Preface

v

Contributors

xvii

Table of Cases

xxiii

Table of Legislation

xxvii

1.

Introduction / Ulf Bernitz

1

I.

EU LAW AND ECONOMIC PROTECTIONISM

2.

European Company and Financial Law: Observations on European Politics, Protectionism, and the Financial Crisis / Klaus J. Hopt

13

I.

The right balance between negative and positive harmonization in the European Union

15

1.

Positive and negative harmonization

15

2.

Pros and cons of harmonization by the Court of Justice

16

3.

Pros and cons of harmonization by the European Commission

18

II.

Different patterns of harmonization of company and financial law: Evolution and European politics

20

1.

State egoism, lobby interests, and compromise solutions: The examples of the Takeover Directive and the new European financial architecture

20

2.

Different patterns of harmonization in company and financial law

22

3.

Interaction of European company and financial law harmonization

24

III.

US and European company and financial law: Convergence, transplants, and path dependencies

25

1.

Company law

25

2.

Financial law

27

3.

Towards a better and more permanent transatlantic dialogue

28

IV.

Conclusion: Impacts of the financial crisis and the dangers of protectionism and under- and overregulation

29

3.

Is `Protectionism' a Useful Concept for Company Law and Foreign Investment Policy? An EU Perspective / Crispin Waymouth

32

I.

Introduction: `Protectionism' is the new black

32

II.

What is `protectionism' and is it a useful concept for company law?

35

1.

`What is protectionism'?

35

2.

Can it be applied meaningfully to company law?

36

3.

How should we look at company law and regulation instead?

39

III.

How do the EU and its Member States measure up?

44

1.

Do policies on investment meet the above criteria?

44

2.

Do policies on company law meet the criteria?

48

3.

How do we need to go forward?

51

IV.

Conclusion

52

4.

Protectionism, Capital Freedom, and the Internal Market / Jonathan Rickford

54

I.

Protectionism defined and located

55

1.

`Economic protectionism'

55

2.

Location

56

II.

Golden shares and Article 63 TFEU

57

1.

The scope of capital

57

2.

The prohibition

58

III.

First group of cases---powers reserved to the state under public law

59

IV.

Second group of cases---powers under private law

60

1.

BAA case

61

2.

The KPN case---state measure, disproportionality, and risk

63

V.

Recent jurisprudence---Volkswagen

67

1.

Impact

72

2.

Justifying state intervention

74

3.

Horizontal effect

76

VI.

State powers of corporate control---making sense of the golden shares cases

79

VII.

A coda---back to the drawing board? The capital/establishment boundary

81

1.

Baars

82

2.

Skatteverket v A and B

87

3.

Commission v Italy (2009)

88

VIII.

Exclusive application of Article 49---extended Member State immunity in third-country cases

90

IX.

Conclusion and proposal

91

1.

Conclusion

91

2.

Proposal

93

5.

When the State is the Owner---Some Further Comments on the Court of Justice `Golden Shares' Strategy / Andrea Biondi

95

I.

Introduction

95

II.

The golden shares acquis and the internal market

96

III.

The state as market participant---some lessons from state aid law

99

II.

TAKEOVERS AND MERGERS

6.

The Takeover Directive as a Protectionist Tool? / Emilie van de Walle de Ghelcke

105

I.

Introduction

105

II.

The function of the Board Neutrality Rule

107

1.

The redundancy argument

108

2.

The shareholder structure argument

117

3.

Evasion through pre-bid defences

124

III.

The choices created by the Directive

125

1.

Introduction

125

2.

Member State choices

125

3.

Company level choices

131

IV.

The choices made---Member States

135

1.

Transposition choices

135

2.

Comparison of pre- and post-transposition position

138

V.

The choices made---companies

145

1.

Opting into the BNR

145

2.

Taking up the reciprocity exception to the mandatory BNR

147

VI.

Conclusion

152

7.

Varieties of Corporate Governance and Reflexive Takeover Regulation / Andrew Johnston

161

I.

Introduction

161

II.

The problem of harmonizing takeover regulation

162

III.

The move to reflexive legislation

165

IV.

The danger of protectionsim

170

V.

Does European law favour CMEs over LMEs?

172

8.

Cross-Border Restructuring---Company Law between Treaty Freedom and State Protectionism / Jesper Lau Hansen

176

I.

Scope of chapter and observations on protectionism

176

II.

Protectionism in company law

178

III.

Where to expect protectionism

181

IV.

Where not to expect protectionism

186

V.

Conclusion

189

9.

Mechanisms of Ownership Control and the Issue of Disproportionate Distribution of Power / Ulf Bernitz

191

I.

The public policy element in European company law

191

II.

The Takeover Directive and the structure of company ownership

193

III.

Different European mechanisms of ownership control

196

IV.

The system of multiple voting rights in Nordic, particularly Swedish, company law

199

V.

