Previous exam
Question 1
Car producers notice that the end of a five year period of depression is dawning. In the Netherlands,
BMW plans to intensify production of the New Mini in Born, and in Spain, Toledo Sociedad Anónima
plans a far reaching restructuring of its activities as well. Toledo Sociedad Anónima is a public limited
liability company with registered office and head office in Spain. They also have a subsidiary in
France in the form of a private limited liability company called Toledo sárl.
The objective of Toledo Sociedad Anónima is twofold:
(i) Relocate business from Spain to France entirely;
(ii) Restructure the company into a French sárl, as allegedly French law is more ‘friendly’ towards its
own companies in relation to company creditors.
Both companies would like to fully integrate their joint businesses into one company, Toledo sárl at
the end remaining as sole company.
a. Is the operation described above feasible under EU law? Please explain how this can be achieved. (2
points)
b. Would it make any difference, in terms of the procedural steps to be taken, if Toledo sárl is owned
for 90% already by Toledo Sociedad Anónima. (2 points)
c. Imagine that Toledo Sociedad Anónima did not have a subsidiary in France, would it still be
possible for Toledo Sociedad Anónima to transfer its head office and registered office to France to
achieve its objective? Please give your answer on the basis of EU law. (4 points)
d. Suppose French law is more ‘friendly’ towards its own companies in relation to company creditors
indeed. What do you think about the argument put forward in doctrine that, at least potentially
speaking, law competition is more intense in the EU than in the US? (2 points)
, Question 2
Meradies is a car manufacturing company. The business is incorporated in the form of a public limited
liability company listed at the stock exchange. Meradies makes two types of cars, a small family car
and a four wheel drive. It has two separate production units, one for each car type. Two years ago
Meradies was in financial difficulties and issued new shares to amongst others, Tokyoto. Tokyoto,
also a public limited liability company and a competitor in the car manufacturing business, managed to
acquire 34,4% of the shares and voting rights in Meradies. At the time of this acquisition the articles of
association of Meradies were amended giving Tokyoto the possibility to appoint half of the members
of the board of directors. Tokyoto does not care so much about the family car that is produced by
Meradies but it is very much interested in the production of the four wheel drive. It puts the board
under pressure to sell the production unit responsible for the production of the four wheel drive to
Tokyoto. After lengthy negotiations, the board of directors of Meradies agrees to the sale. Mr Myaki
is, with 6% of the shares and voting rights, one of the smaller shareholders of Meradies. He is very
disappointed by the transfer of the production unit of the four wheel drive to Tokyoto and wants to
challenge Tokyoto`s recent behavior before the court. After all, the four wheel drive was, according to
Mr Myaki, the only valuable part of the business with prospects for the future which Tokyoto
managed to obtain and a very low price, far below the market price. Mr Myaki turns to you for advice:
a. Assume that Meradies and Tokyoto are Delaware companies and Delaware law would be fully
applicable: does Tokyoto have to take the interest of the company and the minority shareholder into
account according to the law of Delaware? Please also advice Mr Myaki on the burden of proof that
rests upon him as well as on his counterparty. (4 points)
b. Assume that both companies are Dutch limited liability companies, Dutch law being fully
applicable: please advise whether Tokyoto can pursue its own interest in general on the basis of Dutch
law. Please motivate your answer. (3 points)
Note: the next part of the question does not relate to the facts of the case mentioned above: Member
State X of the European Union has decided that it wants to enhance creditor protection in company
groups. In order to achieve this, there is a bill pending before parliament on the basis of which parent
companies can be held jointly and severally liable for certain debts of their subsidiaries. However,
some members of parliament are against this bill. They fear that the proposed rule will be detrimental
for the position of Member State X in the regulatory competition. Therefore, they propose to exempt
parent companies which have their seat outside the territory of the Member State from this joint and
several liability. The topic has led to fierce debate as some claim that such an exemption would be
discriminating and against EU law.
c. Would such an exemption be compatible with EU law? Please motivate your answer. (3 points)
Question 1
Car producers notice that the end of a five year period of depression is dawning. In the Netherlands,
BMW plans to intensify production of the New Mini in Born, and in Spain, Toledo Sociedad Anónima
plans a far reaching restructuring of its activities as well. Toledo Sociedad Anónima is a public limited
liability company with registered office and head office in Spain. They also have a subsidiary in
France in the form of a private limited liability company called Toledo sárl.
