ࡱ> y>bjbjO O .D-a-aB%rjfffzzz8t&Lzg2,rr"$v $-0000000$4E7L05f  0ff!2--- ff0- 0--"0n0):00720g2B0,7o-F7n07fn0DA-4AAA00-:AAAg2 7AAAAAAAAA :J.S.D. Edita ulinovi-Herc, Full Professor J.S.D. Antonija Zubovi, Research Assistant Faculty of Law University of Rijeka OPEN ISSUES OF THE SQUEEZE OUT RIGHT IN CROATIAN AND EU COURT PRACTICES Introduction The right to a transfer of shares of the minority shareholders (i.e. squeeze-out) implies a major shareholders right to demand a transfer of the minority shareholders shares thereby terminating their membership in the joint-stock company. The minority shareholders may have a complementary right in regards to the major shareholder i.e. a right to demand the major shareholder redemption of their shares (sell-out). This right serves as a quid pro quo to the squeeze-out right. The squeeze-out right is widely used in the domestic corporate practice. For instance, only in 2008, sixteen squeeze-outs had been carried out, while 2009 records eight cases, 2010 thirteen, and 2011 eight cases of squeeze-outs. By June 2012, two squeeze-out cases have been carried out. On the other side, practice has shown that the minority shareholders rarely exercise their sell-out right. This is also due to the fact that it pays more to the minority shareholders for the major shareholder to initiate the squeeze-out procedure (under the Act on the Takeover of Joint Stock Companies) since he or she shall bear the expenses of carrying out the process underway. The scope of the Companies Act does not comprise the sell-out right. The practice has also shown that squeeze-out procedures represent an overture to delisting the shares from the market since the major shareholder becomes the only shareholder in the joint-stock company which, consequently, does not have a sufficient number of shares in free float also a listing criterion. The concept of squeeze out emphasizes the need to protect the minority shareholders. The national legislators who introduced the squeeze out right provide detailed rules on the key issues: such as the percentage of shares the major shareholder is obliged to hold in order to be authorized to request the transfer of the shares of the minority shareholders (threshold), the body authorized to decide on the squeeze out, provisions on determination of the severance pay, including the provisions when and how it becomes due etc. Since, in most cases, minority shareholders are involved in the squeeze out procedure against their will, legitimacy of the squeeze-out right is often questioned, in front of national constitutional courts, as well as before the European Court of Human Rights who was called to judge upon its accordance with the European Convention on Human Rights. This paper provides an overview of the legal regime of squeeze-out and sell-out rights in Croatian law under the Companies Act and the Act on the Takeover of Joint Stock Companies, as well as in the case law of Commercial Courts in the Republic of Croatia and the Constitutional Court of the Republic of Croatia. With regards to the controversies surrounding this principle both in the Croatian and EU law, the paper presents decisions interesting from the constitutional point of view, with a reference to the Croatian and German constitutional courts case law, as well as that of the European Court of Human Rights. The paper concludes with suggestions on how to improve the regulation of these rights within the Croatian law, having in mind the issues raised in the domestic commercial courts case law. 2. Determining the squeeze-out and sell-out rights in Croatian law Croatian law recognizes both legal concepts the right to demand transfer of shares from minority shareholders (squeeze-out) and the right to require redemption of the shares of minority shareholders to major shareholder (sell-out). However, it is important to point out that while the squeeze-out right is regulated both by the Companies Act and the Act on the Takeover of Joint Stock Companies, the sell-out right of minority shareholder is only recognized by the Act on the Takeover of Joint Stock Companies (hereinafter: Takeover Act), and consequently not permitted by the Companies Act. 2.1. Legal regime of squeeze out right under the Companies Act The right to a transfer of shares of minority shareholders (squeeze-out) is regulated under Articles 300.f 300.k of the Companies Act, In accordance with Article 300.f of the Companies Act, the general meeting, upon the request of a shareholder in possession of at least 95% of the share capital (i.e. the major shareholder) may reach a decision upon which the shares of minority shareholders, with corresponding severance payment due in cash, are to be transferred. The general meeting may reach this decision by simple majority, if the companys charter does not require a larger majority or additional conditions. The general meeting announces its decision upon the major shareholders request, either a natural or a legal person. It needs to be a single person. Several shareholders could not be treated as major shareholder, even in the case they are acting in concert. A manner of acquisition of the shares in question is irrelevant. The share pertaining to the shareholder shall be determined proportionately with the nominal amount of the share pertaining to this shareholder on the grounds of the total share capital of the company, while the company's own shares should be deducted from the share capital amount. Shares belonging to another party holding them for the account of that company shall be identified as company's own shares (Art. 474 par. 2 of the Companies Act). Shares pertaining to a subsidiary company or to a company holding shares for the company's account or for the account of a company subordinated to the company are also considered as shares belonging to the company, and if the company is owned by a sole proprietor the companys shares shall be those which would be included in its assets in any case. A minority shareholder could be one or more shareholders who had acquired the maximum of 5% of the share capital amount. The major shareholder is obliged to payout the corresponding severance pay for the shares, in cash, to the minority shareholder(s). The amount of money, in accordance with Companies Act, is to be set by the major shareholder alone. The management board i.e. executive officers, however, are obliged to provide the major shareholder with all the necessary documentation and information regarding the circumstances at the time of the decision making, and the same are to be taken into consideration. Since a squeeze-out does not imply the termination but a continuance of business, the major shareholder should opt for a dynamic method during the assessment (evaluation on going concern basis). The fact that such shares, primarily due to the structure of the company members rights, will be of no particular interest on the market should be also taken into account. In accordance with the principle of the equal position of the shareholders, the amount of severance pay has to be equal for all shareholders. Potential differences could appear if pledged shares are in question. Under Art. 300 par. 2 of the Companies Act, an interest in amount of a discount rate with the Croatian National Bank increased by five percent points for the period starting from the date of the court registration of the general meetings decision on share transfer to the date of the minority shareholders payment, is to be added on the amount of the severance pay. An amendment in 2009 Companies Act increased the amount of percentage points from two (2003 Companies Act) to five, therefore providing the minority shareholders with a greater level of security. Therefore, an individual calculation for each minority shareholder is to be made depending on the time of payment. This mandatory rule does not resolve the major shareholder from liability for any other