Freeze-Out Transactions in Germany and the U.S.: A Comparative Analysis

Author:

Krebs Christian A.

Abstract

A freeze-out is a transaction in which a controlling shareholder forces out the minority shareholders and compensates them in cash or stock. A successful freeze-out transaction marks the end of the exchange-traded life of a corporationit is a “going private” transaction. A freeze-out is therefore the counterpart to an initial public offering. Whereas the latter leads to the public listing of a corporation and thus a multiplication of shareholders, the freeze-out transaction aims at reducing the number of shareholders of a corporation to one.

Publisher

Cambridge University Press (CUP)

Subject

Law

Reference209 articles.

1. Cannon Kimble Charles , Augmenting the Duties of Directors to Protect Minority Shareholders in the Context of Going-Private Transactions: The Case for Obligating Directors to Express a Valuation Opinion in Unilateral Tender Offers After Siliconix, Aquila, and Pure Resources, 2003 Colum. Bus. L. Rev. 191 (2003)

2. Levy Ely R. , Freeze-Out Transactions the Pure Way: Reconciling Judicial Asymmetry Between Tender Offers and Negotiated Mergers, 106 W. Va. L. Rev. 305 (2004)

3. Resnick Brian M. , Note, Recent Delaware Decisions May Prove to Be "Entirely Unfair" to Minority Shareholders in Parent Merger with Partially Owned Subsidiary, 2003 Colum. Bus. L. Rev. 253 (2003).

4. Oberlandesgericht Stuttgart [OLG – Higher Regional Court], Case No. 20 W 13/08, May 5, 2009, 2009 Zeitschrift für Wirtschaftsrecht (ZIP) 1059 (2009) (Ger.); Noack & Zetsche supra note 150, Sec. 39a mn. 28.

5. Christopher A. Iacono, Comment, Tender Offers and Short-Form Mergers by Controlling Shareholders Under Delaware Law: The “800-Pound Gorilla” Continues Unimpeded—In re Pure Resources, Inc., Shareholders Litigation, 28 Del. J. Corp. L. 645, 668 (2003); Subramanian, supra note 1, at 51.

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