Constraining Dominant Shareholders’ Self-Dealing: The Legal Framework in France, Germany, and Italy

38 Pages Posted: 7 Jan 2010

See all articles by Pierre-Henri Conac

Pierre-Henri Conac

University of Luxembourg; European Corporate Governance Institute (ECGI)

Luca Enriques

University of Oxford Faculty of Law; European Corporate Governance Institute (ECGI)

Martin Gelter

Fordham University School of Law; European Corporate Governance Institute (ECGI)

Date Written: October 2007

Abstract

All jurisdictions supply corporations with legal tools to prevent or punish asset diversion by those, whether managers or dominant shareholders, who are in control. As previous research has shown, these rules, doctrines and remedies are far from uniform across jurisdictions, possibly leading to significant differences in the degree of investor protection they provide. Comparative research in this field is wrought with difficulty. It is tempting to compare corporate laws by taking one benchmark jurisdiction, typically the US, and to assess the quality of other corporate law systems depending on how much they replicate some prominent features. We take a different perspective and describe how three major continental European countries (France, Germany, and Italy) regulate dominant shareholders’ self-dealing by looking at all the possible rules, doctrines and remedies available there. While the doctrines and remedies reviewed in this article are familiar enough to corporate lawyers and legal scholars from the respective countries, this is less true for many participants in the international discussion, which remains dominated by Anglophone legal scholars and economists. We suggest that some of these doctrines and remedies, namely the German prohibition against concealed distributions, the role of minority shareholders in the prosecution of abus de biens sociaux in France, and nullification suits in all three countries have not received the attention they deserve.

Suggested Citation

Conac, Pierre-Henri and Enriques, Luca and Gelter, Martin, Constraining Dominant Shareholders’ Self-Dealing: The Legal Framework in France, Germany, and Italy (October 2007). European Company and Financial Law Review, Vol. 4, No. 4, 2007; ECGI - Law Working Paper No. 88/2007; Harvard Olin Fellows' Discussion Paper No. 18/2008. Available at SSRN: https://ssrn.com/abstract=1532221

Pierre-Henri Conac (Contact Author)

University of Luxembourg ( email )

162a, avenue de la Faïencerie
Luxembourg-Limpertsberg, L-1511
Luxembourg
00352 46 66 44 68 20 (Phone)
00352 46 66 44 68 11 (Fax)

HOME PAGE: http://wwwen.uni.lu/

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://http:/www.ecgi.org

Luca Enriques

University of Oxford Faculty of Law ( email )

St Cross Building
St Cross Road
Oxford, OX1 3UL
United Kingdom

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http:/www.ecgi.org

Martin Gelter

Fordham University School of Law ( email )

150 West 62nd Street
New York, NY 10023
United States
646-312-8752 (Phone)

HOME PAGE: http://www.fordham.edu/info/23135/martin_gelter

European Corporate Governance Institute (ECGI)

Brussels, B-1050
Belgium

HOME PAGE: http://www.ecgi.org/members_directory/member.php?member_id=621

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