Headnotes

to the judgment of the First Senate of 11 July 2012

– 1 BvR 3142/07 –

– 1 BvR 1569/08 –

1. The revocation of the admission of shares to trading on the regulated market upon application from the issuer does not in principle affect the area protected by the shareholder’s fundamental right to property (Article 14.1 of the Basic Law (Grundgesetz – GG)).

2. The requirement, by way of an overall analogy, of the ordinary courts that a company or its majority shareholder make a mandatory offer to buy the shares of the remaining shareholders if the company completely withdraws from the stock exchange and that such offer be subject to judicial review is within the constitutional limits which apply to the judicial development of the law (Article 2.1 in conjunction with Article 20.3 GG).

FEDERAL CONSTITUTIONAL COURT

– 1 BvR 3142/07 –

– 1 BvR 1569/08 –

IN THE NAME OF THE PEOPLE

in the proceedings
on the constitutional complaint

– 1 BvR 3142/07 –,

– 1 BvR 1569/08 –

the First Senate of the Federal Constitutional Court

sitting with the justices

Vice-President Kirchhof,

Gaier,

Eichberger,

Schluckebier,

Masing,

Paulus,

Baer, and

Britz

held on the basis of the oral hearing on 10 January 2012 as follows:

Judgment:

The constitutional complaints are rejected as unfounded.

G r o u n d s:

A.

The constitutional complaints relate to the revocation of the admission of shares to trading on what was previously the official market and what is now the regulated market upon the application of the issuer (what is known as voluntary or regular delisting).

I.

Companies are listed within the meaning of the law governing stock corporations if their shares are admitted to trading on a market which is regulated and supervised by officially recognised authorities, operates regularly and is accessible directly or indirectly to the public (§ 3.2 of the Stock Corporation Act (Aktiengesetz – AktG)). The admission or inclusion of shares for trading on the regulated market, which has replaced trading on the previous official market (§ 52.7 of the German Stock Exchange Act (Börsengesetz – BörsG)), requires a decision by the stock exchange’s management and is subject to the fulfilment of certain preconditions (authorisation of admission, § 32 BörsG). Admission or inclusion must, among other things, be applied for by the issuer. Admission to trading on the regulated market results in duties of disclosure, notification and co-operation on the part of the issuer and serves in the law governing stock corporations as a basis for special rules that only apply to stock exchange listed companies.

A company may completely withdraw from the stock exchange by delisting on all stock exchanges or partially withdraw by delisting on one or more stock exchanges, while maintaining its listing on the remaining stock exchanges; withdrawal may also be associated with a change to a listing in a separate segment known as the over-the-counter market, which is essentially regulated by the stock exchanges themselves. Over-the-counter trading is trading that in particular does not involve any state-regulated authorisation of admission for the traded instruments. The proper conduct of trading and completion of post-trade activities is guaranteed by the trading regulations and terms of business of the stock exchange operator (§ 48 BörsG). In order to be able to set up over-the-counter trading, the stock exchange requires a permit from the state exchange supervisory authority. Private-law principles apply to the trading itself. In this connection, a number of stock exchanges have fixed special standards which are less stringent than those of the regulated market, but which are distinguishable from the standards of ordinary over-the-counter markets in terms of their requirements and duties (“qualified over-the-counter markets”). Examples of qualified over-the-counter markets are the stock exchange segments “Entry Standard of the Open Market” of the Frankfurt Stock Exchange and “m:access” of the Munich Stock Exchange, which were opened in 2005. A company that has changed from the regulated market to a segment of the qualified over-the-counter market (also known as downgrading) may thereafter also withdraw from the qualified over-the-counter market. The respective operator of the qualified over-the-counter market segment regulates the requirements for the aforegoing. In addition, off-exchange trading of shares is not precluded.

The legislature has enacted express provisions under capital markets law to protect investors in the case of the revocation of the admission of their shares to trading on the regulated market resulting from an administrative act. § 39.2 BörsG provides that the management of the stock exchange may revoke admission upon application from the company where “the protection of investors does not stand in the way of the revocation”. The details of delisting must be set out in the respective stock exchange regulations, which are issued by the stock exchange and must be approved by the exchange supervisory authority. At company-law level, the Federal Court of Justice (Bundesgerichtshof – BGH), since its 2002 ruling in what is known as the Macrotron decision (Decisions of the Federal Court of Justice in Civil Matters (Entscheidungen des Bundesgerichtshofes in Zivilsachen – BGHZ 153, 47)), has required for withdrawal from the official market, which is now the regulated market of the stock exchange, a resolution adopted by the annual general meeting as well as a mandatory offer from the majority shareholder or the company to the minority shareholders; the Federal Court of Justice regards these requirements as being subject to judicial review in accordance with the provisions relating to valuation proceedings under company law (see now § 1 et seq. of the Valuation Proceedings Act (Spruchverfahrensgesetz – SpruchG)). According to the Federal Court of Justice, “the loss of the market” caused by the delisting results in significant economic disadvantages for the minority shareholders which cannot be compensated for by the shares’ inclusion in over-the-counter trading (see BGHZ 153, 47 <54 et seq.>). The ordinary courts have followed this case-law and in doing so relied on an overall analogy with the company-law rules which make provision for a mandatory offer that can be reviewed by the courts, for example, in the case of the conclusion of a control and profit transfer agreement, in the case of integration in another stock corporation, in the case of a squeeze-out of minority shareholders or in the case of a merger and in particular since 2007 in the case of a merger of what had been until to then a listed company with a non-listed company as well.

II.

1. The first complainant is the majority shareholder of M. AG (hereinafter referred to as: M.). In May 2004, it requested M.’s board of management to put an application for revocation of the company’s admission to trading on the stock exchange to a vote at the forthcoming annual general meeting. At the same time, in its capacity as majority shareholder it offered to purchase the other shareholders’ shares from them for a price of € 1.70 per share on the condition that the company’s delisting was successful. The company’s management board and supervisory board granted the majority shareholder’s application. In doing so, they based their decision on the following considerations: M. had sold its main business operations. The costs that would thereafter arise due to the listing on the stock exchange would be disproportionate to the company’s assets and results of operations and to the scope of its operations. In addition, trading in the shares on the stock exchange had been negligible in previous years. To the extent that there had been any trading, even the smallest buy or sell orders had been sufficient to trigger considerable jumps in the share price (see the electronic Federal Gazette (Elektronischer Bundesanzeiger ), Company Announcements, 21 May 2004, pp. 6-7). Following an appropriate resolution passed by M.’s annual general meeting of shareholders, the company’s admission to trading on what was at that time the official stock exchange market was revoked in October 2004 upon application from the company and its shares ceased to be listed at the end of December 2004. Some of the shareholders regarded the first complainant’s purchase offer as too low and applied to the Regional Court for the institution of valuation proceedings to determine the necessary compensation.

The Regional Court held in an interlocutory decision that the valuation proceedings were admissible. The Court of Appeal rejected the objection immediately raised by the first complainant against the decision as regards two applicants and the proxy appointed in accordance with § 6 SpruchG to jointly represent shareholders not present at the proceedings. Following a referral from the Court of Appeal requesting permission to diverge in its findings from other courts at the same or a higher level, the Federal Court of Justice held that the applications from the additional shareholders were in the end admissible. The Regional Court has not yet decided on the merits of the applications.

