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Original Articles

The Structure of Regulatory Competition in European Corporate Law

Martin GelterUniversitätsassistent, Wirtschaftsuniversität Wien, Vienna, Austria. Olin Fellow in Law and Economics at Harvard Law School, September 2003 to January 2005. Financial support from the Olin Center for Law, Economics and Business at Harvard Law School is gratefully acknowledged.
Pages 247-284 | Published online: 27 Apr 2015

  • Case C–212/97 Centros Ltd v Erhvervs- og Selskabsstyrelsen [1999] ECR 1459.
  • Case C–208/00 Überseering BV v Nordic Construction Company Baumanagement GmbH [2002] ECR 9919.
  • The real seat theory is used in Austria, Belgium, France, Germany, Italy and Luxemburg, while various forms of the incorporation theory dominate in common law jurisdictions, the Netherlands, Switzerland, Liechtenstein and Scandinavia. For comparative overviews see, eg K Baelz and T Baldwin, “The End of the Real Seat Theory (Sitztheorie): the European Court of Justice Decision in Ueberseering of 5 November 2002 and its Impact on German and European Company Law” (2002) 3 German Law Journal no 12, para 9; PJ Omar, “Centros, Uberseering and Beyond: A European Recipe for Corporate Migration, Part 1” (2004) 15 International Commercial and Company Law Review 398–400. For a detailed discussion of Dutch, English, Swiss, German, French and Italian law, see S Rammeloo, Corporations in Private International Law (Oxford University Press, 2001), 95–236.
  • S Rammeloo, “The Long and Winding Road towards Freedom of Establishment for Legal Persons in Europe” (2003) 10 Maastricht Journal of European and Comparative Law 169, 184–86.
  • (German) Bundesgerichtshof, 13 March 2003, VIII ZR 370/98, (2003) 56 Der Betrieb 986; WH Roth, “From Centros to Ueberseering, Free Movement of Companies, Private International Law and Community Law” (2003) 52 International and Comparative Law Quarterly 177, 196.
  • Eg Baelz and Baldwin, supra n 3, para 22; contra Eva Micheler, “I. Recognition of Companies Incorporated in Other EU Member States” (2003) 52 International and Comparative Law Quarterly 521, 526 (pointing out that Überseering was not concerned with limited liability); see also T Bachner, “Freedom of Establishment for Companies: A Great Leap Forward” (2003) 62 Cambridge Law Journal 47, 49 (“this is the end of the theory of the real seat”).
  • Thus, Case C–81/87 The Queen and HM Treasury and Commissioners of Inland Revenue ex parte Daily Mail and General Trust PLC [1989] ECR 5483, remains good law (see, eg Bayerisches Obersters Landgericht, 11 February 2004, 3 Z 175/03, (2004) 95 GmbH-Rundschau 490; Roth, supra n 5, 184; F Woolridge, “Überseering: Freedom of Establishment of Companies Affirmed” (2003) 14 European Business Law Review 227, 232; Micheler, supra n 6, 524). For a long time, Daily Mail had been used as a justification for the real seat theory (eg H Halbhuber, “National Doctrinal Structures and European Company Law” (2001) 38 Common Market Law Review 1385, 1391–95 (characterising this as a misreading of the case); Micheler, supra n 6, 522 (pointing out dicta supporting that construction)).
  • Case C–167/01 Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd [2003] ECR 10155.
  • Wet op de Formeel Buitenlandse Vennootschappen, Staatsblad van het Kooninkrijk der Nederlanden, 1997/697. See KE Sorensen and M Neville, “Corporate Migration in the European Union” (2000) 6 Columbia Journal of European Law 181, 187–88; Rammeloo, supra n 4, 194 (both suggesting that such laws might be a good solution).
  • eg HJ de Kluiver, “Inspiring a New European Company Law” (2004) 1 European Company and Financial Law Review 121, 128–31; A Looijestijn-Clearie, “Have the Dikes Collapsed? Inspire Art a Further Breakthrough in the Freedom of Establishment of Companies?” (2004) 5 European Business Organization Law Review 389, 409–14.
