Brussels, 12/11/2015 (Agence Europe) - On Thursday 12 November, the General Court dismissed the action brought by two shareholders from the German HSH Nordbank who were seeking the complete or at least partial annulment of the European Commission decision of 2011 validating the German rescue measures in favour of this bank that suffered significantly from the “sub-prime” crisis.
The Commission considered that those measures, while constituting state aid, were compatible with the internal market, subject to compliance by Germany with certain commitments and conditions. According to those conditions, HSH Nordbank was required to grant HSH Finanzfonds the right to a lump-sum payment of €500 million which HSH Finanzfonds was then required to contribute to HSH Nordbank's through an ordinary contribution in kind.
This is precisely what was contested by the Luxembourg investment funds HSH Investment Holdings Coinvest-C and HSH Investment Holdings FSO, who with other investment funds, advised by the American company JC Flowers & Co. held 25.67% of the capital of HSH Nordbank prior to the recapitalisation. After that recapitalisation, they held only 9.19% thereof.
The General Court holds that the two minority shareholders have the right to oppose the operations, which are not in their interest (their rights as shareholders declined), even though the rescue measures were ultimately in the interest of all parties.
The General Court, however, believes that even though the lump-sum payment of €500 million reduced the participation of the minority shareholders, it is legally founded insofar as it obliges the two investment funds to make a proportionate effort to that agreed by the public shareholders during the recapitalisation operation. It transpires that the minority shareholders did not indirectly benefit from such aid and that the measures in question can be declared compatible with the internal market and that they are also proportionate and in compliance with the principle of equal treatment. (Original version in French by Jan Kordys)