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

Published online by Cambridge University Press:  17 February 2009

Peter Hommelhoff
Peter Hommelhoff
Affiliation:
Prof. Dr. iur., Director, Institute for German and European Corporation and Commercial Law, University of Heidelberg.
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Extract

German corporate group law (or rather, to be more precise, the German Recht der verbundenen Unternehmen, i.e., the law of affiliated companies, §§ 15 ff., 291 ff. Marketable Share Company Act [Aktiengesetz, abbreviated AktG]) owes its existence to special concerns of the German legislature at the end of the 1950s and the beginning of the 1960s regarding the ability to protect the interests of outsiders in group-dependent marketable share companies (Aktiengesellschaften). The interests of shareholders and creditors were considered to be so intensive, so inscrutable and so continuously endangered, that the legislature believed that the existing company law was incapable of satisfactorily providing the requisite protection.

Type
Articles
Information
European Business Organization Law Review (EBOR) , Volume 2 , Issue 1 , March 2001 , pp. 61 - 80
Copyright
Copyright © T.M.C. Asser Press and the Authors 2001

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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.Google Scholar

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 IGoogle Scholar; Emmerich, and Sonnenschein, , Konzernrecht, 6th ed. (Munich 1997) pp. 381 et seq.Google Scholar; Hachenburg, / -Ulmer, Gesellschaften mit beschränkter Haftung, 8th ed. (Berlin/ New York 1997) Annex § 77Google Scholar; Lutter, and Hommelhoff, , GmbH-Gesetz, 15th ed. (Cologne 2000) Annex § 13Google Scholar; Roth, / -Altmeppen, GmbHG, 3rd ed. (Munich 1997) Annex § 13.Google Scholar

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

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

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

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 fur GmbH (ed.), Der GmbH-Konzern (Cologne 1976) 178.Google Scholar

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

10 Cf., Kleindiek, , Strukturvielfalt im Personengesellschafts-Konzern (Cologne 1992) p. 158Google Scholar; cf., also BGHZ 105, 168 at pp. 183 et seq. – HSW.

11 BGH, AG (2000) 129.

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

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

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

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

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

17 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.

19 E.g., the case AudilNSU (Bundesgerichtshof, BGH) JZ (1976) 561 with comments by Lutter.Google Scholar

20 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.Google Scholar

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

22 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.Google Scholar

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

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

25 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.

26 Supra n. 21.

27 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.

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

29 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).

30 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: des Deutschen Juristentages, Ständige Deputation (ed.), Gutachten für den 59. Deutschen Juristentag, Gutachten G (Munich 1992) 16.Google Scholar

31 Criticism in particular by the Business Law Commission (Unternehmensrechts-kommission): der Justiz, Bundesministerium (ed.), Bericht über die Verhandlungen der Unter-nehmensrechtskommission (Cologne 1980)Google Scholar 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. 159Google Scholar; cf., also the sources mentioned by Emmerich and Habersack, supra n. 9, introduction to § 311 AktG, marginal number 8, footnote 19.

32 Hommelhoff, , “Praktische Erfahrungen mit dem Abhängigkeitsbericht”, ZHR (1992) 295.Google Scholar

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

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

35 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. 1 p. 836). Cf., e.g., the overview of Lutter and Hommelhoff, supra n. 3, Einleitung, marginal number 7.

36 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 Unternehmens-verbindungen und die Beschlüsse des 59. Deutschen Juristentages”, DB (1992) 2429 at p. 2430.Google Scholar

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

38 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.Google Scholar

39 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.Google Scholar

40 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.

41 More detail in Hachenburg, / -Barz, GmbHG, 7th ed. (Berlin/ New York 1979) § 13 Annex II marginal number 31 with further referencesGoogle Scholar; see also OLG (Oberlandesgerichi) Düsseldorf, BB (1981) 1482Google Scholar, with the dissenting annotation by Timm, , “Der Abschluß des Ergebnisabführungs-vertrages im GmbH-Recht”, BB (1981) 1491.Google Scholar

42 BGHZ 105, 324.

43 BGH, GmbHR (1992) 253 – Siemens.

44 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.

45 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.

46 Determined by case law, BGHZ 116, 36 at pp. 41 et seq. –Stromlieferung.

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

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

49 Cf., also BGHZ 95, 330 at p. 340 – Autokran.

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

51 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.Google Scholar

52 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.

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

54 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.

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

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

57 BGHZ 80, 69.

58 Lutter, and Timm, , “Konzernrechtlicher Präventivschutz im GmbH-Recht”, NJW (1982) 409Google Scholar, were the first to adopt the concept of preventive self-protection, as is described in BGHZ 80, 69 at p. 75

59 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.

60 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.

61 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.

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

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

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

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

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

67 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.Google Scholar

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

69 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) 289Google Scholar; 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, DGCIJ.

70 § 35 of the draft (supra n. 68) employs the undetermined legal concept of “control”.

71 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.Google Scholar

72 Reul, , Die Pflicht zur Gleichbehandlung der Aktionäre bei privaten Kontrolltransaktionen (Tubingen 1991).Google Scholar

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

74 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) 372Google Scholar; Hommelhoff, , “Anlegerinformationen im Aktien-, Bilanz- und Kapitalmarktrecht”, ZGR (2000) 748 at pp. 769 et seq.Google Scholar

75 Supra n. 70.

76 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)Google Scholar. – The drafted Take-over 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.

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

78 Supra n. 30.

79 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.

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

81 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.Google Scholar

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

83 Supra n. 67.

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

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

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

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