The objective of Toledo Sociedad Anónima is twofold:
(i) Relocate business from Spain to France entirely;
(ii) Restructure the company into a French sárl, as allegedly French law is more ‘friendly’ towards its
own companies in relation to company creditors.
Both companies would like to fully integrate their joint businesses into one company, Toledo sárl at
the end remaining as sole company.
a. Is the operation described above feasible under EU law? Please explain how this can be achieved. (2
points)
b. Would it make any difference, in terms of the procedural steps to be taken, if Toledo sárl is owned
for 90% already by Toledo Sociedad Anónima. (2 points)
c. Imagine that Toledo Sociedad Anónima did not have a subsidiary in France, would it still be
possible for Toledo Sociedad Anónima to transfer its head office and registered office to France to
achieve its objective? Please give your answer on the basis of EU law. (4 points)
d. Suppose French law is more ‘friendly’ towards its own companies in relation to company creditors
indeed. What do you think about the argument put forward in doctrine that, at least potentially
speaking, law competition is more intense in the EU than in the US? (2 points)
, Question 2
Meradies is a car manufacturing company. The business is incorporated in the form of a public limited
liability company listed at the stock exchange. Meradies makes two types of cars, a small family car
and a four wheel drive. It has two separate production units, one for each car type. Two years ago
Meradies was in financial difficulties and issued new shares to amongst others, Tokyoto. Tokyoto,
also a public limited liability company and a competitor in the car manufacturing business, managed to
acquire 34,4% of the shares and voting rights in Meradies. At the time of this acquisition the articles of
association of Meradies were amended giving Tokyoto the possibility to appoint half of the members
of the board of directors. Tokyoto does not care so much about the family car that is produced by
Meradies but it is very much interested in the production of the four wheel drive. It puts the board
under pressure to sell the production unit responsible for the production of the four wheel drive to
Tokyoto. After lengthy negotiations, the board of directors of Meradies agrees to the sale. Mr Myaki
is, with 6% of the shares and voting rights, one of the smaller shareholders of Meradies. He is very
disappointed by the transfer of the production unit of the four wheel drive to Tokyoto and wants to
challenge Tokyoto`s recent behavior before the court. After all, the four wheel drive was, according to
Mr Myaki, the only valuable part of the business with prospects for the future which Tokyoto
managed to obtain and a very low price, far below the market price. Mr Myaki turns to you for advice:
a. Assume that Meradies and Tokyoto are Delaware companies and Delaware law would be fully
applicable: does Tokyoto have to take the interest of the company and the minority shareholder into
account according to the law of Delaware? Please also advice Mr Myaki on the burden of proof that
rests upon him as well as on his counterparty. (4 points)
b. Assume that both companies are Dutch limited liability companies, Dutch law being fully
applicable: please advise whether Tokyoto can pursue its own interest in general on the basis of Dutch
law. Please motivate your answer. (3 points)
Note: the next part of the question does not relate to the facts of the case mentioned above: Member
State X of the European Union has decided that it wants to enhance creditor protection in company
groups. In order to achieve this, there is a bill pending before parliament on the basis of which parent
companies can be held jointly and severally liable for certain debts of their subsidiaries. However,
some members of parliament are against this bill. They fear that the proposed rule will be detrimental
for the position of Member State X in the regulatory competition. Therefore, they propose to exempt
parent companies which have their seat outside the territory of the Member State from this joint and
several liability. The topic has led to fierce debate as some claim that such an exemption would be
discriminating and against EU law.
c. Would such an exemption be compatible with EU law? Please motivate your answer. (3 points)