potential damage that might be caused to the minority shareholder. The Companies Act requires from the major shareholder to deliver a bank statement in which the bank, as a co-debtor, guarantees pay off of the severance pay to minority shareholders increased by the corresponding interests without delay upon recording the general meetings decision in the court register. This provision aims protecting the rights of the minority shareholders. Not only that a bank takes a co-guarantor/co-debtor role in that corporative action, but also, by requiring from it to effect the payment without delay, after the general meetings decision is inscripted into the court register, allows minority shareholder to claim from the bank a payment very same day after the day inscription was made. The practice shows that banks often issue bank guarantees instead of before mentioned statements. The minority shareholders are authorized to submit a request to the bank even before to the major shareholder. If the major shareholder had not delivered the statement in question to the management board, they would not be obliged to convene the general meeting. In the case the general meeting was assembled even without required bank statement, the decision rendered at this meeting could be contested as voidable. The major shareholder submits a request to convene the general meeting the management board, while the Companies Act is silent as to the form of this request. The management board decides upon the request for a call of general meeting and is not obliged to seek consent of the supervisory board. The Act requires, as mandatory, that the contents of the agenda should consist of - identification data of the major shareholder and the amount of severance pay set by the major shareholder. The major shareholder is to issue a written report to a general meeting on the preconditions justifying the transfer of the shares and arguments justifying the adequacy of the severance pay. The adequacy of the severance pay must be reviewed by one or more experts appointed upon the major shareholders request by the court in the non-litigation procedure (Art. 300.h par. 2 of the Companies Act). Since the Companies Act calls for adequate application of the provisions of the Art. 481.a Companies Act regulating the review of the entrepreneurial agreements, it means that experts in question are auditors. A provision of Art. 300.h par. 3 Companies Act prescribes the documentation that must be presented at the business premises of the head office from the day of convocation of the general meeting, and copies of which are to be forwarded to each of the shareholder, free of charge and without delay, upon his or her request. A revised Companies Act from 2009 abolishes the company of such duties if the documentation had been made available on the company internet page during the same time (Art. 300.h par. 5 of the Companies Act). The companys management board i.e. executive officers have to submit a report to the court register to record the general meetings decision on the transfer of the shares. The board is obliged to issue a statement that action against general meetings decision (claiming it is null and void) had not been brought before the court within the allowed deadline or that the action for avoidance had been dismissed (res iudicata). Therefore, the board is obliged to wait for the submission of the report until the deadline for filing a suit for challenging the general meetings decision had elapsed. Art. 362 of the Companies Act allows the board i.e. executive officers to submit a report just after the general meeting had been held if all the shareholders were present and not one had objected to the ruling had been officially recorded. The moment the ruling on the share transfer is filed in the court register (Art. 300.j par. 3 of the Companies Act) all of the minority shareholders shares are ex lege transferred onto the major shareholder. Therefore, the entry in the court register has a constitutive character. Furthermore, the Act states that if shares have been issued in materialized form, the minority shareholders request for a severance pay out is to be filed into those shares before they are transferred to the major shareholder. The regulation in question has been introduced to the Act with the purpose of ensuring that, were there subsequent transfers of those shares occurred, the new beneficial owner would take over the obligation to pay out the severance as well. Companies Act does not regulate technical details regarding severance pay out. This would depend on the form under which the shares have been issued. If these are shares in a dematerialized form filed under the account at The Central Depository and Clearing Company (CDCC), in accordance with the severance pay out agreement, signed by the company and the CDCC, the CDCC, based upon the decision on filing the ruling issued by the Commercial Court, is obliged to carry out the transfer of all shares from the minority shareholders accounts as well as the severance pay out previously paid in on the CDCCs account. It should be noted that the domestic corporate practice records cases of delisting of company shares on the Zagreb Stock Exchange after a squeeze-out was effected. This was due to the fact that after a squeeze-out, the major shareholder became the only company shareholder and free float requirement for stock exchange listing is not longer satisfied. 2.2. Legal regime of squeeze out right under the Act on the Takeover of Joint Stock Companies and its compatibility with the Directive on Takeover Bids The Directive on Takeover Bids was implemented into Croatian law by Takeover Act. The Directive has only determined minimum harmonization requirements, and the Croatian legislator took the liberty to prescribe additional conditions going along the ones under the Directive. Shaped according to the Directive, the Takeover Act recognizes both the squeeze-out and the sell-out right. The Takeover Act requires that the squeeze-out and sell-out rights are to be applied only if the takeover of the offeree company has been previously carried out. The Directive provides that both rights would apply only to listed companies, while the Takeover Act expands its application also to the offeree companies that are listed (joint stock company with head office in the Republic of Croatia: either that whose shares with voting rights are admitted to trading at the regulated market in the Republic of Croatia in accordance with the provisions of the Capital Market Act) but also to joint stock companies having more than 100 shareholders and with the share capital amount at least 30,000,000.00 HRK (Art. 2 par. 1 of the Takeover Act), whether listed or not. Since the obligation to list the shares to trading at a regulated market in the Republic of Croatia is not anymore tied to the amount of capital and/or the existence of the dispersed (beneficial) ownership, the squeeze-out and sell-out rights might become applicable even if the shares of an offeree company are not listed. It is important to mention that due to explicit legal provisions, the squeeze-out procedure after the takeover bid could not fall under the application of the provisions on a transfer of minority shares by the Companies Act. The Directive on Takeover Bids states that Member States shall ensure that an offeror is able to require all the holders of the remaining securities to sell him/her those securities at a fair price. Member States were to introduce that right in one of the following situations: (a) where the offeror holds securities representing not less than 90% of the capital carrying voting rights and 90% of the voting rights in the offeree company, or (b) where, following acceptance of the bid, he/she has acquired or has firmly contracted to acquire securities representing not less than 90% of the offeree company's capital carrying voting rights and 90% of