What is 671b Criminal Code

Dr. Aldo C. Schellenberg, LL.M. Civil law liability of executives in the event of unbalanced asset shifts in a stock corporation

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1 Dr. Aldo C. Schellenberg, LL.M. Civil law liability of executives in the event of unbalanced asset shifts in the stock corporation law group Slightly modified version of the master’s thesis to obtain the Legum Magister LL.M. (Focus on commercial law) at the University of Bern Supervising lecturer: Prof. Dr. Peter Viktor Kunz 8703 Erlenbach, November 5, 2009

2 Table of contents Bibliography VI List of abbreviations XI 1 Introduction 1 2 The group 2 I. Terms 2 1. Concept of the group 2 2. Terminology for the individual group members 3 II. Legal coverage 3 III. Problem 4 1. Introduction 4 2. Uniform management 4 3. Position of minority shareholders 5 4. Liability 5 3 Unbalanced asset shifts in the group 7 I. Significance of unbalanced asset shifts 7 1. Overview 7 2. Concept of unbalanced asset shift 8 a) Inconsistent terminology 8 b ) Criterion of imbalance 8 II. Problem principle of freedom of contract Barriers to protection of creditors 11 a) Starting position 11 b) Protection instruments of creditors 12 aa) Protection of creditors from compulsory forms and fixation of forms 12 bb) Protection of creditors from the power of representation of executives 13 cc) Protection of creditors from securing the raising of capital and - conservation 14 I.

3 Table of contents dd) Protection of creditors from publicity and accounting regulations 16 ee) Conclusion Limits to the protection of minorities 17 a) Starting position 17 b) Instruments of protection for minority shareholders 18 aa) Protection of minorities vis-à-vis the dependent company for corporate purposes 18 bb) Protection of minorities vis-à-vis the dependent company from the principle of equal treatment 20 cc ) Protection of minorities vis-à-vis the ruling company from the prohibition of hidden profit distribution 21 dd) Protection of minorities vis-à-vis the ruling company due to duty of loyalty 22 ee) Legal actions by minority shareholders 22 ff) Conclusion 23 III. Liability in the event of an unbalanced shift of assets in general Initial situation Liability of the controlling company 25 a) Principle of lack of liability in the capacity as a shareholder 25 b) Liability as a body of the dependent company 25 c) Liability from intervention 27 d) Liability from group trust Liability of the executives of the controlling company Liability of the dependent company Liability of the executives of the dependent company 30 II

4 Contents 4 Liability of executives in the event of unbalanced asset shifts in the group 31 I. Introduction 31 II. Active legitimation Introduction Direct and indirect damage Active legitimation in the case of direct damage 32 a) Active legitimation of the company 32 b) Active legitimation of shareholders and creditors Active legitimation in the case of indirect damage 33 a) Active legitimation before bankruptcy commencement 33 aa) Active legitimation of the shareholder 33 bb) Active legitimation of the obligee 33 b) Active legitimation after opening of bankruptcy 34 aa) Active legitimation of the shareholder 34 bb) Active legitimation of the obligee 34 III. Passive legitimation Introduction Formal organs Material or factual organs Organ as a result of announcement 36 IV. Damage Introduction Proof of damage and damage calculation Damage from unbalanced transfers of assets 37 III

5 Table of Contents V.

6 Table of Contents VI. Causal connection 54 VII. Fault Introduction Fault in collective decisions 56 a) Problem 56 b) Fault in opposition 56 c) Fault in absence 57 d) Fault of several managers 57 5 Concluding remarks 59 V

7 Bibliography Bibliography ALBERS-SCHÖNBERG, MAX: Liabilities in the Group, Dissertation Zurich 1980 [quoted: ALBERS-SCHÖNBERG 1980] AMSTUTZ, MARC: Musique plurielle: Thoughts on corporate liability law, in: Niggli, Marcel Alexander / Amstutz, Marc (ed .): Responsibility in the company. Civil and criminal law perspectives, Basel 2007, S [quoted: AMSTUTZ 2007] BÄRTSCHI, HARALD: Responsibility in Stock Corporation Law, Diss. Zurich 2001 [quoted: BÄRTSCHI 2001] BAUEN, MARC / VENTURI, SILVIO: The Board of Directors, Zurich / Basel / Geneva 2007 [cited: BAUEN / VENTURI 2007] BERTSCHINGER, URS: Division of labor and stock corporation law responsibility, Zurich 1999 [cited: BERTSCHINGER 1999] BLUM, OLIVER: Cash Pooling: Corporate Law Aspects, AJP 2005, S [cited: BLUM 2005] BÖCKLI, PETER: Swiss company law, 4th A. Zurich / Basel / Geneva 2009 [quoted: BÖCKLI 2009] BRATSCHI, BERNHARD: The position of the free shareholder in the group, Diss. Bern 1996 [quoted: BRATSCHI 1996] BRECHBÜHL, BEAT: liability from aroused group trust, Diss. Bern 1998 [quoted: BRECHBÜHL 1998] BÜRGI, WOLFHART F./NORDMANN-ZIMMERMANN, URSULA: Die Aktiengesellschaft, Volume V / 5b / 3, Zurich 1979 [quoted: BÜRGI / NORDMANN-ZIMMERMANN 1979] DRUEY, JEAN NICOLAS / VOGEL , ALEXANDER: Swiss group law in the P Practice of the Courts, Zurich 1999 [quoted: DRUEY / VOGEL 1999] EUGSTER, KARIN / VON DER CRONE, HANS CASPAR: Legal position of the managing director in the group, SZW 76 (2004), S [quoted: EUGSTER / VON DER CRONE 2004] VI