  • eg N Adensamer and C Bervoets, “Nationaler Gläubigerschutz auf dem Prüfstand” (2003) 21 Österreichisches Recht der Wirtschaft 617, 618; de Kluiver, supra n 10, 127; Looijestijn-Clearie, supra n 10, 404. Interestingly, the US states of California and New York have statutes on “pseudo-foreign corporations” comparable to the Dutch one. See, eg WJ Carney, “The Political Economy of Competition for Corporate Charters” (1997) 16 Journal of Legal Studies 303, 314–15; S Grundmann, “Wettbewerb der Regelgeber im Europäischen Gesellschaftsrecht—jedes Marktsegment hat seine Struktur” (2001) 30 Zeitschrift für Unternehmens- und Gesellschaftsrecht 783, 803; EM Kieninger, Wettbewerb der Privatrechtsordnungen im europäischen Binnenmarkt (Tübingen, Mohr Siebeck, 2002), 109–12; C Kersting, “Corporate Choice of Law—A Comparison of the United States and European Systems and a Proposal for a European Directive” (2002) 28 Brooklyn Journal of International Law 1, 16–37; R Drury, “A European Look at the American Experience of the Delaware Syndrome” (2005) 5 Journal of Corporate Law Studies 1, 16–21.
  • RK Winter, “State Law, Shareholder Protection, and the Theory of the Corporation” (1977) 6 Journal of Legal Studies 251; RK Winter, “The ‘Race to the Top’ Revisited” (1989) 89 Columbia Law Review 1526; FH Easterbrook and DR Fischel, The Economic Structure of Corporate Law (Cambridge MA, Harvard University Press, 1991) 212–27; R Romano, The Genius of American Corporate Law (Washington, AEI Press, 1993). Romano also argues that regulatory competition in Securities Regulation would be equally beneficial. R Romano, “Empowering Investors: A Market Approach to Securities Regulation” (1998) 107 Yale Law Journal 2359; R Romano, “The Need for Competition in International Securities Regulation” (2001) 2 Theoretical Inquiries Into Law 387; R Romano, The Advantage of Competitive Federalism for Securities Regulation (Washington, AEI Press, 2002).
  • This view traces its roots back to Justice Brandeis's dissent in Louis K. Liggett Co. v Lee, 288 US 517, 559 (1933) and was famously brought forward by WL Cary, “Federalism and Corporate Law: Reflections Upon Delaware” (1974) 83 Yale Law Journal 663. It has been reaffirmed with the tools of law and economics by LA Bebchuk, “Federalism and the Corporation: The Desirable Limits on State Competition in Corporate Law” (1992) 105 Harvard Law Review 1442.
  • Tobin's Q is calculated by dividing market value by the replacement value of assets.
  • R Daines, “Does Delaware Law Improve Firm Value?” (2001) 62 Journal of Financial Economics 525 (finding an advantage of 2–3% in value). Some argue that this effect might be due to reverse causality, because that better managed corporations are more likely to incorporate in Delaware. LA Bebchuk and A Ferrell, “A New Approach to Takeover Law and Regulatory Competition” (2001) 87 Virginia Law Review 111, 137–38; LA Bebchuk, A Cohen and A Ferrell, “Does the Evidence Favor State Competition in Corporate Law” (2002) 90 California Law Review 1775, 1786–87 (criticising Daines's study on grounds of the fluctuations in firm value he finds).
  • G Subramanian, “The Disappearing Delaware Effect” (2004) 20 Journal of Law, Economics and Organization 32.
  • After the Delaware Supreme court had permitted the poison pill in Moran v Household International Inc., 500 A 2d 1346 (Del 1985), the crucial issue was when the board has to “pull” the pill or lower other takeover defences. Originally, the courts employed an arguably rather strict test, resting on the decision whether a defence was reasonable to the threat posed by the takeover (Unocal Corp v Mesa Petroleum Co., 493 A 2d 946 (Del 1985); See LA Bebchuk and A Ferrell, “Federalism and Corporate Law: The Race to Protect Managers from Takeovers” (1999) 99 Columbia Law Review 1168, 1185; City Capital Associates v Interco Inc, 551 A 2d 787 (Del Ch 1988), rejected by Paramount Communications, Inc v Time, Inc, 571 A 2d 1140 (Del 1990)). This test was narrowed down in Unitrin Inc v American General Corp, 651 A 2d 1361 (Del 1995) to prohibit only “draconian”, ie “coercive” and “preclusive” defences. See, eg RJ Gilson, “Unocal Fifteen Years Later” (2000) 26 Delaware Journal of Corporate Law 491, 500–1; Subramanian, supra n 16, 53.