the voting rights comprised in the bid. Furthermore, in case referred to in (a), Member States may set a higher threshold that may not, however, exceed 95% of the capital carrying voting rights and 95% of the voting rights. The Croatian legislator has opted for the first case with an option of raising the threshold to 95% of the capital carrying voting rights, where the voting shares of persons acting in concert are added to the offerors shares. Regulation under Art. 15 par. 3 of the Directive state Member States are to secure rules within their national law that would ensure a calculation when the threshold has been reached. The Art. 8 of the Takeover Act sets rules for the calculation of the number and percentage of voting rights. For the purpose of this Act, when calculating the number of voting shares of the offeree company, held by the offeror and the persons acting in concert with him, the following voting shares of the offeree company shall be taken into account: those acquired by these persons, those transferred by these persons to a third party as a collateral, unless that party is authorized to exercise the voting right arising from these shares independently of the instructions of these persons, those with respect to which these persons have a right of usufruct, those that can be acquired by the offeror by virtue of an expression of will, e.g. call option, those entrusted to these persons, if they may exercise independently the voting rights arising from those shares, according to their own judgment, without a special instruction of the shareholders. For the purpose of the Takeover Act, the percentage of voting shares of the offeree company are to be calculated relative to all the shares of the offeree company issued with a voting right, including own shares of the offeree company and shares with respect to which exercising of voting rights is prohibited or restricted by law or a legal transaction. The offeror shall have a right to a transfer of such shares of minority shareholders within 3 months after the expiry of the period for acceptance of the takeover bid. The Croatian legislator has broadened the scope of application of squeeze-out right provided that preference shares carrying no voting rights could be also subject to a takeover bid, and that, following the takeover bid, the offeror and the persons acting in concert with the offeror hold a minimum of 95% of such shares, the offeror shall also have a right to a transfer of such shares of minority shareholders at a fair price, within 3 months after the expiry of the period for acceptance of the takeover bid. The offeror does not gain its right by simply reaching the threshold, but is entitled to submit a request to the CDCC. The offeror shall, in the same time of submitting the request, notify of the request also the minority shareholders, the offeree company, regulated market and multilateral trading facility on which shares of the offeree company are admitted to trading and the Croatian Financial Services Supervisory Agency (CFSSA), and shall publish the same with no delay (Art. 45 par. 4 of the Takeover Act). The offerors right to transfer shares at fair price is explicitly spelled out. The Directive sets two presumptions on what is regarded a fair price: one, regarding a voluntary bid, and the other concerning a mandatory bid. According to Croatian law a fair price shall imply a price determined in a takeover bid, increased by a difference in price if the offeror or the person acting in concert with the offeror acquires the shares of the offeree company which were subject to a bid, within one year following the date of expiry of the period for acceptance of the bid, at a price higher than the one in the bid. Unlike the Directive, the presumption of a fair price in the Republic of Croatia is applicable both with voluntary and mandatory bids. For the purpose of securing the price the offeror shall allocate cash to a separate account held with a depository or shall deliver to a depository an irrevocable first-demand bank guarantee issued in favor of minority shareholders, for the amount necessary for payment of all the shares of minority shareholders. The Act also determines the moment for the CDCC to carry out a transfer of shares from the shareholders account to the offerors account and shall pay out the minority shareholders, with no delay. This is due after it has established: 1. that following a takeover bid, the offeror and the persons acting in concert with the offeror hold a minimum of 95% of voting shares of the offeree company and 95% of preference shares without voting rights, in the case of application of par. 2 of Art. 45, that the offeror has secured consideration, referred to in par. 5 of Art. 45,for the shares that are subject to the request, that a period of 3 months has not expired after the end of the period for acceptance of the takeover bid. All of the conditions have to be cumulatively met for the CDCC to transfer the shares to the offerees account and finalize the pay out to the minority shareholders. In order to secure the minority shareholders from the potential misuse of the squeeze-out rights, the Takeover Act explicitly states the offeror shall bear all the costs of transfer of shares of minority shareholders. The right of sale of shares of minority shareholders (sell out) is regulated under Art. 46 of the Takeover Act. If, following the takeover bid, the offeror and the persons acting in concert with the offeror hold a minimum of 95% of voting shares of the offeree company, minority shareholders shall have a right to sell their voting shares to the offeror, within 3 months after the expiry of the period for acceptance of the takeover bid, and the offeror shall be obliged to buy these shares at a fair price. The period for the minority shareholders to claim their sell-out right is the same as the period for the offeree to claim its squeeze-out right. The deadline is a preclusive in its nature so the minority shareholders cannot demand the purchase of their shares upon its expiry. Since the Companies Act does not ensure the same right to the minority shareholders, those claims that became overdue by the Takeover Act, will not be able to claim their right at all. The Takeover Act sets the threshold for the sell-out right the same as for the squeeze-out. The offeree is bound to buy up shares at a fair price. The provisions on a fair price, guarantee, preference shares with no voting rights, submitting a request to the CDCC, finalizing the share transfer onto the offerees account and minority shareholders pay out under the squeeze-out procedure are mutatis mutandis applicable to the sell-out right as well. Minority shareholders are additionally protected by a provision enabling them to demand the performance of the obligation in front of a competent commercial court if the offeror fails to fulfill it (Art. 46 par. 3 of the Takeover Act). This has expanded the minimal criteria set by the Directive on Takeover Bids. 3. The right of the transfer of shares of minority shareholders (squeeze-out) in the commercial courts case law To ensure their rights are adequately protected in the squeeze out procedure the minority shareholders may request the verification of the fairness of the severance pay which will not impede or delay the registration of the resolution. Moreover the minority shareholders may file an action of avoidance, if they can provide evidence as to deficiency in the proceedings of the squeeze-out. In later case the squeeze-out cannot be registered in the commercial register, resulting in delay or impediment of the completion of the squeeze-out process. Under Art. 300.k of the Companies Act, the Croatian legislator spells out that the validity of the general meetings decision on the share transfer cannot be challenged by a court action complaint solely on the grounds that the amount of a severance pay set is not considered