Band 2, Heft 4

The debate over the future of legal capital in Europe has begun. Inspired by the American system centered on the solvency test and by the forthcoming changes in accounting rules, Jonathan Rickford and others have launched an attack on the Second Directive. The European Union has recently commissioned a “feasibility study”. However, resistance is still strong, as creditor protection achieved by legal capital rules has still not been proved less efficient. Working groups have been constituted and a considerable amount of research is being carried out. This article provides an overview over the current state of the debate and tries to work out a compromise between attack and defence.

The recent French June 24, 2004 Ordinance significantly reforms the regulation on securities issued by certain commercial companies (Sociétés anonymes or joint-stock companies, Sociétés en commandite par actions or partnerships limited by shares, Sociétés par actions simplifiées or simplified joint-stock companies). It establishes a new general type of security called action de préférence or preferred share. This new type of security replaces the former different types of priority shares that could be established before with one single and more flexible regime. Besides, the Ordinance allows the suppression of voting rights in joint-stock companies, which French lawmakers had been reluctant to allow so far. By doing so, the French lawmakers offer more freedom and have reduced the importance of the equality among shareholders principle which was the usual keystone of French corporate law. Besides, once again, French corporate law get its inspiration from the United States. However, the French approach to preferred shares keeps some specificities, both good or bad, compared to its American model.

The Italian Supreme Court ( Corte di Cassazione ) has issued an important decision on companies’ freedom of establishment in the European Union (EU) and on jurisdiction over insolvency proceedings. It was a typical forum-shopping case in insolvency situations, in which a company decides to shift its registered office abroad before a court from its original country declares the insolvency. The Cassazione did not apply EC-Regulation 1346/2000 on crossborder insolvency, but declared the company as liquidated because of the transfer of the registered office. This solution leaves many questions unclear, both under EC-freedom of establishment and under jurisdiction rules for cross-border insolvency.