8 Bibliography FORSTMOSER, PETER: Schweizerisches Aktienrecht, Volume I, Zurich 1981 [quoted: FORSTMOSER 1981] FORSTMOSER, PETER: Die Aktienrechtliche Responslichkeit, 2. A. Zurich 1987 [quoted: FORSTMOSER 1987] FORSTMOSER, PETER: Liability in the group, in: Baer, ​​Charlotte M. (Ed.): From company law to corporate law, Bern 2000, S [quoted: FORSTMOSER 2000] FORSTMOSER, PETER / MEIER-HAYOZ, ARTHUR / NOBEL, PETER: Schweizerisches Aktienrecht, Bern 1996 [quoted: FORSTMOSER / MEIER-HAYOZ / NOBEL 1996] FORSTMOSER, PETER / SPRECHER, THOMAS / TÖNDURY, GIAN ANDRI: Personal liability under Swiss company law. Risks and their minimization, Zurich / Basel / Geneva 2005 [quoted: FORSTMOSER / SPRECHER / TÖNDURI 2005] GARBARSKI, ANDREW M .: La responsabilité civile et pénale des organes dirigeants de sociétés anonymes, Geneva 2006 [quoted: GARBARSKI 2006] GAUCH, PETER / SCHLUEP, WALTER / SCHMID, JÖRG: Swiss Code of Obligations General Part, Volume I, 9. A. Zurich / Basel / Geneva 2008 [quoted: GAUCH / SCHLUEP / SCHMID 2008] GAUTSCHI, GEORG: Fiduciary legal relationships of a special kind, SJZ 45 (1949 ), S [quoted: GAUTSCHI 1949] GRAF, HANSJÖRG: Contracts between group companies, with special consideration of restructuring services and hedging transactions, Diss Bern 1988 [quoted: GRAF 1988] GRASS, ANDREA R .: Business Judgment Rule, Diss. Zurich 1998 [quoted : GRASS 1998] HABLÜTZEL, OLIVER: Solidarity in responsibility under stock corporation law, Diss. St. Gallen 2009 [quoted: HABLÜTZEL 2009] HANDSCHIN, LUKAS: The group in current Swiss private law, Zurich 1994 [quoted: HANDSCHIN 1 994] HANDSCHIN, LUKAS: Some considerations on cash pooling in the group, in: Bohnet François / Wessner, Pierre (ed.): Mélanges en l honneur de Roland Ruedin, Basel / Geneva / Munich 2006, p [cited: HANDSCHIN 2006] VII

9 Bibliography HOMBURGER, ERIC: On penetration in Swiss company law, SJZ 67 (1971), S [quoted: HOMBURGER 1971] HONSELL, HEINRICH / VOGT, NEDIM PETER / WIEGAND, WOLFGANG (EDITORS): Basler Commentary, Obligationenrecht I, Art OR , 4. A. Basel 2007 [quoted: BSK OR I - BEARBEITER] HONSELL, HEINRICH / VOGT, NEDIM PETER / WATTER, ROLF (EDITORS): Basler Commentary, Obligationenrecht II, Art OR, 3. A. Basel 2008 [quoted : BSK OR II - EDITOR] JÄGGI, PETER: Unsolved questions of stock corporation law, SAG 1958/59, S [quoted: JÄGGI 1958] JÄGGI, PETER: Von der atypischen Aktiengesellschaft, in: Gauch, Peter / Schnyder, Bernhard (ed.) : Private law and the state. Collected essays, Zurich 1976, S [quoted: JÄGGI 1976] JAGMETTI, LUCA: Cash Pooling in the Group, Diss. Zurich 2007 [quoted: JAGMETTI 2007] JÖRG, FLORIAN S .: Old and new on corporate law, in: Arter, O- liver / jörg, Florian S. (Ed.): Developments in company law II, Bern 200, S [quoted: JÖRG 2007] JÖSLER, MAJA DOMENICA: Legal dispute between organs and board members, Diss. St. Gallen 1998 [quoted: JÖSLER 1998] KUNZ, PETER V .: The protection of minorities in Swiss company law. A corporate law study on the current legal status combined with retrospective and foresight as well as comparative legal information, Bern 2001 [cited: KUNZ 2001] KUZMIC, KRISTINA: liability from corporate trust, dissertation Zurich 1998 [cited: KUZMIC 1998] LAZOPOULOS, MICHAEL: Conflicts of interest and responsibility of the fiduciary board of directors, dissertation Zurich 2004 [quoted: LAZOPOULOS 2004] MEIER-HAYOZ, ARTHUR / FORSTMOSER, PETER: Swiss company law, 10. A. Bern 2007 [quoted: MEIER-HAYOZ / FORSTMOSER, 2007] VIII