adequate. Adequacy of the severance pay can be however questioned and determined by a commercial court with a jurisdiction over the territory of the companys head office upon the minority shareholders request. The request is processed in so called non-litigation procedure which is considered as urgent, and the potential appeal is to be decided upon by the High Commercial Court within the 30-days period (Art. 40 par. 1-3 Companies Act). The same applies if the major shareholder does not offer a severance pay amount in cash or fails to do so in a proper manner, if the suit for the annulment of the general meetings decision was not filed or was not filed in the required deadline, or in case it was filed, was effectively dismissed or withdrawn. A request for determining the amount of severance pay may be submitted to the court only within two months from the day the entry of the decision on the share transfer into the court register is considered published. A revised Companies Act from 2009 under Art. 300.k has brought provision that define the some procedural issues with more specificity. For instance, if more than one process is underway, the court shall join them. If the court decides that the amount of severance pay set by the major shareholder was inadequate and as a consequence the major shareholder is obliged to pay out a higher amount, or the severance pay was not offered at all or was not offered in proper manner, court would order that major shareholder would bear the litigation costs of dissenting shareholders who were parties at the court process. The court decision on the amount of severance pay affects all minority shareholders, whether or not they themselves have participated in the process in which the decision had been reached. Therefore, the minority shareholders have a procedural position of eventual joint (co)litigants (potencijalni jedinstveni suparni ari), but they are not necessary joint (co)litigants (nu~ni suparni ari). Domestic case law shows that minority shareholders were generally successful in obtaining a higher severance pay in the commercial court proceedings. In a case settled under the High Commercial Court, the major shareholder had set the amount to 2.200,00 HRK per share. The minority shareholder had requested a legal review of the adequacy of the severance pay. The Court of First Instance had valued the amount set by the major shareholder as inadequate and set a new amount to 2.500,00 HRK per share to be paid out to the minority shareholders by the major shareholder. The petitioner, unsatisfied with the amount of the severance pay, filed a complaint stating the court had failed to observe the fact that the minority shareholders, while been squeezed out of the company, lost the profit they would have been generated if they had remained in the position of company shareholders. According to the petitioner, the first instance court had solely determined the market value of the share, but not lucrum cessans that should be added to the market value of the share. The Court had pointed out in its decision upon appeal that the lost profit is a form of damage which is injurers responsibility for which he/she is to be blamed because the other person (injured) had not been able to realize the profit otherwise normally expected, and for which there is an objective presumption those profits would eventually be realized, had they not been affected by damaging act of the injurer, either committed action or by ommission. The High Commercial Court took the stand that the Court of First Instance had taken the companys future business into consideration as well, when measuring adequacy of severance pay. Based on the presented reasons, the High Commercial Court denied the claimants appeal and confirmed the decision reached by the Court of First Instance. The minority shareholders squeezed-out from the company G. d.d. from S., in which the major shareholder M.M. set the amount of severance pay to 712,00 HRK per share, is also a case of considerable significance. The minority shareholders initiated a process of review of the adequacy of the severance pay and the Court of First Instance reset the value to 1.762,00 HRK per share. The major shareholder M.M. filed an appeal to the decision. The High Commercial Court dismissed the appeal and confirmed the decision of the Commercial Court. The major shareholder filed a constitutional complaint against the decision of the High Commercial Court claiming the disputed decision had violated his constitutional rights guaranteed by Art. 18, 48 and 49 of the Constitution of the Republic of Croatia. The Constitutional Court reached a decision overruling the submitted constitutional complaint. In cases where minority shareholders filed an action for annulment of general meetings decision on the share transfer at the Commercial Court, it should be noted that in most cases shareholders refer to the provision of Art. 360 par. 2 of the Companies Act that enables the decision to be declared void on the premises that a shareholder with its voting at the general meeting had tried to acquire a benefit for him or for the other shareholder at the companys or other shareholders expense. However, the law states the provision does not apply if the decision adequately compensates shareholders that would be injured by itself. In the case of TDR d.d. squeeze-out, the court had pointed out that in acquiring benefit, it is the intention to gain advantage thats important, not the scale of the benefit. Therefore, the meetings decision must be suitable for obtaining the benefit. In general courts had rejected this provision of the Art. 360 par. 2 of the Companies Act as a valid ground for annulment. 4. Constitutionality of legal provisions on squeeze-out right The squeeze-out right as a legal concept was questioned from the constitutional standpoint as well. The constitutionality of it has been subject of debate in the Siemens case discussed at the Constitutional Court of the Republic of Croatia. Submissions for initiating a procedure of evaluating compliance of the squeeze-out provisions of the Companies Act with the Constitution of the Republic of Croatia have been made by nine small shareholders at Siemens joint stock company (Croatia). They had alleged non-constitutionality of the whole chapter of the Companies Act regulating squeeze out and they had claimed their incompatibility with the following paragraphs of the Constitution: Art. 5, Art. 48 par. 1 and 2, Art. 49 par. 4, Art. 3 (the part on equality and inviolability of property), Art. 14 par. 1 and 2 (the part on the prohibition of discrimination on grounds of property), Art. 16 and Art. 50. The Constitutional Court had determined Articles 3, 16, 49 par. 1 and 4 and Art. 50 par. 2 as relevant for evaluating the compliance of the squeeze-out regulations of Companies Act with the Constitution. When answering the petitioners statements, the Constitutional Court started from the legal nature of the joint stock company and the principle of the equal position of the shareholders. Concerning the principle of the equal position of the shareholders, the Constitutional Court had pointed out that the minority shareholder, in relation to his or her share value, has exclusively property rights (imovinsko pravo) in company but not the right to manage the company (pravo upravljanja) with the only exception being the action to demand a declaration of the decision of the general meeting null and void in front of the court. The Constitutional Court stressed that legal position of the major shareholder to be differentiated from that of the minority shareholders. According to the Constitutional Court, determining differences in the rights to transfer sharesis not in conflict with the rule of law. The Constitutional Court holds the disputed standards do not imply the discrimination of the minority shareholders, since the legitimate purpose of such norms