  • Delaware's own anti-takeover statute (DGCL s 203) has a reputation of being relatively permissive towards hostile takeovers. See, eg M Kahan and EB Rock, “How I Learned to Stop Worrying and Love the Pill: Adaptive Responses to Takeover Law” (2002) 69 University of Chicago Law Review 871, 894; WT Allen, JB Jacobs and LE Strine, “The Great Takeover Debate: A Mediation on Bridging the Conceptual Divide” (2002) 69 University of Chicago Law Review 1067, 1068 n 2; see LA Bebchuk, JC Coates and G Subramanian, “The Powerful Antitakeover Force of Staggered Boards: Further Findings and a Reply to Symposium Participants” (2003) 55 Stanford Law Review 855, 911–12 (stating that legislation intended to leave the further development to case law). But see G Subramanian, “The Influence of Antitakeover Statutes on Incorporation Choice: Evidence on the ‘Race’ Debate and Antitakeover Overreaching” (2002) 150 University of Pennsylvania Law Review 1795 (finding a trend towards incorporations in states with strict takeover statutes, ie those beneficial to managerial entrenchment, which stop short only of the most extreme statutes); Bebchuk et al, supra n 15, 1818 (arguing that control-share-acquisition statutes and poison-pill-endorsement statutes attract most out-of-state incorporations).
  • Subramanian, supra n 16, 52–55; Bebchuk et al, supra n 15, 1803. For overviews on anti-takeover statutes see, eg WT Allen and R Kraakman, Commentaries and Cases on the Law of Business Organizations (New York, Aspen, 2003), 548–57; RC Clark, Corporate Law (New York, Aspen, 1986), 568–71; Bebchuk and Ferrell, supra n 17; see also R Romano, “Law as a Product: Some Pieces of the Incorporation Puzzle” (1985) 1 Journal of Law, Economics and Organization 225, 265 (finding that a significant proportion of reincorporations results from the defence against hostile takeovers).
  • LA Bebchuk and A Hamdani, “Vigorous Race or Leisurely Walk: Reconsidering the Competition over Corporate Charters” (2002) 112 Yale Law Journal 553, 568 (finding that in 1999 57.75% were incorporated in Delaware, including 59% of the Fortune 500 and 68% corporations which had recently gone public). See Subramanian, supra n 18, 1795 (estimating a Herfindahl—Hirschman Index (HHI) of 2662, which corresponds to a market concentration that would usually cause concern to antitrust authorities).
  • Bebchuk and Hamdani, supra n 20; R Daines, “The Incorporation Choices of IPO Firms” (2002) 77 New York University Law Review 1559; See Romano, supra n 19, 278 (considering the identification of company and state as an immaterial asset which would be lost in case of a reincorporation in Delaware).
  • M Kahan and E Kamar, “The Myth of State Competition in Corporate Law” (2002) 55 Stanford Law Review 679; Bebchuk and Hamdani, supra n 20.
  • Bebchuk and Hamdani, supra n 20, 582–83.
  • Needless to say, there are also some obvious factors potentially affecting markets, eg cultural preferences. I address those briefly in Section C.1 and take them as an exogenous influence that will most likely reduce the demand for out-of-state incorporations.
  • See MJ Roe, “Delaware's Competition” (2003) 117 Harvard Law Review 588, 608–10 (discussing Standard Oil of Ohio, which obtained monopolistic power under the control of John D Rockefeller); Drury, supra n 11, 3–7.
  • See C Grandy, “New Jersey Chartermongering, 1875–1929” (1989) 49 Journal of Economic History 677; K Heine and W Kerber, “European Corporate Laws, Regulatory Competition and Path Dependence” (2002) 13 European Journal of Law and Economics 47, 54–55 (viewing the franchise tax as consideration for the permission of trusts).