10 Bibliography MÜLLER, ROLAND / LIPP, LORENZ / PLÜSS, ADRIAN: The Board of Directors. A handbook for practice, 3rd A. Zurich / Basel / Geneva 2007 [quoted: MÜLLER / LIPP / PLÜSS 2007] MÜLLER, THOMAS: Solidarity in corporate law responsibility Progress or system break? in: von Büren, Roland (Hrsg.): Aktienrecht: An attempt at a balance sheet. On the 70th birthday of Rolf Bär, Bern 1998, S [quoted: MÜLLER 1998] NENNINGER, JOHN: The protection of the minority in the stock corporation according to Swiss law, Diss. Basel 1974 [quoted: NENNINGER 1974] NEUHAUS, MARKUS: The taxation of Share earnings, Diss. Zurich 1988 [quoted: NEUHAUS 1988] NiGGLI, MARCEL A./WIPRÄCHTIGER, HANS (HRSG.): Basler Commentary, Criminal Law II, Art StGB, 2. A. Basel 2007 [quoted: BSK Criminal Law II - BEARBEI- TER] NIKITINE, ALEXANDRE: Corporate responsibility under stock corporation law according to Art. 754 para. 1 OR as a consequence of wrong entrepreneurial decisions, Diss. Zurich 2007 [quoted: NIKITINE 2007] OECD: Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, Paris 1995 (in the current 2001 version) [quoted: OECD 1995] OFTINGER, KARL / STARK, EMIL W .: Swiss Liability Law, Volume I: General Part, 5. A. Zurich 1995 [quoted: OFTINGER / STARK 1995] RASCHEIN, ROLF: The assignment of liability under stock corporation law Claims in bankruptcy, in: Dallèves, Louis / Kleiner, Beat / Krauskopf, Lutz / Raschein, Rolf / Schüpbach, Henri / Conference of debt enforcement and bankruptcy officials in Switzerland (ed.): Festschrift 100 years SchkG, Zurich 1989, p : RASCHEIN 1989] REY, HEINZ: Non-contractual liability law, 4th A. Zurich 2008 [quoted: REY 2008] RUBLI, ARMAND: Restructuring measures in the group from a corporate law perspective, Diss. Zurich 2002 [quoted: RUBLI 2002] IX

11 Bibliography SCHANZE, ERICH: Group-specific creditor protection: Comparison of the regulatory approaches, in: Mestmäcker, Ernst-Joachim / Behrens, Peter (ed.): Corporate law of corporations in international comparison, Baden-Baden 1991, p [quoted: SCHANZE 1991] SCHUBARTH , MARTIN: Corporate Criminal Law: Concealed Advantages Corporate Restructuring Corporate Liability Corporate Liability, in: Ackermann, Jürg- Beat / Wohlers, Wolfgang (Ed.): Extensive White-collar Criminal Proceedings in Theory and Practice, 2nd Zurich Conference on White-collar Criminal Law, Zurich 2008, p [quoted: SCHUBARTH 2008 ] SCHUBARTH, MARTIN / PETER, HENRY: The significance of the Swissair judgments of the Bülach District Court for corporate criminal law, SZW 80 (2008), S [quoted: SCHUBARTH / PETER 2008] VETTER, MEINRAD: The concept of an organ under Art. 754 para. 1 OR, Diss. Zurich 2007 [quoted: VETTER 2007] VOGEL, ALEXANDER: The liability of the parent company as a material, factual and announcing body of the subsidiary with a comparative legal overview of other group liability approaches, Diss. St. Gallen 1997 [cited: VOGEL 1997] VON BÜREN, ROLAND: The Group, Swiss Private Law Volume VIII / 6, 2. A. Basel / Geneva / Munich 2005 [cited: VON BÜREN 2005] VON GRAFFENRIED, ANDRÉ: On the need for group legislation: the regulation of the European stock corporation as an example? Diss. Bern 1976 [quoted: VON GRAFFENRIED 1976] VON GREYERZ, CHRISTOPH: Die Aktiengesellschaft, Swiss Private Law Volume VIII / 2, Basel / Frankfurt am Main 1982, S [quoted: VON GREYERZ 1982] VON PLANTA, FLURIN: The conflict of interests of the board of directors of the dependent group company, Diss. Zurich 1988 [quoted: VON PLANTA 1988] ZÜRCHER, WOLFGANG: The protection of creditors in the Swiss corporation, Diss. Zurich 1993 [quoted: ZÜRCHER 1993] X

12 List of Abbreviations List of Abbreviations A. Edition Paragraph AG AJP Art. BankG BBl Paragraph Aktiengesellschaft Current legal practice, laughter Article BG on banks and savings banks of 8 November 1934 (SR 952.0) Federal Gazette BEHG BG on stock exchanges and securities trading of 24 March 1995 (SR 954.1) BewG BG BGE BSK or ie Dissertation BG on the acquisition of real estate by persons abroad of December 16, 1983 (SR) Federal law decisions of the Swiss Federal Court, Lausanne Basel Commentary or that means dissertation E. Recital (en ) E-OR draft for the amendment of the Code of Obligations according to the message on the amendment of the Code of Obligations of December 21, 2007 (BBl) f. Following (r) ff. FN following footnote (s) XI

13 List of Abbreviations FusG according to GmbH i.d.r. i.s. i.s.v. i.v.m. especially KAG M m.a.w. m.e. with further information BG on merger, demerger, conversion and transfer of assets dated October 3, 2003 (SR) according to a limited liability company as a rule in the sense of in connection with in particular BG on collective investment schemes of June 23, 2006 (SR) parent company with others Words in my opinion with further information MWSTG BG of September 2, 1999 on Value Added Tax (SR) N OECD OR PS Note (s), margin note (s) Organization for Economic Co-Operation and Development BG regarding the amendment to the Swiss Civil Code (Part Five : Code of Obligations) of March 30, 1911 (SR 220) Swiss Auditing Standards PüG Price Surveillance Act of December 20, 1985 (SR) page (s) SAG SchKG SJZ Swiss Corporation, Zurich BG on Debt Collection and Bankruptcy of April 11, 1889 (SR 281.1 ) Schweizerische Juristen-Zeitung, Zurich XII