is the regulation of the capital market, indisputably in the interest of the Republic of Croatia and not attainable by means that would influence the shareholders property rights in a less restrictive manner. Further on, the Constitutional Court has pointed out that the criteria prescribed by the Companies Act enable the major shareholder to stimulate and enhance the companys inner structure, protecting the minority shareholders from potential exploitation. Legally binding conditions protect the major shareholder from the potential manipulation from the minority shareholders as well. The Constitutional Court has declared that the major shareholder should be given the right to acquire the remaining shares provided that the minority shareholders are not injured. Furthermore, the Court pointed out that law binding criteria according to which the minority shareholders are provided with adequate severance pay in cash are not in contradiction to the relevant regulations of the Constitution, the principal of the rule of law and demands set by the protection of business and market freedom under the Constitution. The Constitutional Court determined the regulations under the Companies Act guarantee greater legal certainty to minority shareholders and their protection in regards to potential actions of the major shareholder which might, although legitimate, harm and weaken or completely annul the property rights of the minority shareholders. The decision of the Constitutional Court was rendered with dissenting opinion stating that the provision of the Art. 49 par. 4 of the Constitution of the Republic of Croatia is the fundamental and exclusively relevant in respect reviewing the constitutionality of the squeeze out Companies Acts provisions. It is explicitly stated that the fact that the disputed provisions under the Companies Act and the Act on Amendments to the Companies Act had weakened or, deprived of the rights of the shareholders gained through the investment of the capital is undoubted and, as such, should have been revoked based on Art. 49 par. 4 of the Constitution. It is to be noted that the constitutionality of squeeze-out was examined and repeatedly confirmed in German court practices starting from the early 60s case Feldmhle. The German Federal Constitutional Court confirmed its constitutionality. In its decision the Court stated that the property right over a share is not a mere possession of an object; rather, its fundamental nature is expressed in capital participation in the company. The Court confirmed possibility of limitations imposed on the property rights of minor shareholders, by major shareholders. It meant that squeeze-out of minor shareholders was possible, whenever approved by the major of shareholders. The Court also examined the principle of equality and stated that the majority principle does not violate this principle. In the courts opinion the difference between the minority and majority rights is derived from the company's interests and that is why it does not infringe the constitution. In the same tune the German Federal Constitutional Court has ruled on the constitutionality of squeeze-out in DAT/Altana case. The Court emphasized that transferring the minority shareholders shares is about the restrictions imposed on the private property - introduced for the protection of general well-being that should be given the advantage over the interests of the minority shareholders to maintain the property rights of their rights in the joint stock company, with regards to the necessity to develop and stimulate the business initiative.  Another decision of the German Federal Constitutional Court concerning the squeeze-out was taken in Moto-Meter case. In Moto-Meter beneficial owner holding 99% made the offer to 1% minority shareholders to pay an amount slightly above an estimate of an expert had previously established. The major shareholder attempted to buy the minority's shares and then to dissolve Moto-Meter. Minority shareholders file an action to civil court to annul the majority's decision which failed. The minority shareholders then contested that squeeze-out violated Art. 14 of the German Constitution. Despite this fact, the Court concluded that the Moto-Meter minority shareholder could not claim the loss of his membership as the basis of an objection to the squeeze-out. The Court said that Art. 14 does not protect against the loss of membership, which results from the exclusion from the corporation. The Court concluded that the majority's right to squeeze-out the minority is in compliance with the Art. 14 of the German Constitution, as long as certain protections of the minority's interests are guaranteed. The Court emphasized that the exclusion of minority shareholders does not raise constitutional difficulties as long as they are compensated adequately. 5. Squeeze-out in the ECHR / ECtHR case law The European Convention on Human Rights (ECHR) provides in Article 1 of Protocol No. 1 Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contribution or penalties. Article 1 of Protocol No. 1 speaks of possessions and of property, but it does not contain a definition of these terms. In order to give an answer to whether the regulation in question is applicable to squeeze-out processes, one should start at interpreting the term possession. In the judicial practice of the European Court for Human Rights (ECtHR) the concept of possession is very broadly interpreted. In the Marckx case, the ECtHR recognizes that in fact means the right to property. But the protection of Art. 1 of Protocol No. 1 only applies when it is possible to lay claim to the relevant property. Art. 1 does not protect the right to acquire property. It is a matter of question whether the regulations of Article 1 of Protocol No. 1 to the ownership of shares in a company ECtHR ruled in Bramelid case are practiced or not. The case concerned two private individuals who owned shares in a large well-known department store in Stockholm, Sweden. A Company Act from 1977 provided that any company which owned more than 90% of the shares and voting rights in another company was entitled to squeeze-out the remaining minority shareholders, i.e. to compel them to sell their shares at the same price as would have been paid if it had purchased the shares through a public offer, or otherwise at a price fixed by arbitrators. The applicants argued that they had had to surrender their shares to the major shareholders at less than market value (the price had been fixed by arbitrators). The Commission considered whether the shares amounted to possessions within the meaning of Art. 1 of Protocol 1 and concluded that there was no doubt that the shares had economic value. The Commission therefore considered that the shares were possessions. On the question of which of the three rules of Article 1 applied, the Commission considered that the application of the Company Act to the shares of the minority shareholders did not fall within the second (deprivation) rule as the applicants had argued. The Commission observed that although there was no express reference to expropriation in Article 1, its wording showed clearly that the second rule was intended to refer to expropriation, i.e. the action whereby the State lays hands - or authorizes a third party to lay hands - on a particular piece of property for a purpose which is to serve the public interest. This interpretation was confirmed by the travaux prparatoires to Article 1. The Commission considered that the legislation complained of was something completely different. It concerned relations between private individuals. So the second sentence did not apply. As the legislation of the States Parties to the Convention shows, the legislation governing private law relations between individuals includes rules which determine the effects of these legal relations with respect to property and, in some cases, compel a person to surrender a possession to another (heritage provisions, execution, etc.). The Commission considered that this type of rule, which is essential in liberal society, cannot in principle be contrary to Article 1 of Protocol No. 1. However, the Commission considered it necessary to determine whether such law did not create such inequality that one person could be arbitrarily and unjustly deprived of property in favor of another. In the case before it, it found no such inequality. 