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«Management Buy-Out, Cash Pooling, Up-Stream Loans and Guarantees in German Group Companies: Old Concepts – New Developments By Jochen Herbst∗ A. ...»

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Management Buy-Out, Cash Pooling, Up-Stream Loans

and Guarantees in German Group Companies: Old Concepts – New Developments

By Jochen Herbst∗

A. Introduction

For more than a century, the cardinal provision ensuring the preservation of the

capital reserve in the registered share capital amount in a Gesellschaft mit beschränkter Haftung (GmbH – German company with limited liability) has continued unaltered. This is the payout prohibition contained in § 30 (1) Gesetz betreffend die Gesellschaften mit beschränkter Haftung (GmbHG – German Act on Companies with Limited Liability), which the Bundesgerichtshof (BGH – German Federal Court of Justice) has identified as a “cornerstone of the GmbHG.”1 In consideration of the impressive period of applicability and evident resistance of the provision against legislative encroachments, the lay person, for example a managing director of a GmbH as primary addressee of the provision, is now supposed to be able to assume that at least the fundamental legal issues concerning the provision have been sufficiently clarified through jurisprudence and legal practice in the meantime.

This assumed first impression shall be refuted in this contribution on the occasion of a seminal judgment by the BGH of 24 November 2003.2 This decision concerned the case of the granting of a loan to a shareholder in a GmbH. Since the famous Helaba/Sonnenring judgment by the BGH regarding a purchase price deferral of payment for real properties owned by a GmbH and sold to its shareholders,3 the controversial debate about permissibility and boundaries of the granting of loans ∗ Dr. iur. Research and Teaching Assistant at the Institute for Public International Law, University of Cologne, and Of Counsel at the law firm PPR & Partner, Düsseldorf. Email: jochen.herbst@pprpartner.de.

See BGHZ 28, 77 (78).

2 See BGH Wertpapier-Mitteilungen (WM) 325 (2004) = Betriebs-Berater (BB) 293 (2004) = Der Konzern 196 (2004) = Neue Zeitschrift für Gesellschaftsrecht (NZG) 233 (2004) = GmbH Rundschau 302 (2004) = Zeitschrift für Wirtschaftsrecht (ZIP) 263 (2004) = Der Betrieb 371 (2004).

See BGHZ 81, 311 = NJW 1982, 383.

1218 [Vol. 05 No. 10


by a GmbH to its shareholders has never been laid to rest. The same chamber has now handed down a fundamental decision on this legal issue. The new decision has given unmistakable impulses regarding an essential reorientation of the formerly well-established dogmatic concept of § 30 (1) GmbHG. Due to this fundamental reorientation, the judgment is, however, having consequential effects which are scarcely to be underestimated, particularly in the areas of the financing of and cash pooling in Konzerne (groups of companies) and management buy-outs (MBO) as wellas in other particularly practice-relevant areas, both for the GmbH and also for the Aktiengesellschaft (AG – German stock corporation). The judgment has, therefore, caused a lively and controversial debate among both German legal scholars and practitioners.4 Beyond the case, such debate also may well have significant impacts on the more general debate on corporate liability and creditor protection concepts in the European context.5 Against the background of former positions in the legal literature (see B. below), the ground-breaking decision by the BGH and its reasoning are critically appraised in the following (see C. below). The starting point is the highlighting of practicerelevant consequences of the new case law in the area of Group financing, cash pooling and MBO, as well as the question of the transferability to the stock corporation (see D. below)

B. Overview: Granting of Loans by a GmbH to its Shareholders

The question of permissibility and boundaries of the granting of a loan by a GmbH to its shareholders in the area of the committed company assets was discussed in the former literature both controversially and in a lively manner. The starting point of the considerations in this regard is the payout prohibition pursuant to § 30 (1) GmbHG. This provision strictly forbids payouts from the committed assets 4 For comments on the judgment, see Binz Darlehen an Gesellschafter als verbotene Auszahlung i.S. von § 30 GmbHG und Folgen für Bilanzierung und Berichterstattung DER BETRIEB (DB) 2004. 1273-75 ; Cahn Das richterrechtliche Verbot der Kreditvergabe an Gesellschafter und seine Folgen DER KONZERN 2004, 235-45 ;

