Decision of the Federal Constitutional Court on constitutional complaints by former T-Online shareholders
In May 2011, the Federal Constitutional Court dismissed the constitutional complaints of several former shareholders of T-Online International AG, which were directed against a specific additional payment due to the merger with Deutsche Telekom AG.
Background of the merger and additional payment regulation
Merger and compensation disputes
In 2006, T-Online International AG was merged with Deutsche Telekom AG. The cash compensation paid to minority shareholders as part of this conversion was subject to judicial review. Following the main proceedings, the courts decided that minority shareholders were entitled to an additional payment plus interest, as the originally paid compensation was deemed inadequate.
Shareholders’ complaints
Some former shareholders considered the additional payment insufficient and claimed that their constitutional rights to a fair hearing and effective legal protection had been violated. In their complaints, they argued that their property rights were being impaired by the court’s determination of the compensation payment.
Findings of the Federal Constitutional Court
Court examination
The Federal Constitutional Court examined the arguments presented. The court addressed the question of whether the relevant corporate law provisions, in conjunction with the judicial decision-making process and the amount of the determined additional payment, violated the Basic Law—especially the fundamental right to property and the requirement for effective legal protection.
Outcome of the constitutional review
The judges concluded that there are no constitutional concerns regarding the procedural course or the amount of the additional payment. In particular, the court saw no violation of the right to a fair hearing. The right to property is also not infringed upon by the court’s decisions on the additional payment since the legal framework for mergers aims at an appropriate balancing of economic interests.
The Federal Constitutional Court also clarified that the specific arrangements of corporate compensation regulations remain the prerogative of the ordinary legislator, as long as the minimum constitutional requirements are met.
Significance of the decision
The ruling confirms the great importance of judicial reviewability of compensation in the case of conversions and mergers of stock corporations. Even if minority shareholders consider the amount of a compensation payment to be insufficient, the existing legal framework guarantees an effective review process. The determination of the additional payment was found by the Federal Constitutional Court judges to be constitutional.
The decision underscores the importance of judicial oversight within the constitutionally permissible framework, especially in corporate restructuring measures where shareholder interests must be weighed against corporate interests.
Further information
The proceedings were documented under file number 1 BvR 2658/10 and concluded with the unsuccessful constitutional complaint.
For companies, investors, and wealthy shareholders, restructuring measures such as mergers remain a complex field with numerous legal requirements. MTR Legal Attorneys provide comprehensive support on issues of stock corporation law for those in need of further information or advice. More information is available under legal advice in stock corporation law.