  • Kahan and Kamar, supra n 22, 731; Roe, supra n 25, 609–10.
  • Grandy, supra n 26, 689; Kahan and Kamar, supra n 22; Roe, supra n 25, 610.
  • Eg Cary, supra n 13, 664; Drury, supra n 25, 7–8.
  • Delaware's market share even increased from 35% in 1965 to 40% in 1973 and reached about 50% in 2000. See Subramanian, supra n 18, 1804.
  • Cf L Enriques, “EC Company Law and the Fears of a European Delaware” (2004) 15 European Business Law Review 1259, 1269 (arguing that few “product innovations” in corporate law are available today); TH Tröger, “Choice of Jurisdiction in European Corporate Law: Perspectives on European Corporate Governance” (2005) 6 European Business Organization Law Review 3, 43 (speaking of a “historical singularity”).
  • Cf M Klausner, “Corporations, Corporate Law and Networks of Contracts” (1995) 81 Virginia Law Review 757, 772; Bebchuk and Hamdani, supra n 20, 586–88.
  • Romano, supra n 12, 39–40; BS Black, “Is Corporate Law Trivial?: A Political and Economic Analysis” (1990) 84 Northwestern University Law Review 542, 589–91; Kahan and Kamar, supra n 22, 708.
  • Kahan and Kamar, supra n 22, 708; Roe, supra n 25, 594.
  • Eg Black, supra n 33, 590. Sometimes it takes only weeks or months to get the preliminary injunction decided on, which can be crucial in a takeover battle.
  • Winter, supra n 12, 254–55; JR Macey and GP Miller, “Toward an Interest-Group Theory of Delaware Corporate Law” (1987) 65 Texas Law Review 469, 484–86.
  • Romano, supra n 12, 9; cf Cary, supra n 13, 668; Romano, supra n 19, 240.
  • Romano, supra n 12, 39; Romano, supra n 19, 250; but see Black, supra n 33, 589 (arguing that large states have an equally developed case law or would be able to develop it quickly); E Kamar, “A Regulatory Competition Theory of Indeterminacy in Corporate Law” (1998) 98 Columbia Law Review 1908, 1913–23, 1939–40; Bebchuk and Ferrell, supra n 17, 1190–91; Bebchuk and Hamdani, supra n 20, 601–4 (all arguing that the indeterminacy of Delaware law creates income for the bar).
  • Kahan and Kamar, supra n 22, 725–26.
  • Cf J Armour, “Who Should Make Corporate Law? EU Legislation versus Regulatory Competition” (2005) 48 Current Legal Problems, available at http://ssrn.com/abstract=757205, 53, 22 (arguing that UK judges’ deference to precedent may become an advantage for the UK).
  • On the role of precedent in civil law jurisdictions see, eg R David, “Sources of Law”, in R David, International Encyclopedia of Comparative Law, Vol II: The Legal Systems of the World and their Comparison and Unification (Tübingen, Mohr, 1984), 116–19; M Lasser, “Judicial (Self-)Portraits: Judicial Discourse in the French Legal System” (1995) 104 Yale Law Journal 1325–1410; C Baudenbacher, “Some Remarks on the Method of Civil Law” (1999) 34 Texas International Law Journal 333, 349–56.
  • An example that has gained some international attention is the German Holzmüller doctrine. See, eg M Löbbe, “Corporate Groups: Competences of the Shareholders’ Meeting and Minority Protection—the German Federal Court of Justice's recent Gelatine and Macrotron Cases Redefine the Holzmüller Doctrine” (2004) 5 German Law Journal 1057–79.
  • See generally David, supra n 41, 143–44.
