582 20 Acquisition Finance
shares (that is, shares that are made to behave more like bonds) or other forms of
equity mezzanine. Popular forms of equity mezzanine include preference shares,^127
German-type participatory rights (Genussscheine), and US-type preferred stock,
such as Swiss-type participation certificates (Partizipationsscheine).^128
Restrictions on the distribution of assets to shareholders may restrict the terms
of equity mezzanine. For example, the acquirer cannot provide collateral for the
security of Swiss-type mezzanine participatory certificates or repay them without
observing restrictions on the repayment of paid-up capital and provisions that pro-
hibit actions that are not compatible with the purpose of the corporation.^129
(^127) For Swiss law, see Art. 654 OR (Vorzugsaktien).
(^128) For Swiss law, see Art. 656a OR.
(^129) Art. 656a(2) OR. See Barthold BM, op cit, pp 224–237.