Langner/Mentgen Aufsteigende Darlehen im physischen Cash Pooling und die neue Rechtsprechung des BGH 95 GmbH Rundschau (GmbHR) 1121-1127 (2004); Helmreich Die Gewährung von Darlehen durch die GmbH in der Situation der Unterbilanz an ihre Gesellschafter nach der aktuellen Rechtsprechung des BGH 95 GmbH Rundschau (GmbHR) 457-462 (2004); Reidenbach Cash Pooling und Kapitalerhalt nach neuer höchstrichterlicher Rechtsprechung WERTPAPIER-MITTEILUNGEN (WM) 2004, 1421-29; Schilmar Kapitalerhaltung versus Konzernfinanzierung? – Cash Pooling und Upstream-Besicherung im Lichte der neuesten BGH-Rechtsprechung DER BETRIEB (DB) 2004, 1411-16 ; Vetter Darlehen der GmbH an ihren Gesellschafter und Erhaltung des Stammkapitals BETRIEBS-BERATER (BB) 2004 1509-17; Wessels Aufsteigende Finanzierungshilfen in GmbH und AG ZEITSCHRIFT FÜR WIRTSCHAFTSRECHT (ZIP) 2004, 793-97.

–  –  –

of the GmbH in the amount of the registered share capital.6 Another central provision in this regard is the regulation contained in § 43a GmbHG on inadmissible loans.7 Above all, two legal questions arise in this context: firstly, the question whether or not the express strict prohibition against the granting of any loan from committed company assets to managing directors and people on a par with those individuals pursuant to § 43a GmbHG should and can be extended to a corresponding granting of a loan to shareholders by way of analogous application rationae personae (see I. below); and, secondly, whether and, if so, to what extent the payout prohibition pursuant to § 30 (1) GmbHG impedes the granting of a loan by a GmbH to its shareholders (see II. below).

I. Analogous Application of § 43a GmbHG to Shareholders?

The only explicit statutory boundary for the granting of a loan by a GmbH is found in the provision of the first sentence of § 43a GmbHG, inserted by the GmbHG Amendment 1980.8 The provision includes a textually-unrestricted prohibition against the granting of a loan from the assets necessary to preserve the registered share capital.9 What is restricted, however, is the area of applicability of that loangranting prohibition in a personal respect: it expressly only covers the granting of a loan to managing directors, other legal representatives, Prokuristen (i.e., holders of general signing powers) or authorised agents empowered regarding the entire business operation. In particular, the granting of loans to the GmbH’s shareholders which do not as such belong to the representatives of the GmbH is not expressly addressed. From a historical perspective, it is to be noted that on the occasion of the GmbHG Amendment 1980, the Federal Government rejected an inclusion of the shareholders in the sphere of addressees of the loan-granting prohibition, with the following rather remarkable explanatory statement: “A special regulation concerning loans from the company to shareholders should be refrained from [...], as in this regard the general regulation contained in § 30 GmbHG provides protection against impermissible loans.”10 6 § 30 (1) GmbHG provides: „The assets of the company required to preserve the registered share capital may not be distributed to the shareholders:“ 7 § 43a, sentence 1 GmbHG provides: „The assets of the company required to preserve the registered share capital may not be used to grant loans to managing directors, other legal representatives, Prokuristen (holders of general signing powers) and authorized signatories with powers extending to the whole business.“ See Amendment Act dated 04 July 1980; BGBl. I 1980 at 836.

For the text of § 43a GmbHG, see supra at note 5.

–  –  –

Notwithstanding, according to one opinion in the literature, the provision in § 43a GmbHG should be analogously applied to cases of the granting of loans to GmbH shareholders.11 In so doing, the proponents of an analogous application in no way mistake the contrary will of the historic legislator as expressed in the respective travaux préparatoires. However, the proponents of this viewpoint accuse the legislator of the GmbHG Amendment Act 1980 of not having given sufficient consideration to the structural difference between the capital maintenance principle and the payout prohibition on the one hand, and the principle of liquidity preservation on the other hand. According to this opinion, the general payout prohibition only covers the case where the company, in return for the cash-payout from the committed company assets, obtains a claim against the shareholder for repayment of a loan which is not a “full-value” claim, for example due to lacking creditworthiness of the shareholder. While if the claim of the company for repayment of the loan value is said to be “full-value” due to the creditworthiness of the shareholder, the general capital maintenance provisions, according to the narrow reading of § 30 (1) GmbHG, do not apply from the outset, due to lack of the existence of a payout. Rather, the credit transaction with the shareholder then constitutes a neutral asset exchange from the perspective of balance-sheet law.