14 List of abbreviations so-called SR ST StGB SZW T, among others, see e.g. so-called Systematic Collection of Federal Law, Bern Der Schweizer Treuhänder. Monthly journal for auditing, accounting, corporate and tax advice Swiss Criminal Code of December 21, 1937 (SR 311.0) Swiss Journal for Business Law, Zurich Subsidiary, among other things / among other things, especially compare e.g. ZGB Swiss Civil Code of December 10, 1907 (SR 210) Clause Number (s) XIII

15 1 Introduction 1 Introduction This thesis deals with the civil law aspects of unbalanced asset shifts within a corporation law group and focuses on the personal liability of executives in such transactions. In terms of contract law, group companies are fundamentally free to conclude unbalanced contracts with one another. However, there is a latent risk of harming the interests of minority shareholders and creditors of the society that is disadvantaged by an imbalanced transaction. In the first part of the thesis (2) the concept of the group and its legal coverage is explained and the problems associated with it are pointed out in a general way. The second part (3) deals in detail with the nature and problem of unbalanced asset shifts. It is a matter of showing the protective instruments of the creditors and minority shareholders of the group company disadvantaged by the transaction and their protective content as well as explaining the most important liability bases with a view to unbalanced shifts of assets. If these protective rights come to nothing and if the shareholders and creditors of the company disadvantaged by the transaction are actually harmed, the question of the liability of the executives involved arises. This problem is the subject of the third part of the thesis (4). The prerequisites for a claim to responsibility vis-à-vis executives in accordance with Art. 754 et seq. OR are shown in detail and attention is drawn to the peculiarities and restrictions that must be observed in connection with unbalanced shifts in assets. A few concluding remarks round off the work (5). 1

16 2 The group 2 The group I. Definitions 1. Concept of group Because there is no systematic group law in Switzerland, there is also no uniform group concept 1. With Art. 663e para. 1 CO, the legislator has a company law from the point of view of accounting Group term created, but this provision was deliberately formulated openly in order to leave the necessary clarifications to doctrine and jurisprudence 2. The conceptual definition of the group is made more difficult by the fact that the group is defined differently in different areas of law. For example, there are also descriptions of the group in Art. 22 Para. 1 VAT Act or Art 4. After all, the definition of Art. 663e Paragraph 1 OR as well as the various approaches of the doctrine to the description of the group expressly or tacitly consistently express that the group is essentially characterized by three characteristics 5: (1) the combination of civil law independent companies, (2) the uniform management 6 of these instead of many: VON BÜREN 2005, p. 5; ALBERS-SCHÖNBERG 1980, p. 7 with further detailsBBl 1983 II, S On this and the whole: VON BÜREN 2005, pp. 5 ff. Cf. for example BÖCKLI 2009, 11 N 3; FORSTMOSER / MEIER-HAYOZ / NOBEL 1996, 60 N 10; HANDSCHIN 1994, p. 21; VON PLANTA 1988, p. 11; VOGEL 1997, p. 151 f; DRUEY / VOGEL 1999, p. 5; VON BÜREN 2005, p. 16. See instead of many: JÖRG 2007, p. 26 with further details. It is deliberately left open here whether the actual exercise of uniform management is a necessary prerequisite for the modern concept of a group, or whether the mere possibility of determining the business and financial policy of a company is sufficient to justify a dependency relationship that constitutes a group (so-called . Control Concept). See e.g. Art. 963 E OR and KUNZ 2001, 14 N 14 ff. 2

17 2 The group company and (3) the economic unit formed by the merger. 2. Terminology for the individual group members The terms used in law, teaching and case law for the individual group members are extremely diverse 7. The following terms apply in this work: The term group company is understood to mean all companies that together form the group. The terms controlling company, parent company and group parent company (as synonyms) are used for the legally independent top company which directly or indirectly exercises or could at least exercise uniform management over the group companies. The companies controlled by a group parent company are in turn referred to synonymously as dependent companies, subsidiaries or group subsidiaries. II. Legal coverage Corporations are considered to be an economic reality, but there is no group law code in Switzerland 8.Nevertheless, there is Swiss group law, which is composed of the entirety of the legal norms applicable to corporations, the numerous doctrines and relevant prejudices 9. The group law is supplemented through private legal structuring A detailed discussion of the various terms can be found in VON BÜREN 2005, pp. 5 ff. Instead of many: KUNZ 2001, 14 N 1; BÖCKLI 2009, 11 N 1. BÖCKLI 2009, 11 N 2; KUNZ 2001, 14 N 1; FORSTMOSER / MEIER-HAYOZ / NOBEL 1996, 60 N 21. The most important legal norms to be mentioned are, based on FORSTMOSER / MEIER-HAYOZ / NOBEL N 17 ff. And MEIER-HAYOZ / FORSTMOSER 2007, 24 N 41: Art. 663e ff. , Art. 663a in connection with Art. 633b No. 7 and Art. 659b OR as well as Art. 20 and 32 SESTA. Information on the relevant literature and case law can be found in KUNZ 2001, 14 FN 4. See MEIER-HAYOZ / FORSTMOSER 2007, 24 N 81 ff. 3

