Update: Delisting Made Easier – Federal Supreme Court on Change of Market Segment for Listed Companies

In November 2013, we had reported on the Federal Supreme Court’s (Bundesgerichtshof)  change of direction on delistings.  In the Frosta judgment, the court gave up its previous position, as developed in the 2002 Macroton case, that delistings triggered the duty of the corporation itself or its majority shareholders to make a mandatory offer to buy out the minority shareholders. Professor Dirk Zetzsche reviews the new legal environment for going-private transactions  in Germany in an English language article, “Going Dark Under German Law – Towards an Efficient Regime for Regular Delisting.” Here is the abstract: Continue reading

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Delisting Made Easier: Federal Supreme Court on Change of Market Segment for Listed Companies

In a judgment in 2002 in re: Macroton, the Federal Supreme Court (Bundesgerichtshof) had held that the delisting of shares in a German stock corporation (Aktiengesellschaft) did require shareholder approval in an AGM. In addition, it did trigger the duty of the corporation itself or its majority shareholders to make a mandatory offer to buy out the minority shareholders. In a judgment in October 2013 that was published today, the Federal Supreme Court revisited that issue. Reversing its previous case law, the court held that a change of market segment, in the case at hand leaving the Regulated Market of the Berlin Stock Exchange and moving the listing to the Entry Standard (Open Market) of the Frankfurt Stock Exchange did not give rise to a claim of minority shareholders to be bought out in cash (angemessene Barabfindung). Continue reading

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