‘Baby, it’s cold outside...’ – A Comparative and Economic Analysis of Freeze-outs of Minority Shareholders

Vos Tom ()
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Vos Tom: PhD candidate, Jan Ronse Institute for Company and Financial Law, KU Leuven. This article is a revised and abridged version of the author’s master’s thesis, which can be found on https://www.academia.edu. A shorter version in Dutch of this article has been published as T Vos, ‘Uitstoting van minderheidsaandeelhouders uitgenoteerde vennootschappen. Rechtsvergelijkende en rechtsecnomische analyse’ [2017] TRV-RPS 975. The research for this article was awarded the TRV-RPS Prize 2016 (awarded for the best master’s thesis in Belgium in corporate law) and the 2nd place in the Ius Commune Prize 2017. The author would like to thank prof. dr. Marieke Wyckaert for her excellent guidance during the research for this article, and dr. Stijn De Dier and prof. dr. Veerle Colaert for their very helpful comments. Of course, all errors remain exclusively my own.Jan Ronse Institute for Company and Financial Law, KU LeuvenLeuvenBelgium

European Company and Financial Law Review, 2018, vol. 15, issue 1, 148-196

Abstract: Because minority shareholders can be a nuisance for a company, a majority shareholder may want to freeze them out. In general, the approach in the United States towards freeze-outs is more flexible than in the European Union. Law and economics scholarship suggests that a flexible regime for freeze-outs may be beneficial for society, as it addresses a free rider problem and a holdout problem in the market for corporate control. However, these insights are rarely integrated into European legal scholarship. This article endeavours to determine what constitutes an efficient legal framework on freeze-outs through a comparative law and economics approach. First, the legal regime on freeze-outs in the United States is compared with the regime of the Takeover Directive in the European Union and with Dutch law. Then, these legal systems are evaluated on their efficiency. Finally, some suggestions of reform are made for the European Union.

Date: 2018
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DOI: 10.1515/ecfr-2018-0006

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