18 2 The Group III. Problem 1. Introduction The grouping as a combination of several legally independent persons into one economic unit brings with it considerable legal problems 11. All of these problems are essentially due to two circumstances: On the one hand, the controlled companies are subject to external control by being classified in a group structure, which leads to a de facto restriction of their independence and freedom of choice 12; on the other hand, due to the only partial legal regulation, there are no clear and uniform guidelines for assessing group-specific questions. The most important issues under corporate law are briefly discussed below. 2. Uniform management Swiss law adopts a contradictory position on uniform management within the group 13. On the one hand, uniform management is expressly stated as a characteristic of the group in Art. 663e (1) OR, on the other hand, there are mandatory legal provisions for the actual exercise of uniform management contrary to 14. In practice, various measures are being taken to find a way out of this dilemma. In this context, JÖRG speaks of a balancing act in corporate law or an insoluble contradiction that leads to a patchwork of corporate law that does not result in a pleasing pattern (JÖRG 2007, p. 31 ff.). In the following, a so-called subordinate group is assumed, which in practice is probably the most significant form of corporation. See LAZO-POULOS 2004, p. 61; FORSTMOSER / MEIER-HAYOZ / NOBEL 1996, 60 N 12; MEIER-HAYOZ / FORSTMOSER 2007, 24 N 37. On this and on the whole: VON BÜREN 2005, p. 58; FORSTMOSER / MEIER-HAYOZ / NOBEL 1996, 60 N 27 ff .; MEIER-HAYOZ / FORSTMOSER 2007, 24 N 45 ff; JÖRG 2007, p. 31 ff. Mention should in particular be made of Art. 716a, Paragraph 1, Item 1 OR, according to which the board of directors of the respective group company is responsible for their overall management, as well as Art. 717, Paragraph 1 of the OR, which obliges the Board of Directors to implement the To protect the interests of (one's) society in good faith. Based on FORSTMOSER / MEIER-HAYOZ / NOBEL 1996, 60 N 33 ff., MEIER-HAYOZ / FORSTMOSER 2007, 24 N 48 f. And JÖRG 2007, p. 34 f., The following 4

19 2 The Group With a view to the responsibility of executives of dependent companies, however, the concept of the double nexus of duties must be observed 16. According to this, the duties towards the (own) company generally take precedence over the instructions of the controlling company 17. M.a.W. A board of directors may only comply with the requirements of the parent company if there is a margin of appreciation with regard to the decision in question. Position of the minority shareholders If the controlling company is not the sole shareholder of the controlled company, the question arises of how the grouping will affect the minority shareholders of the dependent company. The free shareholder of a group subsidiary cannot simply assume that the decisions of the board of directors will be made in the interests of the company. Rather, the grouping of a company is actually linked to the obligation to act in the interests of the ruling company, which can have a disadvantageous or even damaging effect on the independent shareholders 19 The dogmas of the legal personality of the (group) companies and the limited liability measures applicable under Swiss company law are in the foreground: (1) it is often stated in the statutes of the dependent companies that the purpose is carried out in the interests of the group; (2) Internal regulations are often issued (in particular organizational regulations), with which the basis for direct instructions is laid and (3) trust agreements are regularly concluded in which the boards of directors of the subsidiaries undertake to follow instructions from the parent company, but they do there is also an assurance that they will be held harmless in the event of a liability suit. Already GAUTSCHI 1949, p. 303; but also LAZOPOULOS 2004, pp. 70 ff. and 79 ff. or MEIER-HAYOZ / FORSTMOSER 2007, 24 N 51. MEIER-HAYOZ / FORSTMOSER 2007, 24 N 51; LAZOPOULOS 2004, p. 79. On this and m.w.h. (especially on the concept of discretion): LAZOPOULOS 2004, p. 79 f. VON BÜREN 2005, S KUNZ 2001, 14 N 21; cf. also VON BÜREN 2005, S cf. back: 3 II. 3. 5

20 2 The grouping of its shareholders also applies to groups 22. According to this, liability of the controlling company for the liabilities of dependent companies is fundamentally excluded on the basis of Art. 620 Para. 2 OR 23. Consistent implementation of this liability regime in group relationships leads to a Liability segmentation 24, which can lead to negative results for the enforcement of claims against the group 25. Based on this problem and against the background that there are no group-specific liability rules in Swiss law, a wide variety of approaches to liability in the group have been developed in teaching and practice VON BÜREN 2005, p. 174; FORSTMOSER / MEIER-HAYOZ / NOBEL 1996, 60 N 39; MEIER-HAYOZ / FORSTMOSER 2007, 24 N 55. FORSTMOSER / MEIER-HAYOZ / NOBEL 1996, 60 N 39; MEIER-HAYOZ / FORSTMOSER 2007, 24 N 55. VON BÜREN 2005, S VON BÜREN 2005, p. 174 with an illustrative example. An overview of the different approaches can be found below: 3 III. 6th

21 3 Unbalanced asset shifts in the group 3 Unbalanced asset shifts in the group I. Significance of unbalanced asset shifts 1. Overview The economic interdependence between the group companies that is typical for corporate relationships regularly leads to the horizontal and vertical exchange of services 27.Examples of such services are intra-group deliveries, agreements on intellectual property rights, Management services and other central services such as research and development as well as the granting of guarantees, sureties and third-party pledges 28. If the service and consideration correspond to an intra-group transaction, a balanced and therefore harmless transaction is present. If an exchange of services is designed in such a way that it leads to a unilateral shift of assets in favor of one company, there is an unbalanced transaction and there is a risk that creditors and minority shareholders of the other company will be harmed 29 Motives to be attributed 30. The question of the imbalance in group-internal service provision and the resulting legal consequences typically arises with the transfer prices applied for group-internal deliveries and services, with restructuring services of a group company in favor of another ailing company A horizontal exchange of services takes place between group companies of the same hierarchy level, a vertical exchange of services between group companies of different hierarchy levels. See JÖRG 2007, p. 41 f. And p. 48 ff. And in general GRAF 1988, p. 137 ff. SCHUBARTH 2008, passim. According to NEUHAUS 1988, p. 92 ff., From an economic point of view, (unbalanced) asset shifts often serve to balance the business results of individual group companies or to reorganize weak companies. The tax incentives are, for example, that intra-group transactions break progression peaks or that otherwise lost loss carryforwards can still be used. 7th