Conclusions

203

III.

COMPANY LAW AND FORECLOSURE OF MARKETS

10.

Deviations from Ownership-Control Proportionality---Economic Protectionism Revisited / Wolf-Georg Ringe

209

I.

Introduction

209

II.

The one share/one vote debate and European solutions

210

1.

The High Level Group and Commission activity

211

2.

Court of Justice

213

3.

The academic debate

216

III.

The presence of CEMs in companies

222

1.

CEMs today

222

2.

Change

224

IV.

Who decides about change?

228

V.

The 2008/09 crisis and current developments

231

1.

Protection from SWFs

232

2.

CEMs to further sustainability

233

3.

Freedom of contract

236

4.

Assessment

237

VI.

Implications

238

VII.

Conclusion

240

11.

Deviations from Ownership-Control Proportionality---Private Benefits and the Bigger Picture / Arad Reisberg

241

I.

Introduction

241

II.

My approach

243

III.

Private benefits of control?

243

IV.

Changing business world?

246

V.

Finally: `Trends' rather than `changes'

248

12.

Sovereign Wealth Funds---Market Investors or `Imperialist Capitalists'? The European Response to Direct Investments by Non-EU State-Controlled Entities / Heike Schweitzer

250

I.

Introduction

250

II.

Sovereign Wealth Funds---the phenomenon and the questions it raises

253

1.

Defining SWFs

253

2.

Experiences with SWFs so far

255

3.

Concerns regarding the investment activities of SWFs and other foreign state-controlled entities

257

III.

The US reaction to foreign states' involvement in economic activities within the US

258

IV.

The legal framework of EU law on Member States' involvement in economic activities

261

1.

Do public undertakings really benefit from the protection of the free movement rules?

261

2.

Cross-border investments: freedom of establishment or free movement of capital?

262

V.

Foreign states' involvement in economic activities within the EU: what rules do we have? What rules do we need?

264

1.

Concerns regarding the involvement of foreign states in economic activities within the EU---the Commission's proposal for a `common European approach to Sovereign Wealth Funds'

264

2.

Entry controls for foreign investment at the Member State level---a brief survey

267

3.

The review of national entry controls for foreign investment and the free movement of capital: the application of Article 56 EC (Article 63 TFEU) and its relationship with Article 43 EC (Article 49 TFEU)

270

4.

The justification of restraints to the free movement of capital: A special regime for cross-border investments originating in non-EU states?

275

VI.

Conclusions

286

13.

Sovereign Wealth Funds: Neither Market Investors Nor `Imperialist Capitalists': A Response to Heike Schweitzer / Katharina Pistor

290

I.

Introduction

290

II.

The concept of control

292

III.

Are SWFs market investors?

294

IV.

The West's increasing dependence on SWFs

296

V.

The future of SWF investments

298

IV.

HOW TO OVERCOME ECONOMIC PROTECTIONISM?

14.

The European Model Company Act (EMCA)---A New Way Forward / Paul Kruger Andersen

303

I.

There is a need for alternative regulatory instruments

303

II.

The aims of the EMCA

304

III.

The European Model Act Group

305

IV.

Theory and methodology

306

1.

Legal theory on different legal tools for regulation

306

2.

Some fundamental problems and approaches

307

3.

Use of comparative method

308

4.

Use of law and economic theories

308

V.

Comments on the Act

309

VI.

Expected impacts and output of the project

309

VII.

Working plan and status

310

VIII.

The EMCA covers both private and public companies

312

IX.

The EMCA uses a one-law model

313

1.

Specific issues

313

X.

Formation of companies

314

XI.

Directors' duties

315

1.

One-tier and two-tier systems---or something in between

315

2.

Division of work of managing directors and supervisory boards

316

3.

May the same person be a managing director and a member of the supervisory board?

317

4.

Decision-making by the board

318

5.

General duties of directors

318

6.

To whom are the duties owed?

323

XII.

Some preliminary conclusions

324

15.

The Role of European Regulation and Model Acts in Company Law / Jennifer Payne

326

I.

Introduction

326

II.

EU regulation of company law

327

III.

The role of Model Company Acts

330

IV.

Conclusion

333

16.

How Does the Market React to the Societas Europaea? / Lars Hornuf

334

I.

Introduction

334

II.

Literature

337

III.

Data

339

IV.

Methodology

342

V.

Empirical findings

343

VI.

Assessing the present findings

344

VII.

Concluding remarks

346

Appendix

347

17.

Empirical Notes on the Societas Europaea / Jodie A Kirshner

349

I.

The event study: Technique and contributions

349

II.

Observation 1: Direction of competition?

351

III.

Observation 2: Interpreting co-determination results?

351

IV.

Observation 3: Effect of within-group restructurings?

352

V.

Observation 4: Additional stakeholders?

352

Index

355