4.4.7.1 Introduction

Any shareholder dissenting from the merger, cross-border merger, demerger, or conversion may wish to use the appraisal right. In order to be entitled to invoke the appraisal right, the shareholder has to vote against the approval of the merger contract, the draft terras of cross-border merger, the demerger contract, or the conversion. In addition, the dissenting vote of the shareholder has to be recorded in the minutes of the general meeting. Nonetheless, a shareholder is also entitled to use the appraisal right if he has been wrongfully refused admission to the general meeting, if the general meeting is not duly convened, or if the object of the resolution was not properly announced.1

With respect to mergers, cross-border mergers, demergers, and conversions, the enforcement of the appraisal right takes place quite similarly. If not expressly indicated otherwise, hereafter the different types of reorganization are jointly referred to as the "Reorganization".

A shareholder that duly invokes the appraisal right is entitled to a claim (Anspruch) for compensation in cash in exchange for the loss of his shares. Within two months after the day of the announcement of the Reorganization by the court of the trade register, the shareholder has to accept the offer for the purchase of his shares.2 After this two-month period, the appraisal right can no longer be invoked.

With the acceptance of the offer by the shareholder, a transfer contract is concluded between the shareholder and the acquiring or converted entity.3 The compensation is raised annually by an interest rate of 2% above the discount rate of the German Central Bank (Deutsche Bundesbank).4 The interest period starts the day after the date of the announcement of the Reorganization. The acquiring or converting entity has to bear the costs of the transfer of the shares.5

If the GmbH acquires own shares, the GmbH must comply with the capital maintenance rules for the protection of the company's share capital.6 In § 33III GmbHG explicit reference is made to the appraisal rights of the UmwG. It is provided in § 33 III GmbHG that the purchase of own shares by a GmbH in the case of application of the appraisal rights is allowed if done within six months after the Reorganization becomes effective. The GmbH can only purchase own shares if sufficient funds are available to build up a nondistributable reserve for own shares.7 The funds have to derive from the distributable reserves, so that the protected capital of the company is not affected. In contrast to the usual situation of the purchase of own shares by the GmbH, the condition that shares must be fully paid up, does not apply.

Remarkably, § 33III GmbHG does not contain the condition that the shares have to be fully paid up. Consequently, partly paid-up shares can be acquired by the GmbH.8

In the situation that a GmbH is not permitted to purchase own shares, the claim is suspended and can be enforced once sufficient distributable reserves are present, or, if this does not occur, the shareholder can invoke the winding-up remedy.

In the alternative of using the appraisal right, the shareholder may choose to transfer his shares to someone else. If the shares are transferred in the period between the shareholders' resolution approving the Reorganization and two months after the day of announcement of the merger, any restriction on the transfer of the shares does not apply.9 In fact, the shareholder can achieve his exit by finding a willing transferee.