  • W Meilicke, “Die Niederlassungsfreiheit nach ‘Überseering’” (2003) 94 GmbH-Rundschau 793, 808–9 (using Überseering as reason to argue for the abolition of the doctrine). By contrast, both Austria (Bundesgesetz über Eigenkapital ersetzende Gesellschafterleistungen (Eigenkapitalersatz-Gesetz—EKEG), Art I Gesellschafts- und Insolvenzrechtsänderungsgesetz 2003—GIRÄG 2003, BGBl I 2003/92) and Italy (Codice Civile, Art 2467, 2497quinquies, introduced by the law of 17 January 2003, Gazzetta Ufficiale no 17, Supplemento Ordinario) have recently enacted statutes on this issue. For a formal economic analysis of subordination and a brief comparative overview, see M Gelter, “The Subordination of Shareholder Loans in Bankruptcy” (2005) Harvard John M. Olin Center for Law, Economics, and Business Fellows’ Discussion Paper Series 4, available at http://www.law.harvard.edu/programs/olin_center/fellows_papers/4_Gelter.php, accessed on 28 July 2005.
  • Macey and Miller, supra n 36, 494–95.
  • US Constitution, Art III, s 2; see, eg AT von Mehren, Law in the US: A General and Comparative View (Deventer, Kluwer, 1988), 41–50; S Grissom, “Diversity Jurisdiction: An Open Dialogue in Dual Sovereignty” (2001) 24 Hamline Law Review 372; DL Bassett, “The Hidden Bias in Diversity Jurisdiction” (2003) 81 Washington University Law Quarterly 119.
  • Erie RR v Tompkins, 304 US 64 (1938) (finding that state law applies). According to the internal affairs doctrine, the law of the state of incorporation applies to disputes within the company (including those between shareholders and directors). Eg Restatement (Second) of Conflict of Laws, s 302; First National City Bank v Banco Para el Comercio Exterior de Cuba, 462 US 611, 621 (1983); cf Kamen v Kemper Financial Services, Inc., 500>, US 90, 106 (1991); see Macey and Miller, supra n 36, 495; Carney, supra n 11, 313; Kersting, supra n 11, 2–11; Kieninger, supra n 11, 107; S Lombardo, “Conflict of Law Rules in Company Law after Überseering: An Economic and Comparative Analysis of the Allocation of Policy Competence in the European Union (2003) 4 European Business Organization Law Review 301, 312–13.
  • Macey and Miller, supra n 36, 496; cf Romano, supra n 12, 41.
  • Macey and Miller, supra n 36, 497.
  • 10 Delaware Code, s 3114.
  • Regulation 44/2001 EC [2001] OJ L12/1. Generally, the regulation applies only to “civil or commercial matters” (Art 1(1)). Thus, it may not apply to disputes for company registers. In a different context, that ECJ found that German and Austrian courts were acting in a non-judicial function when acting in there function as registers. Case C–86/00 HSB Wohnbau [2001] ECR 5353; Case C–182/00 Lutz GmbH and Others [2002] ECR 00547 (ECJ dismissing requests for preliminary opinions). Cf G Eckert, “Internationale Zuständigkeit nach der EuGVVO bei Kapitalgesellschaften” (2003) 14 ecolex 76, 78; R Hüßtege, “Art 60 EuGVVO”, in H Thomas and H Putzo (eds), Zivilprozessordnung mit Gerichtsverfassungsgesetz, den Einführungsgesetzen und europarechtlichen Vorschriften (EuGVVO, EheVO, ZustellungsVO, ZustDG, AVAG) (München, Beck, 25th edn, 2003), para 11.
  • Kersting, supra n 11, 47.
  • Cf Roth, supra n 5, 191 (criticising that this reference to private international law foils the purpose of harmonisation); Rammeloo, supra n 3, 39 (“the everlasting trench war between the ‘incorporation’ theory and the ‘real seat’ theory reappears at the level of international competence”). The ECJ in Überseering does not explicitly require EU Member States to have specific conflict of laws rules, but only to recognise legal capacity. Even UK private international law does not exclusively rely on incorporation: according to (2001) SI 2001/3929, sch 1, para 10, a company has its seat in the UK if “it was incorporated or formed under the law of a part of the United Kingdom”, or if “its central management and control is exercised in the United Kingdom”. See L Collins, A Briggs, J Hill, JD McLean and CG Morse, Dicey and Morris on the Conflict of Laws (London, Sweet & Maxwell, 13th edn, 4th suppl, 2004), ss 11–060, S11–346.