Both the Regional Court and the Court of Appeal based their findings in the decisions challenged by the constitutional complaint on what is known as the Macrotron case-law from 2002 (BGHZ 153, 47). They were of the opinion that the applicants were entitled to the payment of appropriate compensation from the first complainant as majority shareholder. In their view, the legal system contains an unintentional omission in respect of the company-law consequences of a voluntary delisting since the requirements for a revocation of the admission of shares to trading are only regulated under stock exchange law. Stock exchange law does not, however, regulate such requirements exhaustively. In the opinion of the Regional Court and the Court of Appeal, shareholders require additional protection under company law to protect them against the adverse effects which delisting and the accompanying loss of tradability for the shares on the official (now: regulated market) market entail. The courts ruled that these disadvantages amounted to an encroachment on the legal rights and titles protected by Article 14 GG to which a shareholder was entitled. They held that the market value and the fact that it could be realised at any time were after all “characteristics of property in shares”, which, like property itself, enjoyed constitutional protection. All in all, delisting amounted to an encroachment on the economic rights of the minority shareholders since the legal and economic conditions under which those shareholders benefited economically from their position as owners were fundamentally changed. The ability to trade their shares on the stock exchange affected especially those shareholders whose involvement in the company was limited to the purely financial interests of an investor.

It was held that the effects of voluntary delisting on company shareholders could be compared with the effects of other company-law measures which give rise to statutory indemnification and compensation claims. In particular, the effects were comparable to the effects of a transformation of a listed company into a non-listed company or into a limited liability company, in respect of which transformation law makes provision for an offer of compensation. According to the courts, the transferability of company shares is impaired in these cases in a manner similar to a delisting. For this reason, the drawing of an overall analogy with § 305, § 320b and § 327b AktG and § 29 and § 207 of the Corporate Transformation Act (Umwandlungsgesetz – UmwG) was justified. The courts found overall that delisting was sufficiently similar to intercompany agreements under the Stock Corporation Act and changes of legal form under the Corporate Transformation Act, even if none of these instruments was so comparable as to suggest taking over all of the corresponding provisions. They held that the constitutionally required protection should be provided in the course of valuation proceedings (by analogy with § 1 SpruchG); the reason for this was that only a judicial review of a purchase offer would do justice to the parties’ interests.

The fundamental rights of the first complainant – as the main shareholder – did not speak against such a result. The principle of “practical concordance” did not, in the courts’ view, demand that the main shareholder’s fundamental rights under Articles 2, 3 and 14 GG be granted higher priority than the protected property rights of the minority shareholders.

2. The second complainant was a shareholder of the L. limited partnership with a share capital (Kommanditgesellschaft auf Aktien – KGaA). L. KGaA’s majority shareholder (limited partner) was L. GmbH, which according to its own statement originally held over 95% of the shares; the remaining shares were held by a variety of shareholders (free-float shares). In April 2006, the shares’ admission to official trading on the Munich Stock Exchange was revoked upon application by L. KGaA. The limited partnership’s application was preceded neither by a resolution to this effect adopted by the annual general meeting of shareholders nor by the submission of a purchase offer to the minority shareholders. The delisting was nevertheless executed in the form of what is known as “downgrading“: the shares were henceforth traded on what is known as the qualified over-the-counter market, the “m:access” segment of the Munich Stock Exchange and – as previously – on the over-the-counter market of the Stuttgart Stock Exchange. In 2010, on the basis of a resolution adopted by the annual general meeting of shareholders, the shares belonging to the remaining shareholders were transferred to the majority shareholder in return for cash compensation (“squeeze-out”) and stock exchange trading was discontinued. In November 2010, the limited partnership with a share capital changed its legal form to that of a limited partnership trading under the name of L. KG.

In the original proceedings, which were valuation proceedings, the second complainant applied along with other minority shareholders on the basis of the Macrotron case-law for an assessment of an appropriate amount of cash compensation. The proceedings were directed against the majority shareholder (L. GmbH as the first respondent) and the company itself (L. KGaA as the second respondent). The respondents regarded the valuation proceedings as inadmissible because there was no subject for review since the annual general meeting of shareholders had not adopted a resolution in relation to the submission of a mandatory offer. The respondents argued, in addition, that the change from the official market (what is today called the “regulated market”) to the “m:access” trading segment did not amount to delisting in the sense in which that term is used in the Macrotron case-law of the Federal Court of Justice.

The Regional Court rejected the applications. The applicants’ immediate appeal to the Higher Regional Court was unsuccessful. The Regional Court and the Higher Regional Court justified their view that valuation proceedings were not admissible by stating, concurring in essence, that the fact that § 1 SpruchG does not make provision for such proceedings to apply to delistings does not prevent the proceedings from being admissible. The courts agreed in this respect with the Federal Court of Justice that the scope of application of the Valuation Proceedings Act is not exhaustively regulated in the Act and that Article 14.1 GG can require the Valuation Proceedings Act to be applied by analogy to the case of a delisting. They held, however, that an analogy of such kind was not necessary in the case at hand since the L. KGaA’s change from official trading to the “m.access” segment of the Munich Stock Exchange did not impair the tradability of its shares. The inclusion of the shares in this segment of the over-the-counter market meant that there was a functioning market available to them which the minority shareholders could use to dispose of the shares they held. There were no significant differences in the ascertained price as compared with the official market. The courts found that even though the segment was not governed by public law but rather by private law, both forms of organisation were basically capable of guaranteeing a functioning market. The Munich Stock Exchange established to the satisfaction of the courts that the liquidity of a security does not depend on the market segment in which it is traded, but primarily on the number of tradable securities, the number of free-float shares, how widely known the company is and the sector of industry to which the company belongs.

In the opinion of the courts, the revocation of the admission of shares to trading on the regulated market results in provisions under capital markets law whose application depends on the existence of the regulated market ceasing to apply because neither the over-the-counter market nor its (qualified) segment “m:access” amount to a regulated market within the meaning of § 2.5 of the Securities Trading Act (Wertpapierhandelsgesetz – WpHG). According to the courts, this led, in particular, to some duties of disclosure ceasing to apply. The courts found, however, that unlike in the case of over-the-counter trading, in the case of the “m:access” segment this was compensated for by the necessity of conforming to stock exchange rules which are intended to guarantee transparency and public disclosure and strongly resemble the requirements of the regulated market.

Furthermore, the termination of the listing of its shares for official trading had, it was believed, led to L. KGaA no longer being a stock exchange listed company within the meaning of § 3.2 AktG. The courts stated that a number of rules under the law governing stock corporations and under commercial law, each of which has different objectives, are based on the criteria of stock exchange listing. However, as far as the courts were concerned, these diverging legal provisions did not result in a reduction in the level of protection which would be associated with a noticeable impairment of the marketability of the shares.

§ 29.1 sentence 1 UmwG, which provides for an offer of cash compensation in cases where a listed stock corporation is merged with a non-listed stock corporation, does not provide otherwise. In the courts’ view the fact that the legislature enacted this provision for what is referred to as a “cold delisting” does not support an assumption that it unintentionally omitted to make provision for the situation in the present case, namely of a voluntary delisting. In addition, in the courts’ opinion, shareholders do not have a constitutionally protected right to stock exchange listing or its continuance; the only thing that is relevant is the increased tradability of the shares. However, in the present case this was not affected because the possibility of continuing to trade the shares in the “m:access” segment was not affected.

III.