22 3 Unbalanced asset shifts within the group as well as in the context of cash pooling, which is often found in corporate relationships 31. The problem of such unbalanced asset shifts is the subject of the following explanations. Concept of unbalanced asset shifts a) Inconsistent terminology The terminology used in teaching and legislation to describe unilateral asset shifts is by no means uniform 33. In order to avoid terminological confusion, the term imbalanced asset shift is used here deliberately. This includes all transactions between group companies in which performance and consideration are disproportionate 34. b) Criterion of imbalance From a tax point of view, imbalanced shifts of assets are so-called benefits in kind 35. This is the case if the following cumulative conditions are met 36: (1) A service is provided that is not matched by adequate consideration, so that the service results in a withdrawal of company funds or a reduction in the business results shown in the income statement, (2) the service becomes a shareholder or a persons close to him are favored insofar as the service to an outside third party is The problem of restructuring and cash pooling is deepened in connection with the duties of the board of directors. See below: 4 V. 2. b) bb) and 4 V. 3. b) bb). Often, intra-group transactions involve self-dealing in the form of double representation, which is generally permissible, but creates an additional problem in the case of conflicts of interest that is not dealt with further here (cf. See the detailed description in VON BÜREN 2005, p. 160 f. HANDSCHIN 1994, p. 115 f. Also called hidden profit distribution or profit anticipation (BGE 113 Ib 23, Regeste). See for example BGE 82 I 288 E II.1; BGE 105 Ib 84 E. 2a; BGE 107 Ib 325 E. 3c and BGE 113 Ib 23 E. 2. 8

23 3 unbalanced asset shifts in the group would have been significantly lower and the performance is therefore unusual and cannot be reconciled with appropriate business conduct and (3) the disproportion between performance and consideration must have been recognizable for the corporate bodies involved so that it can be assumed that it was a favor was intended. In private law, the provision of Art. 678 Para. 2 OR is in the foreground with a view to unilateral contracts in corporate relationships 37. To assess the imbalance of a transaction in the broader sense. This provision is primarily based on whether the transaction in question would have been concluded with an outside third party on the same terms 38. Here, primarily market conditions are to be taken as a basis 39. In the case of intra-group transactions, a market comparison helps in the broader sense. of the dealing at arms length principle, however, because there is typically no active market 40 for corresponding transactions or the market price would also have to take into account the group-specific situation of the parties involved 41. If there is no active market for a service, the Appropriateness of performance and consideration should be based on auxiliary criteria 42. VON BÜREN sees the effect of the transaction on the profitability of the companies involved as an important indicator of the balance between performance and consideration in the context of an intra-group transaction. In addition, according to FORSTMOSER / MEIER-HAYOZ / NOBEL 1996, 50 N 120, the doctrine and jurisprudence of Article 21 OR (overreaching) must also be used; instead of many: BSK OR I - HUGUENIN, Art. 21 N 5 ff. BSK OR II - KURER, Art. 678 N 14. BSK OR II - KURER, Art. 678 N 14; VON BÜREN 2005, p. 162; HANDSCHIN 1994, p. 115 f. An active market in the sense used here is characterized by the fact that the following criteria are met cumulatively: (1) the products and services traded on the market are homogeneous, (2) willing buyers and sellers can be found at any time and (3) the prices are known to all potential market participants. SCHUBARTH 2008, N 51; also NEUHAUS 1988, S NEUHAUS 1988, p. 205; BSK OR I - HUGUENIN, Art. 21 N 6. 9

24 3 unbalanced shifts in assets in the group counter performance, which a company receives for a service, at least lead to the expectation of a pecuniary benefit 43. Article 678 (2) OR, according to which a service is not only in an apparent disproportion to the consideration, but also aims in this direction must also be about the economic situation of the company so that it is subject to reimbursement 44. In essence, this also corresponds to the guidelines of the OECD for setting transfer prices in multinational companies. The methods proposed by the OECD are all implicitly based on the basic idea that the performance and consideration of a transaction should give the companies involved an appropriate opportunity for profit. Specifically, the OECD proposes the following methods of transfer pricing if no market price can be determined 45: (1) Determination of the prices that are charged for the same product between third parties under conditions that are as similar as possible (comparable uncontrolled price method), (2 ) Determination of the achievable resale price to third parties less an appropriate profit margin (resale price method or resale price method), (3) Determination of the costs of the service plus an appropriate profit margin (cost plus method or cost plus method). An application of the criteria according to Art. 13 PüG 46 is also conceivable. From a corporate law perspective, such auxiliary criteria are merely guidelines of a fundamental nature, which are only to be understood as general guidelines 47. In order to assess the balance of a service, this requires Ultimately, the reason is always an assessment of the individual case. 48. Von BÜREN 2005, S According to BSK OR II - KURER, Art. 678 N 16, however, it is not necessary that the transaction actually endanger the economic situation of the company, but rather a noticeable economic one Effect is sufficient; similarly also BÖCKLI 2009, 12 N 556 f. Cf. in particular OECD 1995, chapter II. BSK OR I - HUGUENIN, Art. 21 N 6. Cf. NEUHAUS 1988, S Information on the individual criteria can also be found in BSK OR I - HUGUENIN, Art. 21 N 6 and in VON BÜREN 2005, S VON BÜREN 2005, p