  • J Kropholler, Europäisches Zivilprozeßrecht (Heidelberg, Verlag Recht und Wirtschaft, 7th edn, 2002), Art 22, para 39; Hüßtege, supra n 51, para 11.
  • German Aktiengesetz, ss 243–55.
  • Kropholler, supra n 54, Art 22, para 40; Eckert, supra n 51, 80.
  • Enriques, supra n 31, 1271 (stating that not even the UK has judges “even faintly as specialized and reliable”); but see Armour, supra n 40, s 3, 22 (arguing that the UK is the only EU Member State with a specialist corporate law court).
  • S Maul and C Schmidt, “Inspire Art—Quo vadis Sitztheorie?” (2003) 58 Betriebs-Berater 2297, 2299; Tröger, supra n 31, 24. By contrast, the state of incorporation will normally be able to provide a faster decision, as it its own courts will be more familiar with its law.
  • See C Kirchner, RW Painter and WA Kaal, “Regulatory Competition in EU Corporate Law After Inspire Art: Unbundling Delaware's Product for Europe”, (2004) University of Illinois Law and Economics Research Paper No LE04-001, available at http://ssrn.com/abstract=617681, 40–49 (arguing that it would be beneficial to “unbundle” procedural law from corporate law).
  • For example, arbitration is considered problematic for lawsuits challenging the validity of shareholder decisions in German law. See (German) Bundesgerichtshof, 29 March 1996, II ZR 124/95, (1997) 132 Entscheidungen des Bundesgerichtshofes in Zivilsachen (BGHZ) 278–90.
  • Cf Bebchuk and Hamdani, supra n 20, 588; Kirchner et al, supra n 59, 21–22 (discussing recoupment of investments in attractive corporate law).
  • The tax is collected annually, with the amount depending on the number of authorised shares, corporate assets and authorised capital. On the calculation of the tax base, see 8 Delaware Code, s 503.
  • Roe, supra n 25, 594; Drury, supra n 25, 9. For a detailed overview on the amount of tax revenue collected since 1960, see Romano, supra n 12, 7–8.
  • The annual amount ranges from US $35 to US $165,000.
  • In the rest of the US, 45 states only have either a low fee, which is independent from the company's size, a tax depending on the amount of the firm's business activity in the state or both, including those states which are by some considered Delaware's main competitors. Kahan and Kamar, supra n 22, 687–93; cf Bebchuk and Hamdani, supra n 20, 576–77. Usually, an incorporation in Delaware is thus considerably more expensive than in the home state (Romano, supra n 19, 257).
  • Cf Romano, supra n 19, 239 (finding a correlation between the speed of adopting new corporate law innovations and franchise tax as a percentage of the state's total tax revenue). But see Kahan and Kamar, supra n 22, 700 n 64.
  • Directive 69/335 EEC [1969] OJ L249/25; cf H Merkt, “Das Europäische Gesellschaftsrecht und die Idee des ‘Wettbewerbs der Gesetzgeber’” (1995) 59 Rabels Zeitschrift für ausländisches und internationales Privatrecht 545, 565 (pointing out that neither Germany, the UK nor the Netherlands impose such taxes).
  • Cases C–71/91 and C–179/91 Ponente Carni SpA and Cispadana Costruzioni SpA v Ammininistrazione delle Finanze dello Stato [1993] ECR 1915; Case C–188/95 Fantask A/S ea v Industriministeriet (Erhvervministeriet) [1997] ECR 6783. Art 12 of the directive lists permissible exceptions.
  • Cf OECD Model Convention with Respect to Taxes on Income and on Capital, Art 7; cf BR Cheffins, Company Law: Theory, Structure and Operation (Oxford University Press 1997), 435–36 (arguing that tax revenue would not create a significant incentive in the UK unless companies also physically relocate there); Tröger, supra n 31, 16 (speaking of an “unwarranted concern” that incorporation choices could be affected by corporate tax).
  • OECD Model Convention with Respect to Taxes on Income and on Capital, Art 4(3); cf Kieninger, supra n 11, 185; JC Dammann, “A New Approach to Corporate Choice of Law” (2005) 38 Vanderbilt Journal of Transnational Law 51, 71–72.