1. In its constitutional complaint, the first complainant alleges a violation of Article 2.1 in conjunction with Article 20.3, Article 3.1, Article 12.1, Article 19.4, Article 100.1 and Article 101.1 sentence 2 GG by the decisions of the Regional Court and the Court of Appeal, which treated the valuation proceedings brought against the first complainant as admissible. It claims inter alia:

a) The challenged orders violate its fundamental rights because they expose it to valuation proceedings which the ordinary courts have as a result of their own judicial activism instituted against it. It cannot be reasonably expected to wait for the results of the current valuation proceedings pending before the ordinary courts and thus the ordinary courts’ final decision regarding the applicants’ pending applications. The first complainant alleges that valuation proceedings as such already impose a burden that is no longer compensable. In addition, it sees itself exposed to considerable procedural costs for which it would not be reimbursed by the applicants even if the court-appointed valuer did not decide that the price of the mandatory offer should be increased.

b) As far as the merits of the case are concerned, the first complainant believes that it follows from the principle that the judiciary is bound by law and justice (Article 20.3 GG) that the courts only have latitude to develop the law in those instances where a properly reasoned view of ordinary legislation would indicate an unintentional omission in the legislation. It contends that if the legislature has reached a clear decision, a judge is not permitted to alter this on the basis of his or her own legal-policy preferences or to replace the legislature’s decision with a “judicial solution”.

aa) According to the first complainant, the ordinary courts are not permitted to develop the law since not even a legislative omission, which is a prerequisite for the employment of an analogy, is present. In its opinion, existing law provides shareholders with sufficient protection against delisting. On the one hand, by using the procedure provided by law, the minority shareholders could have contested the validity of the resolution adopted by the annual general meeting of shareholders on the grounds that the compensation offered was not sufficient. On the other hand, it would have been possible to have the revocation of the admission of shares to trading on the stock exchange reviewed by the listing authority in a public-law action to contest its validity. The first complainant stated that this revocation was an administrative act which pursuant to § 38.4 BörsG old (now: § 39.2 BörsG) could not be permitted to conflict with the protection of investors. Therefore, the revocation could be contested on the grounds that, if the mandatory offer was inadequate, revocation would conflict with the protection of investors and would be illegal for this reason.

The first complainant argues, in addition, that it is evident from the Valuation Proceedings Act itself that there are no omissions in the legislation. It asserts that § 1 SpruchG defines the scope of the Act without mentioning delisting as one of the instances to which it applies, although the legislature was aware of the Federal Court of Justice’s seminal decision in the Macrotron case at the time it reformed valuation proceedings under company law in 2003. Since the legislature nevertheless did not include delisting within the scope of the Valuation Proceedings Act, one can assume from this that it saw no need to regulate it.

According to the first complainant, the ordinary courts’ application of the solution adopted by the Federal Court of Justice leads them to disregard the scope of discretion given to the stock exchanges by the legislature. Such solution levels the provisions especially laid down for delisting in the individual stock exchange rules and is thus incompatible with the statutory elaboration of stock exchange law. In the opinion of the first complainant, what has in fact occurred is that valuation proceedings created by judges have usurped the matters regulated by the stock exchange rules containing detailed provisions on ordinary delisting and that such stock exchange rules have ceased to have effect.

bb) The first complaint also argues that the similarity between the interests in this case and the previous case-law, which is required for the permissible development of the law, is absent in this case. For example, in its decision in the Macrotron case, which was relied on by the Regional Court and the Court of Appeal, the Federal Court of Justice erroneously assumed that Article 14.1 GG also required minority shareholders to be protected in the event of a delisting. The first complainant submits that, contrary to this view, the revocation of the shares’ admission to official trading does not encroach on the property in shares protected by Article 14.1 GG. In the first complainant’s opinion, property law protects a shareholder’s membership rights and the economic rights that property in shares generates. On the other hand, the tradability of a share is simply a value-creating factor.

The first complainant asserts that the Federal Constitutional Court has already made clear in its DAT/Altana ruling (BVerfGE 100, 289) and in its Moto Meter ruling (Ruling of the First Chamber of the First Senate of 23 August 2000 – 1 BvR 68/95, 1 BvR 147/97 –, Neue Juristische Wochenschrift – NJW 2001, p. 279) that the scope of protection provided by the guarantee of property includes, on the one hand, the economic rights created by property in shares, in particular, the shareholders right to the payment of dividends, their right to a share of liquidation proceeds and subscription rights in the event of an increase in capital, and, on the other hand, control rights, in particular voting rights. It also argues that the Federal Constitutional Court has on the other hand expressly stated that the transferability of a share is not an aspect of property in shares which is covered by the guarantee of property in Article 14.1 GG. Transferability is simply something that reflects the value of a share and is simply a “characteristic of property in shares”. In the opinion of the first complainant, it is not until other circumstances have opened up the scope of protection of Article 14.1 GG that, as part of the legal consequences of interference with the property in the share, the court has to decide on appropriate compensation for it. In determining the appropriate amount of compensation, the fungibility of the share must be taken into account as a value-creating factor.

According to the aforegoing, what is simply a practical restriction on the share’s fungibility is not a constitutionally justifiable reason for interfering with private autonomy to such an extent that a majority shareholder is exposed to proceedings that are not regulated by law to determine “mandatory squeeze-out compensation”.

cc) The first complainant also submits that the complexity of the topic of regulation involved here speaks against allowing the ordinary courts to develop the law. On the basis of the sense and purpose of the proviso of legality, gaps in legislation may not in any case be closed by way of analogy if, in the case of an entire legal area with manifold fundamental-rights connections, the legislature has not decided on its regulation and has not undertaken the weighing of the fundamental-rights considerations necessary for doing so. This is the case here because neither the substantive requirements of a delisting decision by a company, including any mandatory offers, nor the procedural aspects of a review of the mandatory offer are regulated by law although the fundamental rights of different holders of fundamental rights are affected.

c) In addition, the first complainant argues that its exposure to the burden of legal proceedings which are not prescribed by law also violates its right to effective legal protection. In its opinion, the decisions of the Regional Court and the Court of Appeal are completely flawed because of the impermissible development of the law and thus they are also objectively arbitrary (Article 3.1 GG). The first complainant also believes that the decisions violate its freedom to practice an occupation (Article 12.1 GG). It claims that this fundamental right not only protects its access to the stock exchange, but also its withdrawal from the stock exchange as an expression of entrepreneurial freedom.

The two orders also violated its right to a lawful judge because as the affected majority shareholder it is exposed to court proceedings for which the legislature made no provision (Article 101.1 sentence 2 GG). It contends that if a court considers a situation to be unconstitutional, it may not assume the role of substitute legislature and engage in judicial activism. It is obliged to refer the law giving rise to the allegedly unconstitutional situation to the Federal Constitutional Court so that the court can, if necessary, order the legislature to establish a constitutional situation.

2. The second complainant challenges the orders of the Regional and Higher Regional Courts, which held that the valuation proceedings that had been applied for were inadmissible, on the basis that the orders violate its fundamental right to property and its right to effective legal protection.

It submits that according to the Federal Court of Justice’s Macrotron case-law, a company’s withdrawal from the regulated market results in an impairment of the constitutionally protected tradability of the property in its shares. Whether or not it continues over-the-counter trading is not decisive. The second complainant argues that an unconstitutional encroachment can only be avoided if minority shareholders are granted adequate protection. For this to be the case, it argues, it would be necessary for there to be a resolution adopted at the annual general meeting, a reasonable purchase offer on the part of the company and the majority shareholder and the possibility of a judicial review of the reasonableness of the offer made. The second complainant asserts that it has been denied this constitutionally required protection by the challenged decisions.

a) In its opinion, this amounts to a violation of its constitutionally protected property. Article 14.1 GG covers property in shares and its increased transferability. The increased transferability of a share is expressed in its listing on the stock exchange and may not be withdrawn through delisting without any compensation. The second complainant asserts that, according to the Federal Court of Justice’s definition, voluntary delisting is the termination of the admission of shares to trading on the official and regulated markets segments of all stock exchanges, i.e. a stock corporation’s complete withdrawal from the current regulated market. This kind of withdrawal occurred in the case of L. KGaA’s shares. The continued listing of the shares for over-the-counter trading did not change this fact. In the second complainant’s opinion, the Federal Court of Justice stated expressly in its Macrotron decision that the serious economic disadvantages which affected shareholders would suffer as a result of the delisting could not be compensated for by the inclusion of the shares in over-the counter trading.

