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Protection of members and creditors after the Mobility Directive: challenges in the implementation

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Abstract

The article presents the legal framework for the protection of members and creditors of a company in the context of a cross-border conversion, merger or division pursuant Directive 2019/2121/EU. Reference is made to CJEU case law, which could be considered relevant for the interpretation of these provisions. At the same time the article points out challenges that the national legislator may face when transposing these provisions into national law and offers legal interpretation and suggestions for overcoming these challenges.

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Notes

  1. Directive 2017/1132/EU, which repelled and codified Directive 2005/56/EC formerly known as the tenth company law Directive.

  2. Bang N., Müller J., Cornelius S., Güngör K. and M., Federspiel G., “Cross-border mergers, divisions and conversions”, in: Alexandropoulou A. (ed.), Modernisation of European Company Law, Bruylant, 2021 (forthcoming publication).

  3. S. recital 17 of the MD re. the members and the explanatory memorandum on the proposal of the directive on cross border mobility p. 19 https://www.parlementairemonitor.nl/9353000/1/j4nvke1fm2yd1u0_j9tvgajcor7dxyk_j9vvij5epmj1ey0/vknuh7vgmuyl/v=s7z/f=/com(2018)241_en.pdf.

  4. Grundmann S., European Company Law, 2d ed., 2012, p. 708, 709.

  5. According to recital 3 of Directive 2005/56 (which regulated cross border mergers and has now been repelled by and codified into the CLD) “…unless this Directive provides otherwise, each company taking part in a cross-border merger, and each third party concerned, remains subject to the provisions and formalities of the national law which would be applicable in the case of a national merger…”. S. also Schmidt J. Cross-border Mergers, Divisions and Conversions: Accomplishments and Deficits of the company law package, ECFR 1-2/2019, 222, 250; Winner M., Protection of creditors and Minority Shareholders in cross border transactions, ECFR 2019, 44, 63.

  6. S. also Thomale C., Die EU-Mobilitäasrichtlinie – ein Wachstumsipuls für das österreichische Umgründungsrecht (Teil I), RdW 5-2020, 338, 341; Die EU-Mobilitäasrichtlinie - ein Wachstumsipuls für das österreichische Umgründungsrecht (Teil II), RdW 6-2020.

  7. Directive 78/855/EEC, the so-called third company law directive, regulated the requirements and procedures that MS should implement for the merger of public limited liability companies governed by the same company law (national mergers). This Directive was repelled by directive 2005/56/EC, which has been codified into the CLD. Art. 13 of the 3d directive provided for the protection of creditors including debenture holders (by reference from art. 14) and art. 15 provided for the protection of holders of securities with special rights in the company other than shares e.g. debentures exchangeable for shares, debentures conferring a right of pre-emption over share capital to be issued, profit-sharing debentures and rights to be issued shares (s. KA Finanz AG, para. 65).

  8. Winner M., “Protection of Creditors and Minority Shareholders in cross border transactions”, ECFR 2019, 44, 58.

  9. The applicable law in the referred case regarding the actio pauliana was Italian Law. Directive 2017/1132/EU was not applicable yet. Art. 12 and 19 of the 6th Directive have been codified with the same wording in Directive 2017/1132/EU under art. 146 and 153 respectively.

  10. There are good arguments both in favour as well as against this decision, which will be presented and analyzed in a future publication.

  11. Thomale C., “Die EU-Mobilitäasrichtlinie: ein Wachstumsimpuls für das Österreichische Umgründungsrecht (Teil I)”, RdW 5-2020, 338, 341.

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Authors and Affiliations

  1. European University Cyprus, Nicosia, Cyprus

    Antigoni Alexandropoulou

  2. Council of Bars and Law Societies of Europe, Brussels, Belgium

    Antigoni Alexandropoulou

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Alexandropoulou, A. Protection of members and creditors after the Mobility Directive: challenges in the implementation. ERA Forum 22, 9–20 (2021). https://doi.org/10.1007/s12027-020-00647-1

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