In the Frosta judgment from October 2013, the German Federal Court of Justice (Bundesgerichtshof, BGH) reversed its ruling made in the Macrotron case (2002) regarding delisting in Germany. In the Macrotron judgment, the Federal Court of Justice held that a delisting was only allowed if it had been previously approved by a majority resolution of the shareholders' meeting. Thereby it based its judgment on the shareholder's fundamental right to private property (Article 14.1 of the German Constitution), i.e. the shareholder's ability to sell its stock on an EU-regulated market forms an integral part of the fundamental part of the ownership of a listed stock and a delisting would therefore adversely affect the shareholder's constitutional rights. Furthermore the Federal Court of Justice held that the company or the majority shareholder would need to submit a mandatory offer to the minority shareholders to purchase their stock at an adequate price. As a result of this decision, delisting became more complex, costly and occurred less frequent in Germany.
In 2012, the German Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) expressly held that trading in a regulated market is not protected per se by the fundamental right to private property. However, the Federal Constitutional Court gave the Federal Court of Justice the opportunity to uphold its Macrotron case law in future cases by supporting it with a new reasoning.
In the most recent Frosta case, the board of management had resolved, with consent of the supervisory board, to move its listing from the EU-regulated market of the Berlin Stock Exchange to the less regulated Entry Standard (Open Market) of the Frankfurt Stock Exchange. In the light of the Federal Constitutional Court's decision from 2012 the Federal Court of Justice decided not to uphold its ruling made in Macrotron in 2002. Moreover, the Federal Court of Justice held that the minority shareholder's fundamental right to property will not be impacted by trading shares in other market segments that are perhaps less liquid. The Federal Court of Justice considered potentially analogous procedures, e.g. whether the delisting was comparable to a merger, squeeze-out or similar measure, thereby justifying analogous requirements (shareholder approval, purchase offer and court review of the price). As the federal judges did not find sufficient analogies, they reversed the Macrotron case law and stated that neither a shareholder approval nor a purchase offer is required by German corporate law. Instead, the existing securities laws regulating delisting afford sufficient protection to the shareholders. Listing rules of stock exchanges in Germany typically provide that a delisting shall only be approved if there is either a purchase offer or a sufficient time period before the delisting becomes effective, enabling investors to sell their shares on an EU-regulated market.
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