382 10 Exit of Shareholders
“ensure certainty in the law as regards relations between the companies involved
in the division, between them and third parties, and between the members”.^259 The
Directive limits the cases in which nullity can arise by providing that defects be
remedied wherever that is possible and by restricting the period within which nul-
lification proceedings may be commenced.^260
Third, the Sixth Company Law Directive requires rules governing the civil li-
ability of members of the administrative or management bodies of the company
being divided and the civil liability of the experts responsible for drawing up the
report.^261
However, the Sixth Company Law Directive is silent on the particular exit
rights of dissenting shareholders (appraisal rights). On one hand, there are simi-
larities between mergers and divisions, and it is the purpose of the Sixth Company
Law Directive to ensure that the safeguards laid down by the Third Company Law
Directive will not be circumvented. On the other, the Third Company Law Direc-
tive only permits the existence of appraisal rights but does not require them, and
there is a fundamental difference between mergers and divisions. Appraisal rights
are more feasible in mergers, because mergers result in one surviving company.
They are less feasible in divisions, because divisions result in two or more surving
companies and the allocation of assets and liabilities must be regulated in detail in
advance. Under German law, an appraisal right exists in mergers^262 but not in divi-
sions.
Protection of creditors. According to the Sixth Directive, holders of securities
other than shares must be given rights at least equivalent to the rights they pos-
sessed in the company being divided.^263
In addition, the laws of Member States must provide for an adequate system of
protection for the interests of existing creditors. For example, the recipient com-
panies can be made jointly and severally liable for a transferred obligation; the
adoption of such a duty is nevertheless optional.^264
Prospectus Directive. A division can trigger a duty to publish a prospectus un-
der the Prospectus Directive. Unlike mergers, divisions have not been mentioned
in the Prospectus Directive. The main rules on the obligation to publish a prospec-
tus will therefore apply.
Cross-border divisions. There is no directive on cross-border divisions supple-
menting the Directive on cross-border mergers. The High Level Group of Com-
pany Law Experts did not find such a directive necessary in its 2002 Final Re-
port.^265
(^259) Recital 11 of Directive 82/891/EEC (Sixth Company Law Directive).
(^260) Article 19 of Directive 82/891/EEC (Sixth Company Law Directive).
(^261) Article 18 of Directive 82/891/EEC (Sixth Company Law Directive).
(^262) § 29(1) UmwG.
(^263) Article 13 of Directive 82/891/EEC (Sixth Company Law Directive).
(^264) See Article 12 of Directive 82/891/EEC (Sixth Company Law Directive).
(^265) Final Report of the High Level Group of Company Law Experts (2002) p 108: “We
doubt the need for this, given the possibility for parts of a business to be hived off into
separate subsidiaries preparatory to disposal by merger ...”