The second complainant argues that this also applies with regard to the over-the-counter trading segment “m:access” on the Munich stock exchange. It asserts that the prerequisites for proper trading are only present in the regulated market because only the regulated market is adequately regulated and supervised by officially recognised authorities. It contends that in the case of listing for over-the-counter trading and in the “m:access” market segment, the requirements in relation to the supervision of share trading are not equally high. In particular, listing in the “m:access” segment is not an adequate substitute since companies which trade on that exchange only have two duties with which they have to comply: the duty to provide interim financial reports and the duty to publish ad hoc announcements. In contrast, a listed company has numerous other duties. The second complainant argues, in addition, that many statutory provisions relate to stock exchange listing; in the end, they all serve the purpose of ensuring proper tradability but they do not apply to companies involved in over-the-counter trading. Furthermore, listing in “m:access” is only based on a private written agreement between the company and the stock exchange which – unlike listing on the regulated market – does not involve any supervisory or control mechanisms by a public authority. The protection of all market participants under public law cannot be guaranteed by civil-law agreements of such kind.

b) The second complainant also argues that its right to effective legal protection has been violated. This right requires that a mandatory offer be made to minority shareholders to fully compensate them for the loss of the transferability of their shares and that it must be possible to subject the appropriateness of the amount of such offer to judicial review. The second complaint asserts that the challenged decisions have denied it this protection.

IV.

The following persons submitted written statements with regard to the constitutional complaints: the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin); for the Federal Court of Justice, the presiding judge of the Second Civil Senate; for the Federal Administrative Court (Bundesverwaltungsgericht ), the presiding judge of the Eighth Appeals Senate; the Federation of German Consumer Organisations (Verbraucherzentrale Bundesverband e.V .) in a joint opinion with the German Association for Private Investors (Deutsche Schutzvereinigung für Wertpapierbesitz e.V .); the German Association for the Protection of Investors (Schutzgemeinschaft der Kapitalanleger e.V .), the Association of German Banks (Bundesverband deutscher Banken e.V .), the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer in Deutschland e.V .), the German Investor Relations Association (Deutsche Investor Relations Verband e.V .) and the German Equities Institute (Deutsches Aktieninstitut e.V.). In addition, the Munich Stock Exchange (Börse München ), the respondents and other applicants in the original proceedings submitted comments on the second complainant’s constitutional complaint. The Federal Constitutional Court had access to the files of the original proceedings.

1. The Second Civil Senate of the Federal Court of Justice, which is responsible for company law, refers to its finding in the Macrotron decision (BGHZ 153, 47). It explains that the underlying idea behind the development of the Macrotron case-law was that ordinary delisting would deprive minority shareholders of a forum where they could sell their shares to any interested party according to the rules of supply and demand, whereas in the future they would have to laboriously look for potential customers, for example, through newspaper advertisements and would soon encounter the majority shareholder. The Second Civil Senate of the Federal Court of Justice is of the opinion that, as a result of the market situation brought about by the delisting, the majority shareholder would be in a position to influence the purchase price more or less strongly to its advantage. In the Federal Court of Justice’s view, the change from a publicly regulated market to one subject to private-law rules in which small shareholders can trade shares in a similar way does not on the other hand fulfil the requirements of the Macrotron decision. The minority shareholder was not made solely reliant on the benevolence of the majority shareholder in the case at hand.

2. The Eighth Senate of Appeal of the Federal Administrative Court points out in its opinion that the prerequisites for and the scope of the legal protection that the administrative courts provide shareholders against the revocation of the admission of the shares to trading upon application from the issuer has not yet been decided by the Federal Administrative Court. According to the Eighth Senate of Appeal, the German Stock Exchange Act (§ 39.2 BörsG) does, however, offer affected shareholders an adequate basis for protection against the revocation of the admission of their shares to trading since they can enforce such protection by filing an objection against the revocation or by bringing an action to contest its validity. This can ensure effective legal protection even without the extension of the constitutional guarantee of property pursuant to Article 14 GG to an increased transferability of shares resulting from an initial public offering.

In the view of the Federal Administrative Court’s Eighth Senate of Appeal, the protection of the affected shareholders afforded by ordinary stock-exchange law, which can be enforced through proceedings before the administrative courts, does not, however, constitute an exhaustive provision in relation to company law. For this reason, such protection does not prevent the imposition of further company-law requirements on an issuer’s application to have the admission of its shares to trading revoked; such requirements were developed by the Federal Court of Justice in its Macrotron judgment.

3. The Federation of German Consumer Organisations, the German Association for Private Investors, the German Association for the Protection of Investors and the Association of German Banks are of the opinion that the scope of protection afforded by Article 14.1 GG also encompasses in principle a shareholder’s economic rights.

4. The Institute of Public Auditors in Germany stated in its opinion that it has been evident for years, and at the latest since the Macrotron decision, that the way withdrawals from the stock exchange are conducted in practice in Germany is not just influenced but rather determined by the case-law of the Federal Court of Justice. The delistings that have been conducted have normally involved offers of compensation. According to the Institute of Public Auditors in Germany, it is not possible on the basis of the information available to make any firm statements as to whether a change from one stock exchange segment to another results in economic disadvantages for the affected shareholders. In its opinion, there is no indication of a significant decrease in a share’s fungibility or liquidity.

5. The German Investor Relations Association contends in its opinion that the special transferability of listed shares should not be regarded as within the scope of the guarantee of property under Article 14 GG. If at all, transferability alone enjoys constitutional rank; however, transferability is a characteristic of every share and not just of listed shares.

6. The German Equities Institute is of the opinion that in the case of an ordinary delisting there is no constitutional requirement for judges to develop the law by obliging a company to adopt a resolution at its annual general meeting of shareholders and oblige it to produce an offer of compensation.

In its view, the number of ordinary delistings since 2003 can – insofar as can be ascertained – be taken to be 28; this figure excludes cases involving insolvency and liquidation. According to the German Equities Institute, this shows that ordinary delisting is the exception for listed companies and that they tend to opt for squeeze-outs involving a complete takeover of the company by the majority shareholder. The German Equities Institute undertook its own empirical study of German companies which had withdrawn from the regulated market of the Frankfurt Stock Exchange upon application from the issuer in the period from 2001 until 2009; it was only possible to identify nine companies among this group whose delisting was similar to the case of the first complainant. In this context, it was not possible for the German Equities Institute to determine a generally applicable pattern: investors might profit from an increase in the share price following the decision to delist, but they might just as well not profit from it. Nor was it possible to detect from an examination of the market where the greatest number of transactions were carried out that there was a uniform trend in the change in the trading prices and the intensity of trading before and after a change from the regulated market to over-the-counter trading.

7. The Munich Stock Exchange stated in its submissions that the capital market and the way it was regulated had undergone enormous change since the Federal Court of Justice’s decision in the Macrotron case. According to it, over-the-counter trading has in the meantime also been accepted by institutional investors. A listing in “m:access” involves consequential duties which essentially correspond to those of the organised markets. In the opinion of the Munich Stock Exchange, the factors that contribute to the trading liquidity and thus the fungibility of a share are not the stock exchange segment in which it is traded, but the size of the company, its number of tradable securities, the number of free-float shares, the degree to which it is known, the sector of industry to which it belongs, its corporate announcements and its business development.

V.

At the oral hearing, the representatives of the German Equities Institute, the German Association for Private Investors, the Munich Stock Exchange and the Frankfurt Stock Exchange submitted, among other things, that there had only been a few cases during the last ten years which were comparable with the delistings in the original proceedings. They contended that it was not possible to make firm statements about the effect on the share price of a complete delisting or a change from one stock exchange segment to another. In addition, the representatives of the stock exchanges emphasised that over-the-counter trading was meanwhile the norm since the majority of shares are listed on the over-the-counter market. In their opinion, investors are protected in the case of a voluntary delisting because, among other things, deadlines must be met during the span of time from when the delisting is announced until the time when it is executed and this gives the investors time to sell their shares in the regulated market.