25 3 Unbalanced shifts of assets in the group, based on Art. 678, Paragraph 2 OR, it must be taken into account that a shift of assets is only considered unbalanced if the performance is obviously disproportionate to the consideration. With the phrase, the legislature obviously wanted to prevent petty recalculation 49. II. Problem 1. Principle of freedom of contract Based on the principle of freedom of contract, it should be noted that the companies involved in an intra-group transaction are fundamentally free to determine the performance and consideration of a legal transaction. Of course, the mandatory barriers of Art. 19 and 20 OR as well as Art. 27 ZGB must be observed, but unbalanced shifts of assets within this framework are generally permissible.However, because unbalanced shifts of assets in the group can endanger the interests of creditors and / or minority shareholders, restrictions under stock corporation law must also be observed when structuring intra-group transactions legal person as the debtor, but this is subject to external control due to the control situation within the group 51. The debtor is therefore not an isolated legal entity, but a company that interacts with other affiliated companies in a variety of ways 52. For the creditors of a group company there is a latent danger that the BBl 1983 II, p. 897; BSK OR II - KURER, Art. 678 N 17 and HUGUENIN (BSK OR I - HUGUENIN, Art. 21 N 5): The term obviously makes it clear that the inequality of the exchange service is obvious to everyone (BGE 53 II 488; 46 II 60) must. SCHUBARTH 2008, N 16. ZÜRCHER 1993, p. 12. VON BÜREN 2005, p

26 3 unbalanced shifts of assets in the group company can be withdrawn from the liability substrate due to unbalanced shifts of assets within the group 53. In order to protect his interests, the creditor is entitled to various means of protection, which are primarily of the nature of stock corporation law, but which have been specified with regard to group-specific structures 54 From the perspective of the group companies involved (or their executives), the protective instruments of the creditors represent barriers that must be observed in the context of intra-group shifts of assets 55. b) Protective instruments of the creditors aa) Creditor protection from compulsory forms and fixed forms in the interest of legal and traffic safety and thus, also in the interests of protecting creditors, the legislature provides a numerus clausus of company forms in company law (mandatory forms) 56, the content of which is restricted due to mandatory norms ( Form fixation) 57. Within the scope of the freedom of design granted by the law, however, atypical structures can be set up, some of which deviate considerably from the basic legal concept 58. This problem is shown on the basis of the legislative model of the AG as an independent company managed in its own interest 59. A look in the legal reality, however, shows that numerous stock corporations are integrated into groups and therefore the legislative ZÜRCHER 1993, p. 10. VON BÜREN 2005, p. 153; ZÜRCHER 1993, p. 13. In this sense, SCHUBARTH 2008, N 29 ff. The various forms of company have their basis in the OR (simple company, general partnership, limited partnership, AG, limited partnership, GmbH and cooperative), in the ZGB (association) and in the KAG (limited partnership for collective capital investments and investment company with variable capital). Instead of many: MEIER-HAYOZ / FORSTMOSER 2007, 11 N 2 ff. ZÜRCHER 1993, p. 29. Instead of many: ZÜRCHER 1993, p. 135 m.w.h .; MEIER-HAYOZ / FORSTMOSER 2007, 24 N.

27 3 Unbalanced asset shifts in the group model is not realized 60. For this reason, dependent group companies are rightly described as a textbook example of atypical companies 61. According to JÄGGI, no consideration must be given to type deviations when interpreting the law 62. According to this view, the creditor has one Group company guarantee that the court has to orientate itself on the legal model of the AG as an independent and profit-making company. The more recent legal development now seems to be turning away from this paradigm 63. VON BÜREN speaks of a partial abandonment of the material unity of company law by law and judicature and concludes from this that the concrete structure of the company must be taken into account 64. This development results in the latent one There is a risk that the creditor protection function of the principles of compulsory forms and the fixation of forms, especially with regard to group companies, will be weakened. bb) Creditor protection from the power of representation of the executives The power of representation of the executives of a group company, ie their legal ability, results from Art. 718a Para. 1 OR 65. According to this, the persons authorized to represent are authorized to undertake all legal acts that are related to the purpose of the company can bring. The question arises here as to whether executives of a group company are allowed to undertake unbalanced legal transactions with negative consequences for their creditors under the aspect of power of representation 66. In addition, the following: Gem. MEIER-HAYOZ / FORSTMOSER 2007, 24 N 35 resulted in a study as early as 1991, that of 306 listed companies only 89 were not integrated into a group structure and this number is likely to be much smaller today. VON GRAFFENRIED 1976, p. 127; ZÜRCHER 1993, p. 29. JÄGGI 1958, p. 70. In this sense also FORSTMOSER / SPRECHER / TÖNDURY 2005, p. 109 ff., If they demand that as one of the golden rules for avoiding personal liability as a member of the board of directors, that Game of the AG, ie the formal rules of stock corporation law must be strictly observed. Cf. VON BÜREN 2005, pp. 153, 220 ff. VON BÜREN 2005, S ZÜRCHER 1993, p. 32; also GAUCH / SCHLUEP / SCHMID 2008, N ZÜRCHER 1993, p. 36; VON BÜREN 2005, p. Also JÄGGI 1976, pp. 260 ff. 13