6. Conclusion By squeezing the minority shareholders out of the company the major shareholder gains control over the company i.e. becomes the companys single shareholder. This enables him to pursue the companys business policies more effectively and cut down management costs to a regulatory minimum. The squeeze-out process provides the minority shareholder a severance pay which serves the purpose of a compensation for his or her rights lost with the shares. The provisions of the Takeover Act emphasized the need to protect the rights of the minority shareholders in a more balanced way since theyre provided with the complementary right by the sell-out. However, the minority shareholders can claim it only in short period after a takeover and at their own expenses. It should be noted that the compensation the minority shareholders squeezed out after a takeover receive cannot be lower than the price offered to them in the takeover bid which, surely, guarantees them at least the market price of the share. Also, minority shareholders who intend on exercising their sell-out right after the takeover process must be sure to submit their request on time because if they are overdue preclusion occurs, and they will not be able to realize the same right by means of the Companies Act since the same is not permitted by it. The authors hold that introducing the sell-out provisions to the Companies Act would release the tensions between the minority and major shareholder and overcome the resistance in practicing this right. Introducing the sell-out right would also ensure the major shareholder ready at all times to meet such requests since he or she, and not the company, is the one obliged to pay out the shareholders. Based on research that is presented in this paper, there are some considerable differences in the way the squeeze-out right is regulated under Companies Act and the Takeover Act need to be stressed. These differences lie in many aspects of the process and are of significant importance. There are differences in determining companies to fall under the provisions of the Companies Act and the Takeover Act, ways of defining the threshold by means of which the major shareholder gains the right to squeeze-out the minority shareholders from the company, shares transferrable to the major shareholder, carrying out the process of share transfer, as well as the moment the shares are to be transferred onto the major shareholder. Major differences lie in the legislators stand on determining the adequate severance pay (Companies Act), and, fair price (Takeover Act), respectively, as well as its judicial review. By the Companies Act, the major shareholder alone sets the amount of the adequate severance pay, and an expert appointed by the Court reviews its adequacy. For the major shareholder, these present far more favorable terms than those of defining fair price under the Takeover Act. We find that at least for the listed companies Companies Act should apply market price criterion instead of severance pay. The reviewed commercial courts case law shows that the discontented minority shareholders have very often succeeded in invalidating the adequacy of the severance pay and obtaining its increase. They have, however, rarely been effective in annulling the squeeze-out decision brought by the general meeting. In some cases, this was made possible due to deficiencies in convening the general meeting, while in others the Courts rejected the request for annulment of the general meetings decision substantiated on the allegation that major shareholder with its voting at the general meeting had tried to acquire a benefit for him or for the other shareholder at the companys or other shareholders expense. Regardless of the controversies and dissenting opinions in corporate and court practices, the Constitutional Court of the Republic of Croatia reaffirmed constitutionality of the squeeze out right. This goes along with the case law of the German Constitutional Court, also reviewed in the paper. In the same vein - ECtHR case law had spoken in favor of the legitimacy of the squeeze out - although arriving to it by interpreting the term possession, and bringing it to same outcome.  Available at  HYPERLINK "http://www.skdd.hr/portal/f?p=100:41:5898017165831405::NO:RP" http://www.skdd.hr/portal/f?p=100:41:5898017165831405::NO:RP::  Companies Act, Official Gazette Nos. 111/93, 34/99, 121/99, 52/00, 118/03, 107/07, 146/08, 137/09.  Act on the Takeover of Joint Stock Companies, Official Gazette Nos. 109/07, 36/09.  The stated provisions were adopted by the Croatian Parliament in 2003 and were entered into force on January 1, 2004. These provisions were amended with a revised Companies Act from 2009.  In Croatian law the principle of simple majority is adopted in Art. 290. of the Companies Act.  Art. 300.g of the Companies Act.  Barbi, Jakaa, Pravo druatava, Knjiga druga, Druatva kapitala, (Company Law, Book Two, Corporations), Organizator, Zagreb, 2005, p. 310., where he states that if a share has a market price, the same should be considered the lower limit of its value in regards to which the severance is to be set.  Markovinovi, Ivana, Squeez out (prijenos dionica manjinskih dioni ara), Pravo i porezi, No. 7, 2007, p. 39.  Ivekovi, Branimir, Squeeze-out  prijenos dionica manjinskih dioni ara (Squeeze-out  transfer of the minority shareholders shares), Pravo i porezi, No. 11, 2004, p. 51.  Barbi, Jakaa, op. cit. p. 309., states he or she might do it in spoken manner or by means of a concludent action, but still recommends to insist upon a written form of submitting a request for the convocation of a general meeting.  The stated consent can be required by means of a company s charter or the general meeting s decision.  High Commercial Court, The Republic of Croatia, Judgment of January 19, 2005, No. P~-7584/04.  On the unobstructed insight, the shareholders are to be given: the general meetings proposition on the share transfer, annual financial reports on the company state for the last three years, the major shareholders report, experts report to the general meeting on the adequacy of the severance pay. The stated files are to be made available at the general meeting.  Art. 300.j par. 1 of the Companies Act states the report should be enclosed with a record from the general meetings with the decision on the share transfer, as well as either the original insets to the decision or a certified copy of the same.  A revised Companies Act from 2009 added a provision on the data that is to be entered into the court register if by recording the decision of the general meeting on the share transfer, all companys shares are acquired by the same shareholder. In that case, the company is obliged to supplement the request for decision entry with a request to enter the data on the company with a single shareholder.  Barbi, Jakaa, op. cit. p. 315., stresses the fact that the obligation to do so lies with the bank as well.  Markovinovi, Ivana, op. cit. p. 41.  See for instance: Zagreb Stock Exchange, Meimurska Banka d.d.  delisting,  HYPERLINK "http://zse.hr/userdocsimages/novosti/QTRLheoXeFjhjIobhSBfYg==.pdf" http://zse.hr/userdocsimages/novosti/QTRLheoXeFjhjIobhSBfYg==.pdf, July 29, 2009., Zagreb Stock Exchange, Societe Generale Splitska banka d.d. delisting,  HYPERLINK "http://zse.hr/userdocsimages/novosti/z5XnSPua7UqFGtVOKLTHLQ==.pdf" http://zse.hr/userdocsimages/novosti/z5XnSPua7UqFGtVOKLTHLQ==.pdf, July 29, 2009  Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids, OJ L 142, 30/4/2004, p. 12-23.  