Shareholders’ Information Rights
Shareholders have the right to inspect the business report and the audit report of the company, to ask questions to the board of directors at the annual general meeting and, under certain conditions, to inspect other documents of the company by initiating a special audit.
Restructuring Measures Involving Shareholders
Private restructuring measures, i.e. measures outside of statutory insolvency proceedings, represent the gentlest form of restructuring since these measures neither interrupt nor adversely affect the operating activities of a company. Thus, this type of restructuring ideally preserves the value of the company. Shareholders can implement such (private) restructuring measures by increasing and/or reducing the company’s capital and/or providing contributions to the company without consideration.
Such private restructuring measures cannot be imposed on shareholders who exercise all or the majority of the voting rights but will have to be approved by the shareholders at a general meeting reaching a majority or, if a qualified quorum is required, two thirds of the votes presented at the meeting.
Composition Proceeding / Composition Agreement
A composition agreement will only be approved by the composition court if the performance offered to the creditors is in reasonable proportion to the debtor's possibilities. If the debtor is a corporation, the shareholders must make an appropriate contribution to the restructuring efforts. This means that the ordinary composition agreement may not only provide for contributions by creditors but shall also provide for adequate contributions by shareholders who benefit from the restructuring. Such measures are, in particular, contributions (cash or assets) into the capital reserves of the company or the waiver(s) of shareholder loan(s). The contribution of the shareholders may also consist in their agreeing to a capital increase by waiving their subscription rights in favour of the creditors or third party investors, which leads to a dilution of the shares of the existing shareholders, if such a capital increase is part of the composition agreement.