B.

The constitutional complaints are admissible.

I.

The second complainant has exhausted all legal remedies and satisfied the requirements of the principle of the subsidiarity of constitutional complaints (§ 90.2 sentence 1 of the Federal Constitutional Court Act (Bundesverfassungsgerichtsgesetz – BVerfGG); see BVerfGE 112, 50 <60>). According to old law that applied in this case, no additional complaint could be brought by the second complainant against the rejection of the objection immediately raised by it during the valuation proceedings (§ 12.2 sentence 2 SpruchG in the version in force until 31 August 2009, (Federal Law Gazette (Bundesgesetzblatt – BGBl) I 2003, p. 838). The second complainant could not be reasonably expected to exhaust other opportunities for legal protection. Neither an action to contest the validity of the revocation of the admission of shares to trading on the stock exchange brought before the administrative courts, nor an application for an injunction against the company would – based on the established case-law of the ordinary courts – have served its goal of legal protection, namely not to challenge the revocation itself, but rather to make it subject to the condition that it be accompanied by a reviewable purchase offer.

The second complainant’s interest in judicial relief has not been eliminated just because the complainant has meanwhile lost its status as shareholder due to the squeeze-out of the minority shareholders. According to the consistent view expressed in the relevant case-law and scholarly literature, the fact that the second complainant has been squeezed out does not lead to the loss of its right to file an application in valuation proceedings. Since the squeeze-out became effective after the revocation of the admission of the shares to trading on the stock exchange, different points in time are relevant for the offers of compensation and, consequently, this can result in their having different values. It is broadly thought to be possible for shareholders to decide following any valuation proceedings whether they wish to withdraw from the company in return for compensation for the first or for the second structuring measure (see Drescher, in: Spindler/Stilz, Aktiengesetz , 2nd ed. 2010, § 3 SpruchG, marginal no. 32 with further references, § 13 SpruchG , marginal no. 3).

II.

The first complainant’s constitutional complaint, which is directed against the interlocutory decisions, is admissible because these decisions in and of themselves result in the first complainant suffering permanent adverse legal effects (§ 90.2 BVerfGG; see BVerfGE 58, 1 <23>). The ordinary courts have found the applications filed in the valuation proceedings by the second applicant and the third applicant in the original proceedings to be admissible and, as can be seen from the main reasons for their decisions, affirmed the right to file an application of these applicants and of the joint proxy pursuant to § 6 SpruchG. This includes a finding that the right to take over the shares in return for payment of an appropriate purchase price is justified on the merits. Thus, in accordance with § 280 of the Code of Civil Procedure (Zivilprozessordnung – ZPO), the admissibility of the applications is not at issue during the further course of proceedings.

C.

The constitutional complaints are unfounded.

The challenged decisions do not violate the complainants’ fundamental rights as they allege. In particular, the revocation of the admission of the shares to trading on the regulated market (previously: the official market) upon the issuer’s application does not affect the scope of protection of a shareholder’s fundamental right to property (Article 14.1 GG). The requirement, by way of analogy to the provisions on other corporate restructuring measures, of the ordinary courts that a company or its majority shareholder make an offer to buy the shares of the remaining shareholders if the company completely withdraws from the stock exchange and that such offer be subject to judicial review is within the constitutional limits which apply to the judicial development of the law (Article 2.1 in conjunction with Article 20.3 GG).

I.

The Regional Court and the Higher Regional Court were not required under the constitution to grant the second complainant’s application in the original proceedings in respect of constitutional complaint 1 BvR 1569/08; following the revocation of the stock exchange listing of the company in which it held shares and the associated downgrading of its shares to the qualified over-the-counter market largely regulated by the stock exchange, the second complainant applied in its capacity as shareholder for an order in the original proceedings that it be made a purchase offer which could be reviewed and determined by the courts.

1. The revocation of the admission of shares to trading on the regulated market does not affect the area protected by the shareholder’s fundamental right to property. It does not deprive the shareholder of legal rights and titles which the legal system regards as for his or her private benefit and which the legal system treats as property in respect of which the shareholder has a right of disposal; such revocation does not impair the substance of the ownership in a company in its elaboration under the law governing membership rights or economic rights.

a) Article 14.1 GG guarantees property. It includes the ownership in a company that is embodied in the share; the elaboration by company law of the ownership in a company is characterised by the private benefit of the property and the right to dispose of it (see BVerfGE 100, 289 <301> with further references). The protection afforded by Article 14.1 GG covers the substance of the ownership in a company in its elaboration under the law governing membership rights and economic rights (see BVerfGE 100, 289 <301-302>). The area of protection of the fundamental right to property is, for example, affected by the integration of the stock corporation into a group (see BVerfGE 14, 263), by the conclusion of a control and profit transfer agreement (see BVerfGE 100, 289), but also by a squeeze-out of the shareholder (see Chamber Decisions of the Federal Constitutional Court (Kammerentscheidungen des Bundesverfassungsgerichts – BVerfGK) 11, 253). What is important in these cases is that shareholders lose their legal rights and titles that are embodied in the share or that the substance of such legal rights and titles is altered.

On the other hand, there is no protection for simply the economic value of property in shares or the continued existence of individual value-creating factors, in particular those which increase the actual transferability of a share. Therefore, the scope of constitutional protection of property does not in principle extend to the value-creating effect of the provisions of the law governing stock corporations and stock exchange law that regulate the markets and relate to companies; according to the legislature, the purpose of such provisions is to create transparency and, in view of the economic power of large listed stock corporations and their significance for the economy, to prevent abuse and serve the general good. Even if the provisions impose duties on the company and its governing corporate bodies or grant them rights which could also be indirectly of benefit to individual shareholders or potential investors as a whole, such provisions do not in this way become an object of the protection afforded by Article 14.1 GG. This is because the law does not allocate them to individual shareholders with a right to dispose of them for their own benefit. Instead they and the possibilities associated with them only constitute economic risks and rewards which do not share in the guarantee of existing property provided by Article 14.1 GG (see BVerfGE 45, 142 <170-171, 172-173>; see also BVerfGE 105, 252 <277-278>).

b) According to these standards, the revocation of the admission of shares to trading on the regulated market does not affect the area protected by Article 14 GG. Such revocation does not impair the substance of the ownership in a company in its elaboration under the law governing membership rights or economic rights.

The continued existence of the membership right and the relative participation rights resulting from membership are not affected. The shareholders’ position under the law governing membership rights is not weakened, as would be the case for instance by a mediatisation of their participation rights (see on this BGHZ 83, 122 <136 et seq.>; 153, 47 <54>). The internal structure of the company is not altered by its withdrawal from the regulated market of the stock exchange.

The possible increase in the share’s transferability resulting from trading on the regulated market is not an aspect of constitutionally protected ownership in a company (aa). The special legal rules that apply due to the admission of shares to trading on the stock exchange, in particular the provisions of law governing stock corporations as well as the standards of the Stock Exchange Act, are similarly not constitutionally protected aspects of private property (bb). The revocation of listing by operation of law does not weaken the economic value of the shares in a way that possibly infringes the economic substance of the property in the shares (cc).

aa) The possible increase in the share’s transferability in practice resulting from trading on the regulated market of the stock exchange does not share in the guarantee of property in shares. It is true that the Federal Constitutional Court’s case-law acknowledges the share’s special transferability as a “characteristic” of the property in shares (see BVerfGE 100, 289 <305>). This means, however, that only the legal transferability as such is part of the property acquired, which is protected under Article 14.1 GG. If it were possible to ascertain an increased transferability in practice, this would merely be an opportunity for earnings and trade.

