cannot be activated as long as business practice and economic auditors regard this report as unimportant, and behave accordingly; cf., also Hoffmann-Becking, supra n. 34, at pp. 20 et seq.

  78. Cf., Forum Europaeum Corporate Group Law, “Corporate Group Law for Europe”, 1 EBOR (2000) 165, at pp. 203 et seq. (ZGR (1998) 672 at pp. 710 et seq.)

  79. Existing literature indicates reservations as regards the suggestions by the Forum Europaeum Corporate Group Law, ibid., concerning the reception of this doctrine in Europe: Blaurock, “Bemerkungen zu einem Europäischen Recht der Unternehmensgruppe”, in: Festschrift O. Sandrock, (Berlin/New York 2000) 79 at pp. 85 et seq.

  80. Concerning the constitutional dimension of the Federal Court of Justice’s jurisdiction in company law, cf., Seidl, “Richterliche Rechtsfortbildung und Verfassungsrecht”, ZGR (1988) 296; Wank, “Richterliche Rechtsfortbildung und Verfassungsrecht”, ZGR (1988) 314.

  81. Supra n. 67.

  82. Concerning the basic notion underlying German corporate group law, see supra n. 2.

  83. ZGR (1998) 672 at p. 771 (theses 23/24) with reasons, pp. 761 et seq.

  84. Fleischer, “Neue Entwicklungen im englischen Konzernrecht”, AG (1999) 350 at pp. 359 et seq.; Fleischer, “Gläubigerschutz in der kleinen Kapitalgesellschaft: Deutsche GmbH versus englische private limited company”, DStR (2000) 1015 at p. 1019; in principle approving Blaurock, supra n. 86, at pp. 91 et seq.

  85. Forum Europaeum Corporate Group Law, supra n. 80, at p. 168 (in English) or at p. 675 (in German).

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  1. Institute for German and European Corporation and Commercial Law, University of Heidelberg, Germany

    Peter Hommelhoff (Prof. Dr. iur., Director)

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Hommelhoff, P. Protection of Minority Shareholders, Investors and Creditors in Corporate Groups: the Strengths and Weaknesses of German Corporate Group Law. Eur Bus Org Law Rev 2, 61–80 (2001). https://doi.org/10.1017/S1566752900000331

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