Germany Federal Court of Justice
7 March 1994 (1994)
A general meeting of Deutsche Bank’s (defendant) shareholders resulted in the approval of a shareholders’ resolution (the resolution) allowing Deutsche Bank to issue new shares totaling 75,000,000 Deutsche marks to increase the number of non-German shareholders. Without the additional non-German shareholders, Deutsche Bank could not gain listings on foreign stock exchanges, including in the United States. The approved resolution provided that existing shareholders would not have preemptive rights to the new shares. A group of shareholders (the aggrieved shareholders) (plaintiffs) objected and filed an action against Deutsche Bank. Deutsche Bank asserted that the resolution was appropriate because Deutsche Bank’s expansion into foreign markets was in the corporation’s best interest, and no viable alternative to achieve the desired result existed. The regional court agreed with Deutsche Bank and dismissed the case. On appeal, the appellate court declared the resolution void because the resolution did not consider existing shareholder rights fairly. Deutsche Bank appealed to the Germany Federal Court of Justice. [Editor’s Note: The Germany Federal Court of Justice is Germany’s highest civil and criminal jurisdiction court.]
Rule of Law
Holding and Reasoning (Per curiam)
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