  • Contra JC Dammann, “Freedom of Choice in European Corporate Law” (2004) 29 Yale Journal of International Law 477, 521, 524–33.
  • Cf Tröger, supra n 31, 19.
  • Cf Kahan and Kamar, supra n 22, 728–35 (discussing political resistance in the American context); but see Grundmann, supra n 11, 795–96 (discussing Europe and expecting incentives already because of minimal tax effects and other factors such as prestige; however, one could counter this argument by pointing out that in any European country, political resistance is likely to be much greater than in Delaware).
  • Cf Macey and Miller, supra n 36, 486–87.
  • Kahan and Kamar, supra n 22, 697.
  • This was noted already by Cary, supra n 13, 690–92; but see Macey and Miller, supra n 36, 492–94. (pointing out revenue by investment bankers and non-Delaware lawyers).
  • Roe, supra n 25, 594.
  • Bebchuk, supra n 13, 1452.
  • Easterbrook and Fischel, supra n 12, 217.
  • Black, supra n 33, 584. The case of Smith v van Gorkom, 488 A 2d 858 (Del 1985) is particularly notable, as—which is an unusual outcome in Delaware—directors were ordered to pay damages in spite of the business judgment rule (Allen and Kraakman, supra n 19, 254). A legislative change followed promptly, allowing companies to opt out of a judicial review of duty of care (DGCL s 102(b)(7)).
  • Cheffins, supra n 69, 437–38; Armour, supra n 40, s 3, 31.
  • Dammann, supra n 71, 522–23.
  • Kahan and Kamar, supra n 22, 697–98.
  • Daines, supra n 21, 1584–86; Enriques, supra n 31, 1264.
  • But see Easterbrook and Fischel, supra n 12, 217 n 8 (pointing out that out-of-state lawyers are permitted to represent Delaware corporations and to take residence and practice there). In Europe, it seems equally likely that the economic incentive to create a source of income for the local bar will decrease with an increasing transnational integration of law firms.
  • Cf Kahan and Kamar, supra n 22, 698 (estimating additional revenue to lawyers from incorporations in US states other than Delaware).
  • S Deakin, “Regulatory Competition versus Harmonization in European Company Law”, in DC Esty and D Geradin (eds), Regulatory Competition and Economic Integration: Comparative Perspectives (Oxford University Press, 2001), 190, 205.
  • Cf Armour, supra n 40, s 3, 31 (suggesting that London law firms may become an influential interest group in the development of UK corporate law).
  • See H Hirte, “Wettbewerb der Rechtsordnungen nach ‘Inspire Art’: Auch das Beurkundungserfordernis für GmbH-Anteilsübertragungen steht zur Disposition” (2003) 94 GmbH-Rundschau R 421; J Kleinert and P Probst, “Endgültiges Aus für Sonderanknüpfungen bei (Schein-)Auslandsgesellschaften” (2003) 56 Der Betrieb 2217, 2218 n 10; cf Kieninger, supra n 11, 172; Halbhuber, supra n 14, 1403 (considering England a “candidate for a European Delaware”).
  • Looijestijn-Clearie, supra n 10, 397; De Kluiver, supra n 10, 122–24 (discussing Dutch companies moving into UK law).
  • See, eg P Kindler, “Auf dem Weg zur Europäischen Briefkastengesellschaft?” (2003) 56 Neue Juristische Wochenschrift 1073, 1078 (2003).
  • Second Company Law Directive 77/91 EEC [1977] OJ L26/1.
  • Second Directive, Art 1.
  • Cf Cheffins, supra n 69, 440–43; Micheler, supra n 6, 529.
  • JA McCahery and EP Vermeulen, “Limited Partnership Reform in the United Kingdom: A Competitive Venture Capital Oriented Business Form” (2004) TILEC Discussion Paper DP 2004–024, 20.