The Directive on Takeover Bids was implemented into Croatian law in 2007 by the Takeover Act (Official Gazette No. 109/07). For historical overview of takeovers in Croatian law see more at Antonija Zubovi, Stjecanje glasa ke kontrole nad uvratenim druatvom (doktorska disertacija) (Acquisition of Voting Control of a Listed Company, doctoral dissertation), Faculty of Law University of Zagreb, 2012, p. 41-43.  Capital Market Act, Official Gazette Nos. 88/08, 146/08, 74/09.  It shall be considered that joint stock company has more than 100 shareholders if the company has had more than 100 shareholders at the last day of three subsequent months.  As well as a joint stock company with its registered office in another European Economic Area country, the voting shares of which are admitted to trading on a regulated market in a European Economic Area country, in terms of Article 4, paragraph 1, item 14 of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ L 145, p. 1).  According to Art. 114. of the Securities Market Act (Official Gazette Nos. 84/02, 138/06) public joint stock companies were obliged to list their shares to trading at a regulated market. The Act determined the public joint stock companies as those that fulfill one of the following criteria: a) they issue shares in a public offering, or b) they have more than 100 shareholders, and their share capital is at least 30.000.000,00 HRK. This provision was amended by the Capital Market Act.  Art. 45 par. 9 of the Takeover Act.  Acting in concert is explicitly regulated under Art. 5-7 of the Takeover Act.  Unlike the Takeover Act, the Companies Act states the companies own shares should be deducted from the share capital while determining whether the major shareholder has shares referring to at least 95% of the companys share capital.  Referring to a deadline for acquiring these rights, the Takeover Act provisions are entirely in accordance with the provisions of the Directive.  The Directive does not stipulate the provision for the fair price to be determined by an independent expert as was the case in the proposal for the Directive. Proposal for a Directive of the European Parliament and Council on Takeover Bids of 2 October 2002 COM (2002) 534 final.  Following a voluntary bid the consideration offered in the bid shall be presumed to be fair where, through acceptance of the bid, the offeror has acquired securities representing not less than 90% of the capital carrying voting rights comprised in the bid.  Following a mandatory bid, the consideration offered in the bid shall be presumed to be fair.  The price in the takeover bid is regulated under Art. 16 of the Takeover Act.  In accordance with Art. 10 par. 3 of the Takeover Act, upon the publication of the notification the obligation to announce a takeover bid shall be incurred for the person who intends to perform a takeover, under the conditions and in the manner determined by this Act. Therefore, rules on a mandatory takeover bid as well as rules concerning the price shall be applied in the takeover process. It is on these premises that two differentiating presumptions of a fair price are redundant in the Republic of Croatia.  In accordance with Art. 2 par. 1 pt. 1 of the Takeover Act the depositary shall mean either the Central Depository and Clearing Company or a credit institution with its registered office in the Republic of Croatia.  For sell-out provisions in the Directive on Takeover Bids see more at Burkart, Mike, Panunzi, Fausto, Mandatory Bids, Squeeze out and the Dynamics of The Tender Offer Process, Law Working Paper No. 10/2003, June 2003, available at  HYPERLINK "http://ssrn.com/abstract=420940" http://ssrn.com/abstract=420940 and Papadopoulos, Thomas, The mandatory provisions of the EU Takeover Bid Directive and their deficiencies, Law and Financial Markets Review, November 2007, p. 530-531.  In German law, this process is called Spruchstellenverfahren. More on the issue at Elsland, Silvia, Weber, Martin, Squeeze-outs in Germany: Determinants of the Announcement Effects, available at  HYPERLINK "http://www.uni-tuebingen.de/dgf/program/CPaper137.pdf" http://www.uni-tuebingen.de/dgf/program/CPaper137.pdf (visited 17/7/2012).  In its decision No. P~-1818/07-4 from September 5, 2007, the High Commercial Court had stated:  Even if such a complaint was to be filed on the grounds of inadequate severance pay, the Court would be obliged to reject it.  Decision of the High Commercial Court No. P~-3119/08-3 from May 27, 2008, available at  HYPERLINK "http://www.sudacka-mreza.hr/vts-odluke.aspx?Search=&Search2=&Court=---&Court2=---&Type=---&Type2=---&Type3=&Type4=---&Type5=&Typedz1=---&Typedz2=---&O1=P~&O2=3119&O3=08&O4=3&P1=&ShowID=47516" http://www.sudacka-mreza.hr/vts-odluke.aspx?Search=&Search2=&Court=---&Court2=---&Type=---&Type2=---&Type3=&Type4=---&Type5=&Typedz1=---&Typedz2=---&O1=P~&O2=3119&O3=08&O4=3&P1=&ShowID=47516  Decision of the High Commercial Court No. P~-3737/08-3 from June 17, 2008 available at  HYPERLINK "http://www.sudacka-mreza.hr/vts-odluke.aspx?Search=&Search2=&Court=---&Court2=---&Type=---&Type2=---&Type3=&Type4=---&Type5=&Typedz1=---&Typedz2=---&O1=P~&O2=3737&O3=08&O4=3&P1=&ShowID=47967" http://www.sudacka-mreza.hr/vts-odluke.aspx?Search=&Search2=&Court=---&Court2=---&Type=---&Type2=---&Type3=&Type4=---&Type5=&Typedz1=---&Typedz2=---&O1=P~&O2=3737&O3=08&O4=3&P1=&ShowID=47967  Decision of the Constitutional Court of the Republic of Croatia No. U-III-3693/2007 from May 6, 2010, available at  HYPERLINK "http://sljeme.usud.hr/usud/praksaw.nsf/0/C12570D30061CE53C125771B003D2EE8?OpenDocument" http://sljeme.usud.hr/usud/praksaw.nsf/0/C12570D30061CE53C125771B003D2EE8?OpenDocument  Decision of the High Commercial Court No. P~-6588/05-4 from March 29, 2007, available at  HYPERLINK "http://www.sudacka-mreza.hr/vts-odluke.aspx?Search=&Search2=&Court=---&Court2=---&Type=---&Type2=---&Type3=&Type4=---&Type5=&Typedz1=---&Typedz2=---&O1=P~&O2=6588&O3=05&O4=4&P1=&ShowID=36277" http://www.sudacka-mreza.hr/vts-odluke.aspx?Search=&Search2=&Court=---&Court2=---&Type=---&Type2=---&Type3=&Type4=---&Type5=&Typedz1=---&Typedz2=---&O1=P~&O2=6588&O3=05&O4=4&P1=&ShowID=36277  The squeeze-out was initiated by the major shareholder at SIEMENS AG Osterreich. Upon his request, an exceptional general meeting was convened and held April 7, 2004. The general meeting had reached a decision on a squeeze-out with severance pay out at 292,92 HRK per share. The minority shareholders couldnt accept the fact that they were being squeezed out contrary to their will and at such a low severance pay so they filed a request for a constitutionality review of Art. 132, Sec 5.b Act on Amendments to the Companies Act (Official Gazette No. 118/03). Decision of the Constitutional Court of the Republic of Croatia No. U-I-4120/2003, U-I-4237/2003, U-I-3099/2004, U-I-29/2005, U-I-4056/2006 from February 21, 2007, published in Official Gazette No. 36/07. The minority shareholders have, in addition, filed an action to annul the general meetings decision on the squeeze-out due to procedural deficiencies made during the convening of the general meeting. The Commercial Court in Zagreb had overruled their action, whereas the High Commercial Court of the Republic of Croatia, acting upon the minority shareholders appeal, granted the same and redirected the process onto the Court of First Instance for a new trial. Acting in accordance with the instructions from the High Commercial Court of the Republic of Croatia, the Commercial Court in Zagreb had reached a decision that stated the decision of the general meeting on the squeeze-out from April 7, 2004 was be made null. See the decision of the High Commercial Court of the Republic of Croatia No. P~-6487/04-8.  