(1) The legal rights and titles associated with the admission of a share to trading on the regulated market are not as such an individual, public-law right of a shareholder (§ 32 BörsG). Shareholders do not have a right to the admission of their shares to trading on the regulated market, even if the consequences of such admission affect them (see only Groß, in: Ebenroth/Boujong/Joost/Strohn, HGB , 2nd edition 2009, § 32 BörsG , marginal nos. IX 254, IX 295 with further references).

(2) The admission of shares to trading on the regulated market does not influence the legal transferability of the share. The transferability of the share, which is understood as the legal authority to sell it in a market at any time, is not affected by delisting. According to the elaboration in non-constitutional (ordinary) law, shares not listed on the stock exchange are as transferable as listed ones. In principle, they can be sold without requirements as to form having to be complied with, and without the trade being bound to a particular trading platform established under public law. That distinguishes them from other types of company-law interests, for example the transfer of shares in a private limited company, which requires notarisation (§ 15.3 of the Private Limited Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung – GmbHG), or special forms of property in shares such as restricted transferability (§ 68.2 AktG).

(3) The actual tradability of the share is, in principle, insignificant with regard to the question of the existence and the allocation of the property in the share. In this context, all that is affected in practice is the share’s chances of being sold in the market and at most the extent to which it can be circulated. The fundamental right to property does not guarantee the functionability of a market. The participation of a share in the stock exchange pricing and trading system organised under public law is consequently not a subject of the guaranteed right to property (on this, see Adolff/Tieves, Der Betriebs-Berater – BB 2003, p. 797; Ekkenga, Zeitschrift für Unternehmens- und Gesellschaftsrecht – ZGR 2003, p. 878 <882 et seq.>; Mülbert, Zeitschrift für das gesamte Handels- und Wirtschaftsrecht – ZHR 165 (2001), p. 104 <114>, and in FS (Festschrift ) Hopt, 2010, p. 1039 <1053 et seq.>; for a contrary opinion, see Hellwig/Bormann, ZGR 2002, p. 465 <473 et seq.>; Hofmann, in: FS Hopt, 2010, p. 833 <845>; Kruse, Wertpapier-Mitteilungen – WM 2003, p. 1843 <1845-1846>).

(4) Thus, as far as the economic aspect of property in shares is concerned, the admission of a share to trading on the regulated market is one of several value-creating factors of a share. Such factors are merely considered market opportunities, which means that they are not protected by constitutional law; an example of this is registration of a share in a share index, which is something that can have a considerable influence on the demand for the share. Furthermore, the assessment of delisting as simply a value-creating factor is consistent with the reverse legal situation, namely that shareholders do not have a right to stock exchange listing and do not have a duty to make compensation for an appreciation in value resulting therefrom. The shareholder is required to accept delisting as a business-policy decision by the company and its governing corporate bodies. Delisting is therefore a risk acquired at the same time as property in shares is acquired, in much the same way as the company’s business model, its market analysis, it long-term interests in the light of its existing shareholder structure and the expected stability of the shareholder structure are also risks (with regard to the latter, see provisions that protect investors in § 35, § 39 and § 31 of the Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz – WpÜG)). In addition, it may be good business policy or good corporate strategy for the company to voluntarily withdraw from the regulated market and this may confer benefits in other ways on the company as well as on the shareholders (regarding the motives for a voluntary delisting, see: Krämer/Theiß, Die Aktiengesellschaft – AG 2003, p. 225 <226>; Pfüller/Anders, Neue Zeitschrift für Gesellschaftsrecht – NZG 2003, p. 459 <460>). The reasons which the companies provided in the original cases for the revocation of the admission of its shares to trading make this clear.

(5) This constitutional assessment is in keeping with the Federal Constitutional Court’s previous case-law, namely in the DAT/Altana decision (BVerfGE 100, 289 <305>). In that case, the Senate emphasised that where there is an encroachment on property, the especially strong transferability of the share and in particular its market value have to be taken into account when the value of the property in the share is determined so that appropriate compensation can be calculated. Admission of shares to trading on the regulated market is thus just one characteristic that can improve the transferability of shares; it is therefore a value-creating factor that cannot be ignored in connection with the calculation of appropriate compensation, which is not, however, in issue here. On the other hand, especially strong transferability is not something that is protected by Article 14.1 GG.

bb) Neither the fact that admission to the regulated market results in the application of numerous special provisions concerning stock exchange listed companies under the law governing stock corporations and under commercial law (1), nor the standards of stock exchange law that are applied in the regulated market (2) make it possible to consider listing in the regulated market as an aspect of property.

(1) A company is subject to a series of specific provisions as a result of the admission of its shares to trading on the regulated market. The Stock Corporation Act alone contains numerous provisions, for example, provisions in respect of the remuneration of members of the management board (§ 87.1 AktG), provisions on the limitation periods in respect of the liability of members of the management board (§ 93.6 AktG), provisions regarding the move of a member of the board of management to the supervisory board (§ 100.2 no. 4 AktG), provisions regarding the number of supervisory board meetings (§ 110.3 AktG), provisions regarding the formalities for convening the annual general meeting (§ 121 et seq. AktG), provisions regarding the minutes of the annual general meeting (§ 130 AktG), provisions regarding announcements (§ 149 and § 248a AktG) and provisions in respect of the Corporate Governance Code (§ 161 AktG). In addition, special capital market and accounting provisions, such as the Securities Trading Act, apply to stock exchange listed companies. As a rule, accounting law differentiates between companies on the basis of their size; stock exchange listed companies are subject to the accounting provisions that apply to large companies (§ 267.3 sentence 2 in conjunction with § 264d of the German Commercial Code (Handelsgesetzbuch – HGB)).

Although the legislature has not yet created a uniform and cohesive body of company law for stock exchange listed companies, it is apparent from many of its proposals during the last few years that its plan has been to increase supervision and transparency in the area of stock exchange listed companies and to increase duties of public disclosure. The purpose of the provisions is in part to make the structure of stock exchange listed companies more transparent for potential local and foreign investors and to provide them with more information for their investment or disinvestment decisions. At the same time, the legislature has reacted to what it considers deficiencies in the law by introducing various amendments to the law governing stock corporations for stock exchange listed companies. The provisions are intended to contribute to a better corporate culture and to greater corporate success, and in particular, they are intended to protect against undesirable developments. Due to the high economic significance of stock exchange listed companies, the legislature has shown through such provisions that there is a public interest in the functioning of this type of legal entity. At the same time, the narrow framework of laws aimed at transparency assists in the supervision of the economic power held by stock exchange listed companies in view of the social obligation attached to ownership (see, for example, Bayer, in: FS Hopt, 2010, p. 373 <383>; see also K. Schmidt, in: K. Schmidt/Lutter, AktG , 2nd ed. 2010, Introduction , marginal nos.9-10).

It is true that this detailed body of laws applying to stock exchange listed companies indirectly serves, inter alia, the individual shareholder’s economic and membership interests. In this respect, however, their benefit to the shareholder is merely a reflex, which does not make the special regime of regulations for stock exchange listed companies an object of protection of the shareholder’s property in shares. All in all, the provisions cannot be taken as according property in shares constitutionally protected rights and titles. Viewed as a whole, they are not private benefits of an individual shareholder, but rather merely benefits conveyed by property in shares.

