9 Exit of Different Classes of Investors
9.1 General Remarks
The management of risk depends on the type of investment. Also the regulation of
exit depends on the form of investment. In the context of exit, there are three types
of investors: asset investors; debt investors; and shareholders.
The exit of private asset investors and debt investors is based on contract. Sim-
ply put, the exit of private asset investors is constrained in particular by contract
terms and provisions of property law, and the exit of debt investors is constrained
in particular by contract terms and provisions of insolvency law.
The exit of shareholders depends on the business form. In a limited-liability
company, it is regulated by mandatory company law provisions that protect the
company, its creditors and other shareholders.
9.2 Exit of Asset Investors.........................................................................
The term “asset investors” here means investors who have invested tangible or in-
tangible assets other than money in the firm. There are various kinds of asset in-
vestors ranging from owners of premises in which the firm operates to owners of
intellectual property rights that the firm may use under a licence agreement, and
from providers of operational leasing services to network partners whose distribu-
tion channels or resources the firm uses in its operations. In a broad sense, even
employees and managers who have invested their human capital in the firm can be
regarded as asset investors.
Such asset investors can be regarded as private asset investors. In a broad
sense, the state and similar public bodies can be regarded as public asset investors
when they provide public goods that can be used not only by the firm but also by
others. The state and other public bodies can also act in the capacity of private as-
set investors. Subsidies and state aids belong to other forms of public-sector in-
vestment in the firm (for state aids, see Volume II). In the following, “asset inves-
tors” refers to private asset investors.
Characteristics of asset investment. It is characteristic of asset investment that
the investor owns an asset and permits the firm to use it in exchange for payment
of remuneration (rent). As the owner of the asset, the investor may have a right to
withdraw it or prohibit the firm from using it. As the firm is not the owner of the
P. Mäntysaari, The Law of Corporate Finance: General Principles and EU Law,
DOI 10.1007/ 978-3-642-03058-1_9, © Springer-Verlag Berlin Heidelberg 2010