28 3 Unbalanced asset shifts in the group First of all, it should be noted that Art. 718a Paragraph 1 OR must be interpreted extensively. According to the case law of the Federal Supreme Court, the power of representation covers all transactions that are not outright excluded by the company's purpose 67.In addition, an act that is ostensibly inappropriate can also be covered by the power of representation if this indirectly safeguards the company's purpose, for example by adding the act in question to the whole 68. It should also be noted that a transaction that is inappropriate even according to the principles just outlined can still be approved by the represented company from a legal representative perspective, which in practice is due to pressure 69. Such an approach can, however, be problematic from a stock corporation law point of view, because a corresponding approval by the general meeting only in connection with a change of purpose and in the 706b (3) of the Swiss Code of Obligations is permissible 70. From this it is clear that the protective means of the creditors derived from the power of representation of the executives are mainly due to the very extensive interpretation of the company's purpose in the broader sense. Art. 718a para. 1 OR are often weak. cc) Protection of creditors from securing the raising and maintenance of capital To realize the creditor protection function assigned to the share capital of a company, the law contains various provisions on securing the raising and maintenance of capital cf. BGE 95 II 422 E. 3; BGE 96 II 439 E. 3b .; BGE 111 II 284 E. 3b or BGE 116 II 320 E. 3a. ZÜRCHER 1993, p. 40 FN 178; VON BÜREN 2005, p. 154 f.ZÜRCHER 1993, p. 37; VON BÜREN 2005, S On this and in detail on the approach under stock corporation law: ZÜRCHER 1993, p. 38 ff .; VON BÜREN 2005, p

29 3 Unbalanced asset shifts in the group At the center of the regulations on raising capital are the provisions on minimum capital, the obligation to subscribe in full and the requirement of minimum liberalization 71. In group structures, however, there is the problem in this context that the amount necessary for raising capital The use of funds can be significantly reduced 72. On the one hand, the factual control of a company can be achieved with far less than 100 percent of the capital or voting rights. The mere division of the share capital between majority and minority shareholders is unobjectionable from the creditors' point of view, as it does not reduce the company's substrate. On the other hand, the same funds can be used to set up several companies. This leads to a de facto dilution of the adhesive substrate, which is contrary to the interests of the creditors 73.In addition, in group relationships, the financing of the individual group subsidiaries can be freely determined by the group parent company within the framework of the provisions on minimum capital 74. If the group subsidiaries only have the statutory minimum capital and if the excess capital requirement is covered by loans from the group parent company, these shareholder loans may be in competition with third-party creditors in financial stress situations. See, for example, Art. 621, 629 Paragraph 2 and 632 OR. VON BÜREN 2005, S Here is an example: M paid up her share capital of 100 in full and in cash. With the cash holdings of 100, she founds two subsidiaries (T1 and T2) with a share capital of 100 each, 50 percent paid in cash. T1 and T2 thus formally each have a share capital of 100, liquid funds of 50 and a claim against M of 50 (unpaid share capital). M has a share capital of 100, 2 investments worth 50 each and no other assets. In the event of bankruptcy, the claims against M and thus half of the share capital will prove to be of no value. Here is an example: M paid up her share capital of 200 in full and in cash. In doing so, she founds a subsidiary T which has a start-up capital requirement of 150. M has two options for financing T: (1) T is endowed with a cash paid up share capital of 150 and (2) T is endowed with a cash paid up share capital of 100 (legal minimum capital) and a loan from M in the amount of 50. 15th

30 3 Unbalanced asset shifts in the group The provisions on securing capital maintenance also serve to protect creditors 75. The integration of the dependent company into the group means that there is a latent risk of capital erosion due to uneven asset shifts. For this reason, the provisions for securing capital preservation represent central creditor protection provisions or, for group companies, an important barrier to the free structuring of unbalanced transactions. Dd) Creditor protection from publicity and accounting regulations The protection of creditors is fundamentally also served by the regulations on register law disclosure and accounting 76. These standards are intended to ensure the publication or accessibility of the relevant data of a company 77. The importance of the disclosure requirements as an instrument for protecting creditors should, however, be relativized with regard to corporations. Although the creditor is entitled to various rights of information and inspection, the relevant information is usually of no further help due to the organizational and representative relationships, which are often difficult to keep track of, as well as the complexity of corporate structures The creditors of a group company can get an idea of ​​the extent of the financial networking and dependence of the company on other group companies. For the inspection of the annual financial statements and the auditor's report of a group subsidiary, which typically does not issue any bonds, the following provisions serve in particular: The provisions on the accumulation of reserves (Art. 670 para. 1, 671 para. 1 and 2, 672, 673 and 674 OR), the prohibition of the hidden distribution of profits (provisions on the use of the legal reserves according to Art. 671 para. 3, 671a and 671b OR as well as the obligation to reimburse in the event of unjustified enrichment according to Art. 678 OR), the requirement to distribute dividends only from the balance sheet profit (Art. 675 para. 2 OR), the prohibition of the return of contributions (Art. 680 para. 2 OR), the restriction on the acquisition of own shares (Art. 659 OR), the procedure for capital reductions (Art. 732 ff. OR), the regulations on bookkeeping and accounting (Art. 662 ff. OR) and the auditor (Art. 727 ff. OR) VON BÜREN 2005, p. 156; See for example Art. 641, 662 Paragraph 2, 662a ff. and 697h OR. ZÜRCHER 1993, p. 65 f. VON BÜREN 2005, p. 156; SCHANZE 1991, p. 479 ff. 16