For this reason, ultimately everything rests on the question as to which level of protection the general payout prohibition (pursuant to § 30 (1) GmbHG) provides in the area of the granting of loans to shareholders. This question shall now be pursued.

II. Granting of Loans to Shareholders in Light of the General Payout Prohibition, § 30 (1) GmbHG The debate about the problem on the basis of the (general) provisions for capital preservation usually consolidates into the question whether or not the granting of loans from committed company assets to a shareholder constitutes an “impermissible payout”. In the following, firstly some basic issues regarding the payout prohibition pursuant to § 30 (1) GmbHG shall be clarified on the foundations of the prevailing literature viewpoint (see 1. below), before addressing the special problem of granting loans to shareholders (see 2. below).


–  –  –

1. Payout Prohibition The payout prohibition pursuant to § 30 (1) GmbHG serves in the preservation of the company assets corresponding to the stated share capital as registered with the commercial register and reflected in the articles of association. Accordingly, the norm has been identified as a central creditor protection provision. The aim of the creditor protection is supposed to be achieved through a prohibition against the payout of company assets which are necessary for the maintenance of the minimum reserve in the amount of the registered share capital.

First of all, the term “payout” is not entirely clear. At the starting point, one might assume that the term “payout” is open to an extensive interpretation, taking the object and purpose of the payout prohibition into account. In this regard, the payout prohibition covers every reduction in the company assets. Payouts are consequently not solely monetary payments, but rather cash-value payments of all kinds for which no equivalent value consideration is given, and which reduce the company assets necessary for the maintenance of the registered share capital.

a) Balance-sheet-law approach

A further aspect is to be separated from the question of the existence of a payout in the broadly understood sense. This is the question whether or not the payment rendered entails capital-protection-relevant effects of such a kind that payouts appear to be impermissible. In this regard, the payout prohibition is made more specific and restricted by the predominant literature viewpoint. According to this prevailing opinion, a reduction in the company assets is (only) impermissible if an adverse balance or a level of debt of the company would be precipitated or exacerbated as a result.12 In particular, in this further contouring of the prohibition by the prevailing opinion, a balance-sheet-law approach is clearly expressed. Even for this reason alone, the provision was labelled in a trivialising manner by one author as a “balance-sheet-technical piggy bank.”13 A potential adverse balance is determined on the basis of the annual financial statements, in which a comparison is made between the net assets of the company and the registered share capital figure as reSee Goerdeler/Müller in HACHENBURG (ED.) KOMMENTAR ZUM GMBHG vol. I (§§ 1-34), 8th ed. § 30 at note 56 (1992); Heidinger in MICHALSKI (ED.) KOMMENTAR ZUM GMBHG VOL. I (2002) § 30 at note 13 in connection with note 30; Roth in ROTH /ALTMEPPEN (EDS.) GMBHG-KOMMENTAR 4TH ED. § 30 at note 6 (2003); each author provides further references.

–  –  –

corded in the commercial register. “Net assets” in this context refers to the assets14 minus the liabilities including the reserves.

According to this viewpoint, which one could describe as a theory of balance-sheet asset reduction, what is protected is the calculated value of the assets necessary for the maintenance of the registered share capital as determined in accordance with balance-sheet law.

b) Theory of the real asset reduction

That the payout prohibition is based on a strict balance-sheet based approach to the provision regarding the necessary company assets is, however, challenged in the literature at an early stage with substantial arguments. In particular, former Supreme Court judge Stimpel has called for “liberation” of the payout prohibition from balance-sheet thinking in a rather fundamental way.15 However, these basic issues raised by highly-reputed authors have found scarce affirmative expression in the established commentary literature.

2. Payout Prohibition and the Problem of Granting Loans to Shareholders

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