The part where the rule of law is determined as one of the highest values of the constitutional order in the Republic of Croatia and groundwork for interpreting the Constitution.  Art. 16 Constitution of the Republic of Croatia states: Freedoms and rights may only be curtailed by law in order to protect the freedoms and rights of others, the legal order, and public morals and health. Any restriction of freedoms or rights shall be proportionate to the nature of the need to do so in each individual case.  Art. 49 par. 1 Constitution of the Republic of Croatia states: Free enterprise and free markets shall form the foundation of the economic system of the Republic of Croatia.  z12OPWno7Lt~qqdWhJR|hJG@B*phhJR|hJG@B*phhJR|hJG@B*phhJR|hJG@B*phhJR|hJG@B*phhJR|hJGH*hJR|hJGB*phjhJR|hJG0JUhJR|hJG6 hJR|hJGhJR|hJG5hJR|hJG5B*ph)hJR|hJGB*CJOJQJ^JaJphhJR|hJG56CJ\]"X S|} $dha$gdJG$dh`a$gdJG$ & Fdh^`a$gdJG$dh^a$gdJG$dh^a$gdJG$a$gdJGVW- $%(X) -5.Y1l369&<=====$ dh-D1$7$8$H$M a$gdJG $dha$gdJG$dh`a$gdJG2Z>e - a!b!\#]# $ $$F$f$o$$**9*++- ---1.2.002244ƾڱ͗ƊƊƊ{nnfƊƾƊƊƊƊƊhJR|hJG6hJR|hJGB*\phhJR|hJG@ B*\phjhJR|hJG0JUhJR|hJG@B*phhJR|hJG@B*phhJR|hJG@ B*phhJR|hJG5 hJR|hJGhJR|hJG@B*phhJR|hJGB*phhJR|hJG@B*phhJR|hJG@B*ph(44 55b7j77799"<#<<<====.>M>N>A?B?AA.>H?CDMH2IMOOQSTVVWc[=\9^ `ac$dh7$8$H$`a$gdJG$dh`a$gdJG $dha$gdJG$dh^a$gdJGccccejo$pvvbz\~]~~~*ߌklLMz{ݜ$dh^a$gdJG$dh`a$gdJG $dha$gdJG\c]cccmdndekflf8nnn ovsssuvvxxVzWzzz}}}]~~>EJK]^bcst|уՃ΄߄)眏hJR|hJGB*\phhJR|hJG@ B*\phhJR|hJGh7hJR|hJG6jhJR|hJG0JU"jhJR|hJG0JB*UphhJR|hJGB*ph hJR|hJGhJR|hJG5hJR|hJG5\8)19Mmnr!]vSۋތ,-0i  ̓[\]•̕ҕӕו~Җܖ՗VsܘݘMzҚݜŽŽŽŽţŽŽţţŽŽŽţŽţŽţŽŽŒŽŽhJR|hJG5hJR|hJG0JjhJR|hJG0JUhJR|hJG6B*phhJR|hJG6 hJR|hJGhJR|hJGB*\phhJR|hJGB*phhJR|hJG0JB*ph"""hJR|hJG0J5B*ph"""9!XYS]+,ޥav/>0ߺFGH𼯨jh h/BUjh h/BU h h/Bjh h/B0JU hJR|huhJR|hJG6B*phhJR|hJGB*phhJR|hJG5jhJR|hJG0JU hJR|hJGhJR|hJG67ݜţ@./=> 4Ce$a$gdJGgdJG $dha$gdJGgdJG$dh`a$gdJGHCDPZef ȾVX 68bBHfhhj:<pqhi$&崩h/BCJaJh h/BCJaJ!jh h/B0JCJUaJh !h/B6 h !h/Bh/Bjh h/B0JU h h/Bjh h/BUh h/B0J?V6h:ph$u# 7$8$H$gdJG$..]a$gdJG$a$gdJG$a$gdJGgdJG012st!"#deuv~,.xz#$jh h/B0JUh2h/B h$8h/Bjh$8h/B0JUh h/BCJaJ!jh h/B0JCJUaJjh h/BUh h/B0Jjh h/BUjh h/BU h h/B4!"qruvNO9:ghi2345ϻ|jO5jh h/B0JCJOJQJU^JaJmH sH #h h/B5B*CJ\aJphfffh h/BCJ\aJh h/B0JCJaJ,jh h/BB*CJUaJphh h/BB*CJaJph&jh h/BB*CJUaJphh h/BCJaJ!jh h/B0JCJUaJ h h/Bjh h/B0JU!quN4@! !"#<&_'L(K**$a$gdJGgdJG$a$gdJG $7$8$H$a$gdJG$a$gdJG5\rz|~&(*bdƳƝxpxexWeNexxexh h/B0Jjh h/BUjh h/BUh h/B6 h h/Bjh h/B0JU h h/B0JCJaJmH sH +jh h/BCJUaJmH sH %jh h/BCJUaJmH sH h h/BCJaJmH sH +h h/B6CJOJQJ^JaJmH sH (h h/BCJOJQJ^JaJmH sH |~ln68:<>@@B!"bc ? ֻ֭֩֘ydbU)h h/B6B*fHphq h h/B6h h/B6CJaJh h/BCJaJ!jh h/B0JCJUaJh/Bjh h/BUj/h h/BUjh h/B0JU h h/Bh h/B0Jjh h/BUj h h/BU&Art. 49 par. 4 Constitution of the Republic of Croatia states: The rights acquired through the investment of capital shall not be infringed by law or any other legal act.  Art. 50 par. 2 Constitution of the Republic of Croatia states: Free enterprise and property rights may be exceptionally restricted by law for the purposes of protecting the interests and security of the Republic of Croatia  A dissenting opinion from March 14, 2007, given by Judge Emilija Raji, published in Official Gazette No. 36/07.  The German Federal Constitutional Court, Judgment of August the 7th, 1962, Feldmhle Fall, BVerfG, 1 BvL 16/60, NJW 1962, Volume 37, page 1667 and fol.  Nozadze, Ani, Comparative analysis of EU, German and Georgian regulations on squeeze-out, Budapest: CEU, Budapest College, 2011, available at  HYPERLINK "http://www.etd.ceu.hu/2011/nozadze_ani.pdf" http://www.etd.ceu.hu/2011/nozadze_ani.pdf (visited 15/7/2012), Babak, Anton, Adoption of Squeeze-Out and Sell-Out Rights of Shareholders in Ukraine on the Basis of a Comparison of EU, Germany and USA, Budapest: CEU, Budapest College, 2012, available at  HYPERLINK "http://www.etd.ceu.hu/2012/babak_anton.pdf" http://www.etd.ceu.hu/2012/babak_anton.pdf (visited 15/7/2012)  The German Federal Constitutional Court, Judgment of 27th April 1999, DAT/Altana, BVerfG, 1 BvR 1613/94, available at  HYPERLINK "http://www.bverfg.de/en/decisions/rs19990427_1bvr161394.html" \t "_blank" http://www.bverfg.de/en/decisions/rs19990427_1bvr161394.html (visited 16/7/2012)  Ivekovi, Branimir, op. cit. p. 50.  The German Federal Constitutional Court, Judgment of 23rd August 2000, Moto-Meter, BVerfG, 1 BvR 68/95, available at  HYPERLINK "http://www.bverfg.de/entscheidungen/rk20000823_1bvr006895.html" \t "_blank" http://www.bverfg.de/entscheidungen/rk20000823_1bvr006895.html (visited 16/7/2012)  An expert had a contract with the major shareholder.  Art. 14 of the German Constitution provides: 1. Property and the right of inheritance shall be guaranteed. Their content and limits shall be defined by the laws. 2. Property entails obligations. Its use shall also serve the public good. 3. Expropriation shall only be permissible for the public good. It may only be ordered by or pursuant to a law that determines the nature and extent of compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected. In case of dispute respecting the amount of compensation, recourse may be had to the ordinary courts.  Zumbansen, Peer, German Corporate Law in Constitutional Perspective: The Squeeze-Out Reviewed, German Law Journal, Vol. 2, No. 1-2, February, 2001, 8.  By contrast, the Inter-American Court of Human Rights has adopted a definition of term property as contained in Art. 21 of the Inter-American Convention. Kriebaum, Ursula, Schreuer, Christoph, The Concept of Property in Human Rights Law and International Investment Law, p. 2., available at  HYPERLINK "http://www.univie.ac.at/intlaw/concept_property.pdf" http://www.univie.ac.at/intlaw/concept_property.pdf  ECtHR, Judgment of 13th June 1979, Marckx v. Belgium (A31 (1979)).  ECtHR, Judgment of 12th October 1982, Bramelid and Malmstrm v. Sweden (Applications Nos. 8588/79 and 8589/79).  See more at Carss-Frisk, Monica, The right to property, A guide to the implementation of Article 1 of Protocol No. 1 to the European Convention on Human Rights, Human Rights Handbooks, No. 4, November, 2001, p. 10-11, Bartl, Marija, Czech Regulation of Squeeze Out in Comparative Perspective, Central European University, 2007, p. 47, available at  HYPERLINK "http://www.etd.ceu.hu/2008/bartl_marija.pdf" http://www.etd.ceu.hu/2008/bartl_marija.pdf  The conditions for application of Article 1 were defined in the Sporrong and Lnnroth case (Judgment of 23rd September 1982). As interpreted by the Court, the articles three sentences embody three rules for protection. The first is general, and states the principle of peaceful enjoyment of property. The second covers deprivation of possessions and subjects it to certain conditions. The third recognizes that States are entitled to control the use of property? @      !!!""T#p###$$$$$$$%%%%%&&'&<&=&&&&& ' 'H'I'_'(L(N(((:)<)))5*6*K*L*o*t**** - -εìΞìììΚh/Bjh h/BUh h/B0Jjh h/BUjh h/BU h h/Bjh h/B0JU)h h/B6B*fHphq h h/B6<* --I//01=R>S>U>V>X>Y>[>\>^>_>h>i>j>u>v>w>x>h]hgdJG &`#$gdJG $7$8$H$a$gdJG$a$gdJG ---. ...///F/G/I/J/n//////00^1_111111111 2 2!2kY#h h/BCJOJQJ]^JaJ&h h/B6CJOJQJ]^JaJ h h/BCJOJQJ^JaJh h/BCJaJ!jh h/B0JCJUaJjph h/BUh h/B6h h/B0Jjh h/BUjh h/BUh2h/B6jh h/B0JU h h/B" in accordance with the general interest, by enforcing such laws as they deem necessary for the purpose. The last two rules must be interpreted in the light of the general principle laid down in the first. Van Der Elst, Christoph, Van Den Steen, en Lientje, Opportunities in the M&A aftermarket: squeezing out and selling out, Working Paper Series WP 2006-12, September 2006, available at  HYPERLINK "http://ssrn.com/abstract=933609" http://ssrn.com/abstract=933609  ECtHR, Judgment of 12th October 1982, Bramelid and Malmstrm v. Sweden (Applications Nos. 8588/79 and 8589/79)., p. 82.     PAGE  PAGE 2 !23<==========>R>S>T>V>W>Y>Z>\>]>_>`>f>g>h>j>k>q>r>s>t>u>w>x>y>~w hJR|huh0JmHnHuh/B h/B0Jjh/B0JUjhUhh h/B6 h h/Bjh h/B0JUh h/B0JCJaJ#jh h/BCJUaJjh h/BCJUaJUh h/BCJaJ%x>y>,1h. 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