1. Group interest in Europe Martin Winner

2. SEITE 2 OVERVIEW  decision in the interest of the group not necessarily in the interest of the subsidiary  Cash pool & intra-group loans  Division of markets between subsidiaries  two issues:  May management of sub take such measures? = Can they follow instructions, which are in the interest of the group if not of the subsidiary?  civil / criminal liability  Must management of sub follow instruction by parent? SEITE 2

3. SEITE 3 NATIONAL DIMENSION  Group 1: lenient approach  France, Italy, Belgium  general economic quid pro quo sufficient  Group 2: strict protection of subsidiary  Germany, Austria  prompt compensation necessary  Group 3: Where is the problem?  UK, Ireland & nordic countries  tradition of shareholders as ultimate decision takers  other mechanisms for creditor / investor protection,.e.g. unfair prejudice or qrongful trading  evolution rather towards leniency SEITE 3

4. SEITE 4 ROZENBLUM TEST IN FRANCE  purpose: „group defence“ for the subsidiary‘s management  against prosecution for abuse of corporate assets  right to give directions is not an issue  conditions  group with capital links between companies  business integration with coherent group policy and common interest (no ad hoc-operation)  economic quid pro quo (flexible, also non-monetary, also future = expectations sufficient)  no risk of bankruptcy for the subsidiary SEITE 4

5. SEITE 5 EUROPEAN GROUP LAW AS ENABLING LAW?  focus on parent company  shift of focus from subsidiary and its creditors / minority shareholders  foster formation and management of cross-border groups  reduce cost of cross-border activities via groups  harmonize rules on group interest  easing management by recognizing group interest  protection of creditors / shareholders secondary SEITE 5

6. SEITE 6 DISCUSSION IN EUROPE UNTIL 2012  1998: Forum Europaeum on Group Law (academia)  modified Rozenblum doctrine recommended  2002: High Level Group of Company Law Experts (“Winter- group”)  allowing managers to implement a coordinated group policy  2011: Reflection Group on Future of EU Company Law  recommendation with yardstick for management of sub  2012: Consultation  rather favourable (if lukewarm) response  2012: Commission Action Plan on Company Law  initiative on recognition of group interest “2014” SEITE 6

7. SEITE 7 PRUDENTIAL REGULATION  CRD IV 2013/36/EU  parent company responsible for organization and management of bank group  effective control of subsidiaries, esp. from risk management perspective  BRRD  group financial support agreement in case of rapidly deteriorating financial situation of one group member  interest in solvency of the group  prudential regulation & company law? SEITE 7

8. SEITE 8 ACADEMIA 2015  European Model Company Act 2015  no restatement, but toolbox for legislators  group interest a la Rozenblum recognized  Forum Europaeum on Company Groups 2015  „equilibrate the interests among the group companies, including the parent, in the long term“ = Rozenblum  more lenient regime for „service companies“, i.e. wholly-owned subs with auxiliary function, which must follow directions not causing insolvency  European Company Law Experts  spin-off of Winter-group  work on position paper on corporate groups SEITE 8

9. SEITE 9 COMISSION 2015  SUP: no substantial provision  Commission proposal: parent has right to instruct unless violation of national law  deleted in Council‘s General Approach  currently in trilogue  Informal Company Law Experts Group (ICLEG)  advisory group to commission  preparing policy paper on group interest  intense discussions, to be expected 2016 SEITE 9

10. SEITE 10 OPTIONS & DECISIONS  Regulation / Directive / Recommendation  cross-border groups / national groups  mandatory law / opt-in via articles of association  private / public companies  wholly-owned subs / all subs / listed subs  protection mechanism for minority shareholders / for creditors SEITE 10

11. SEITE 11 OPTIONS & DECISIONS  interest of parent = interest of group  just recognize group interest / introduce a fully-fledged test e.g. along Rozenblum principles  Which factors? Esp. vague expectations as to future compensation sufficient?  exclusion from liability / duty to follow instructions SEITE 11

12. DEPARTMENT FOR BUSINESS, LABOUR AND SOCIAL SECURITY LAW Welthandelsplatz 1, Gebäude D3, 1. OG 1020 Vienna, Austria UNIV.PROF. DR. MARTIN WINNER T +43-1-313 36-4215 F +43-1-313 36-764 Martin.winner@wu.ac.at www.wu.ac.at SEITE 12Fußzeile