(2) The same applies to the standards of protection under stock exchange law resulting from admission of shares to trading on the regulated market. The public-law trading regime, in particular the powers of the exchange supervisory authority (§ 3.3 BörsG) and the duties that follow from admission to trading are intended to ensure that trading is properly conducted and to prevent irregularities (see Hopt, in: Baumbach/Hopt, HGB , 35th ed. 2012, § 3 BörsG , marginal no. 7; Groß, in: Ebenroth/Boujong/Joost/Strohn, HGB , 2nd ed. 2009, § 3 BörsG , marginal no. IX 76). This stock exchange law standard serves the public interest in the transparency, quality and efficiency of the markets used by companies to raise capital and serves the public interest in the tradability of shares. On the other hand, the protection of the capital markets and of investors does not involve the allocation to individual shareholders for their own private benefit. This does not preclude shareholders from possibly relying on individual stock exchange rules as individual rights under ordinary law.

cc) There is no need to address the question of whether the economic aspects of the constitutional protection of property in shares could justify a different evaluation if the revocation of the shares admission to trading normally resulted in a decrease in the share price of such magnitude as to affect the economic substance of property in shares. The reason for this is that it is in any event no longer possible to present solid evidence of such an effect in respect of the relevant periods in this case either after 2004 or on the basis of current conditions. None of the opinions from expert third parties provide sufficient support for the conclusion that notification of intended delisting leads to a significant decrease in the share price.

2. In light of the aforegoing, the decisions challenged by the second complainant, which were issued in the original proceedings in respect of the constitutional complaint, do not violate its fundamental right to property. The downgrading of the share without a mandatory offer by the company or by its main shareholder that can be reviewed in valuation proceedings, which is at issue here, is also constitutionally unobjectionable. The ordinary courts have not failed in their interpretation of the law to guarantee constitutional protection of property in shares. It is true that they assumed that increased transferability resulting from admission of shares to trading on the regulated market was protected by the fundamental right to property. However, if the scope of protection of Article 14.1 GG is not affected by the revocation of the admission of the shares to trading on the stock exchange, then the results of the decisions of the ordinary courts in the original proceedings will not in and of themselves be constitutionally objectionable in relation to Article 14 GG.

3. The second complainant’s right of recourse to the courts has not been violated (Article 2.1 in conjunction with Article 20.3 GG). Its right of recourse to the courts has no separate significance independently of Article 14.1 GG in the present case. The second complainant is seeking in this respect procedural protection in respect of what it believes are property rights that are within the scope of Article 14.1 GG although the law does not provide for such procedural protection. If a mandatory offer is not, however, constitutionally required, then no right of recourse to the courts is needed for a review of the appropriateness of the offer.

II.

In addition, the interlocutory decisions in the original proceedings in respect of constitutional complaint 1 BvR 3142/07 (in which the ordinary courts held that the valuation proceedings that had been applied for to be instituted against the first complainant to review its share purchase offer were admissible) are not open to any serious constitutional objections.

1. The assessment of the Regional Court and the Court of Appeal that the first complainant’s offer was a mandatory offer to be inferred from an overall analogy to company-law provisions governing other structural measures (§ 305, § 320b and § 327b AktG as well as § 29 and § 207 UmwG), and the corresponding application of § 1 SpruchG respect the bounds set by the constitution to the judicial authority to decide (Article 2.1 in conjunction with Article 20.3 GG).

a) The application and interpretation of the laws by the courts is in harmony with the rule of law (Art. 20.3 GG) if it takes place within the bounds of justifiable interpretation and permissible further development of the law by judges. In conjunction with Article 20.3 GG, Article 2.1 GG guarantees each individual that decisions issued against him or her will satisfy these requirements (see BVerfGE 128, 193 <206 et seq.>).

The duties connected with the administration of justice include the further development of the law. Therefore, an analogous application of provisions from ordinary law and the closing of gaps in the legislation are in principle constitutionally unobjectionable. The further development of the law does not constitute impermissible self-assumed authority on the part of judges (richterliche Eigenmacht ) as long as the recognisable will of the legislature is not pushed aside and replaced by an autonomous weighing of interests by judges (see BVerfGE 82, 6 <11 et seq.>). This has long been recognised by the legislature and it has expressly left the task of developing the law to the highest civil court (see § 132.4 of the Judicature Act (Gerichtsverfassungsgesetz – GVG) and § 543.2 sentence 1 no. 2 ZPO). This allows the legislature the opportunity to correct undesirable legal developments and through the interaction of case-law and legislation to exercise democratic responsibility.

On the other hand, the further development of the law by judges may not result in the courts substituting their own substantive idea of justice for that of the legislature (see BVerfGE 82, 6 <12>; 128, 193 <210>). Instead, the duty of the administration of justice is restricted to bringing to bear the sense and purpose of a law that has been laid down by the legislature as reliably as possible under changed circumstances, or to fill an omission in the legislation that runs counter to the legislative objective by means of the recognised methods of interpretation. An interpretation that is expressed as judicial development of the law which disregards the wording of legislation and ignores the recognisable will of the legislature encroaches impermissibly on the authority of the democratically legitimised legislature (see BVerfGE 118, 212 <243>; 128, 193 <210>).

In addition, it is primarily the duty of the ordinary courts to answer the question as to whether and, if so, to what extent gaps in legislation exist or a change in circumstances requires further legal answers. The Federal Constitutional Court is in principle not permitted to substitute its assessment for that of the ordinary courts. Its supervisory powers are limited to deciding whether the ordinary courts’ creative interpretation respects the fundamental legislative decision and its objectives, and whether the ordinary courts have followed recognised methods of legislative interpretation (see BVerfGE 96, 375 <395>; most recently BVerfGE 128, 193 <210-211> with further references).

b) The overall analogy challenged by the first complainant lives up to these standards. The manner in which the ordinary courts have further developed the law does not conflict with the fundamental legislative decision; nor does their assessment contravene recognised methods of interpretation.

aa) However, statute law does not contain a provision prescribing that if the listing of a share on the regulated stock exchange market is revoked, the majority shareholder or the corporation itself will be obliged to offer the minority shareholders compensation for impairment of tradability. The only protection available is at the level of capital-markets law. In this respect, § 39.2 BörsG merely provides that the delisting may not contradict the protection of investors; it leaves, however, the further elaboration of the modalities of the delisting to the respective stock exchange rules.

bb) The courts originally dealing with the matter regarded this protection as inadequate and held that it was necessary to settle conflicting interests by resorting to an overall analogy with company-law provisions. The assumption that there was a need for regulation is not constitutionally objectionable. In particular, no constitutional objection can be raised against the fact that the ordinary courts did not assume from the outset that the provision under capital markets law protecting investors contained in § 39.2 BörsG prevented them from drawing an overall analogy because such provision had to be regarded as exhaustive (see Krämer/Theiß, AG 2003, p. 225 <235>). No reliable reasons for doing so are evident from the legislative history or the methodology of the law (see Bundestag document (Bundestagsdrucksache – BTDrucks 13/8933, p. 182, see also Adolff/Tieves, BB 2003, p. 797 <798>; for a different opinion, see Wilsing/Kruse, WM 2003, p. 1110 <1113>).

cc) The ordinary courts were also entitled in their assessment under ordinary law to consider a mandatory offer as appropriate from a company-law perspective. It is true that the constitution neither bound them (see C. I. 1. above) nor prevented them from assessing the starting position in the case of a revocation of the admission of shares to trading on the regulated market as similar to the starting position in the case of other measures in respect of which the legislature has made express provision for a mandatory offer that can be reviewed by the courts. They were permitted to transfer the general principles underlying those provisions to a revocation of the admission of shares to trading on the stock exchange.

Insofar as the ordinary courts assumed in the final analysis that it was possible to assess the present provisions as being comparable to those which apply to the case of a voluntary delisting under company law in terms of their requirements and legal consequences, it may be possible to make a different assessment under ordinary law. The reason for this is that the loss of the regulated market of the stock exchange as a “market place” for the later sale of the shares as part of a voluntary delisting is not comparable in all respects with any of the provisions (§ 305, § 320b and § 327b AktG, § 29 and § 207 UmwG) referred to by the ordinary courts for the purposes of drawing analogies. All of these sections which provide for a mandatory offer have peculiarities and, in addition, there is no single party liable for payment of compensation.

