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
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
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In a recently released milestone decision, the Swiss Federal Supreme Court held, for the very first time, that the duty of financial intermediaries to report suspicions of money laundering...
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).