This does not, however, lead to a finding of a gross contradiction to the clearly recognisable will of the legislature, or any other derogation from the law in terms of judges’ self-assumed authority. The assumption of an overall analogy is not constitutionally objectionable. The ordinary courts have inferred the consistent fundamental idea from the statutory duties of compensation existing in the cases of integration (§ 320b AktG), merger (§ 29 UmwG), change of legal form (§ 207 UmwG) and the conclusion of a control and profit transfer agreement (§ 305 AktG) that mandatory offers prescribed by statute provide the shareholders with the possibility of deciding, without an economic disadvantage or in any case the risk of same, whether they want to uphold their membership right under the circumstances that have substantially changed (possibly in a manner disadvantageous to them) as a result of the structural measure. In particular, they provide minority shareholders who cannot prevent such a structural measure with the possibility of withdrawing from the stock corporation due to the changed circumstances against adequate compensation.

There is also justification for viewing this idea as sound in the case of a voluntary delisting. It is true that the special regulatory framework for listed stock corporations does not apply for the private benefit of individual shareholders. As explained (see C. I. 1. above), the regulatory framework is thus not within the scope of protection of Article 14 GG, and it is not possible to infer from Article 14 GG any necessity for making a mandatory offer. There is also doubt as to whether shares that are no longer traded on the regulated market normally experience a downward trend in their price; however, it does not appear possible to rule this out completely. In any case, it was simply not unjustifiable for the ordinary courts to assume that the minority shareholders were entitled to protection and that this case was comparable to those cases where a mandatory offer must be made by the majority shareholder.

The fact that the legislature, in spite of repeatedly becoming active in corporate transformation and company law, did not see a reason to counteract the legal development initiated by the Federal Court of Justice’s Macrotron decision is another factor that speaks against the assumption that the limits of the judiciary’s being bound by the law have been transgressed. Instead the Federal Government’s explanatory memorandum in respect of the 2007 extension of § 29 UmwG to cover the merger of a non-listed stock corporation with a listed stock corporation adopts the reasoning in this 2002 Federal Court of Justice decision (BGHZ 153, 47) and adds that the loss of stock exchange listing does not make it more difficult to sell the shares from a legal point of view but from a practical point of view (see BTDrucks 16/2919, p. 13, see also pp. 23, 28).

dd) In addition, no constitutional objection can be made to the ordinary courts’ application by way of analogy of the provisions of the Valuation Proceedings Act. If the overall analogy that has been established with regard to substantive law, i.e. the requirement of a mandatory offer in the case of a complete withdrawal from the stock exchange, is constitutionally unobjectionable, the same is true of the analogous application of the provisions of procedural law that support substantive law to make it possible to review the adequateness of the purchase price offered.

In addition, there is nothing to indicate that in the case of a voluntary delisting the legislature would have wished to exclude a review of a mandatory offer during valuation proceedings. On the contrary, the legislative materials indicate that the Legal Affairs Committee of the Bundestag expressly stated in connection with the reform of valuation proceedings under company law that the list of cases in which § 1 SpruchG applies was not exhaustive and that there was nothing to prevent the section applying to other cases such as delisting (BTDrucks 15/838, p. 16). During the further course of the legislative procedure, this position remained uncontradicted. The fact that a proposal by the Bundesrat to expressly include delisting in the list of cases eligible for valuation proceedings was rejected does not result in a different conclusion. In its reply, the Federal Government merely made reference to the fact that the debate on this topic had not yet been concluded (see BTDrucks 16/2919, pp. 25, 28). Accordingly, the prevailing view in the case-law of the ordinary courts and in the scholarly literature is that the list of cases in which valuation proceedings are available in § 1 SpruchG is not exhaustive (see Higher Regional Court Zweibrücken, Zeitschrift für Wirtschaftsrecht – ZIP 2005, p. 948 <950>; Drescher, in: Spindler/Stilz, AktG , 2nd edition 2010, § 1 SpruchG , marginal nos. 16-17; Hüffer, AktG , 9th ed. 2010, appendix § 305, § 1 SpruchG , marginal no. 6 with further references; Volhard, in: Semler/Stengel, UmwG , 2nd edition 2007, § 1 SpruchG , marginal no. 3, with further references; with regard to the analogous application of valuation proceedings – which at that time were still anchored in § 306 AktG old – see also the order of the First Chamber of the First Senate of 23 August 2000 – 1 BvR 68/95, 1 BvR 147/97 – “Moto Meter”, NJW 2001, p. 279 <281>). That is not unjustifiable.

2. In addition, no other fundamental rights or rights equivalent to fundamental rights of the first complainant have been violated.

The general principle of equality in its expression as a prohibition on objective arbitrariness (Article 3.1 GG) does not justify a result different to the one obtained by an examination based on the standard of the judiciary’s being bound by the law (Article 2.1 in conjunction with Article 20.3 GG). With respect to the first complainant’s liberty rights, there is nothing in the challenged decisions to indicate that any errors of interpretation occurred which were based on a fundamentally erroneous view of the significance of the fundamental rights and in particular the scope of their area of protection (see BVerfGE 18, 85 <92-93>; 85, 248 <257-258>; 87, 287 <323>). Freedom to practice an occupation in the form of entrepreneurial freedom (Article 12.1 GG), which includes freedom of access to the stock exchange as well as withdrawal from it, is available to an issuer, i.e. the stock corporation in which shares are held (see Seiffert, in: Kümpel/Wittig, Bank- und Kapitalmarktrecht , 4th edition 2011, marginal no. 4.479; Holzborn/Schlößer, Zeitschrift für Bank- und Kapitalmarktrecht – BKR 2002, p. 486). For a shareholder, such freedom is the reflex of a fundamental right.

The first complainant’s alleged violation of its right of recourse to the courts (Article 2.1 in conjunction with Article 20.3 GG) has not occurred if for no other reason than the first complainant is not seeking effective protection from the courts. In fact precisely the opposite is true since it does not wish to be subject to judicial review; in other words it is demanding a right to be “spared judicial attention”. No such right can be inferred from the guarantee of effective legal protection. In addition, the fundamental procedural right based on Article 101.1 sentence 2 GG is not affected.

3. The result that the overall analogy is constitutionally not objectionable also does not run counter to the assumption that the revocation of the stock exchange listing does not affect the area protected by the fundamental right to property. To answer the question as to whether a further development of the law by judges is still constitutional, it is not decisive whether the further development of the law can be justified by Article 14.1 GG. However, one of the factors that initiated the legal development concerning the overall analogy was the fact that in its Macrotron decision (BGHZ 153, 47), the Federal Court of Justice held that the property in shares (Article 14 GG) was affected. Nonetheless, this does not affect the result of the decision to be made here. This case-law seeks to settle conflicting interests in a justifiable manner irrespective of whether the settlement is underpinned by ordinary law or constitutional law. Whether or not from a constitutional perspective the judiciary’s interpretation of the law has violated the principle that binds the judiciary to the law and is thus impermissible is not something that is evaluated according to the judiciary’s motives for the interpretation but only according to whether its interpretation as such respects the boundaries of a constitutionally permissible further development of the law.

Thus, the drawing of an overall analogy, which results in a demand for a judicially reviewable mandatory offer in the case of a voluntary delisting, is permissible, but not required under the constitution. It is left to the further case-law of the ordinary courts to examine, on the basis of the circumstances in share trading that will then apply, whether the line of argument followed in case-law until then will be upheld, and to evaluate how the change from the regulated market to qualified over-the-counter trading will be assessed in this context.