  • For example, France recently reduced minimum capital to €1 in the Société à Responsabilité Limitée (SARL) and has considerably deregulated the process of setting up a company. See Loi n° 2003–721 du 1er août 2003 pour l'initiative économique, Journal officiel n° 179 du 5. 8. 2003, 13449, Art 1. Similar legislation has been introduced in Spain. See EM Kieninger, “The Legal Framework of Regulatory Competition Based on Company Mobility: EU and US Compared” (2004) 6 German Law Journal 741, 768. The German Ministry of Justice has recently released a proposal to reduce minimum capital for German GmbHs from €25,000 to €10,000. Entwurf eines Gesetzes zur Neuregelung des Mindestkapitals der GmbH (MindestkapG), available at http://www.bmj.de/media/archive/908.pdf, accessed 28 May 2005.
  • Armour, supra n 40.
  • See, eg Bebchuk, supra n 13, 1452.
  • But see G Hadfield and E Talley, “On Public versus Private Provision of Corporate Law” (2004) USC CLEO Research Paper No C04-13, available at http://ssrn.com/abstract=57064, 11–15 (assuming that legislators’ private benefits decrease after a certain point).
  • See also D Charny, “Competition among Jurisdictions in Formulating Corporate Law Rules: An American Perspective on the ‘Race to the Bottom’ in the European Communities” (1991) 32 International Law Journal 423, 447 (not seeing a danger of a race to the bottom in larger EU member states); Kieninger, supra n 96, 758–59.
  • According to the census of 2000, Delaware has a population of 783,600; see US Census Bureau, http://factfinder.census.gov/bf/_lang=en_vt_name=DEC_2000_PL_U_QTPL_geo_id=04000US10.html, accessed on 9 May 2003.
  • EEA Treaty, Arts 31 and 34.
  • See also McCahery and Vermeulen, supra n 95, 22.
  • Kieninger, supra n 3, 191.
  • EEA Treaty, Art 40, annex XII; cf Kieninger, supra n 11, 188; Kieninger, supra n 96, 754–55.
  • Gesetz über die Landes- und Gemeindesteuern (Steuergesetz) vom 30.1.1961, LGBl 1961/7, Art 84.
  • Kieninger, supra n 11, 187.
  • But see Tröger, supra n 31, 21 n 63.
  • ibid at 69.
  • Kieninger, supra n 11, 187 (showing a decrease from 26.6% in 1985 to 15.4% in 1998).
  • Heine and Kerber, supra n 26, 62 (speaking of sunk costs of human capital eg of lawyers who invested in expertise in their own law); Kirchner et al, supra n 59, 13 (discussing costs of handling foreign law); Enriques, supra n 31, 1264. On cultural and language barriers see Kieninger, supra n 11, 171–72; M Siems, “Convergence, Competition, Centros and Conflicts of Law: European Company Law in the 21st Century” (2002), 27 European Law Review 47, 54; Dammann, supra n 71, 492–93; see also Bachner, supra n 6, 49; Maul and Schmidt, supra n 58, 2298–99.
  • Kirchner et al, supra n 59, 23; McCahery and Vermeulen, supra n 95, 20.
  • See generally GJ Stigler, “The Economics of Information” (1961) 69 Journal of Political Economy 213.
  • Hirte, supra n 89, R 421.
  • Besides the ECJ cases cited in Section A.1, see, eg Oberster Gerichtshof (Austrian Supreme Court), 15 July 1999, 6 Ob 123/99b and 6 Ob 124/99z, (1999) 17 Österreichisches Recht der Wirtschaft 719 (1999); Oberlandesgericht Zweibrücken, 26 March 2003, 3 W 21/03 (2003) 58 Betriebs-Berater 864.
  • Cf Kirchner et al, supra n 59, 22–23.
  • M Straube, “Was bleibt von der ‘14. Gesellschaftsrechtlichen Richtlinie’?” in S Kalss, C Nowotny and M Schauer (eds), Festschrift Peter Doralt zum 65. Geburtstag (Vienna, Manz, 2004), 637, 644.
  • Eg DGCL s 390.
  • DGCL ss 252, 256, 258.
  • For a European overview, see MM Siems, “The European Directive on Cross-border Mergers: An International Model?” (2005) Columbia Journal of European Law (Forthcoming), s II; see also Sorensen and Neville, supra n 9, 191–92; Kieninger, supra n 11, 148–49; Dammann, supra n 71, 488–89; Dammann, supra n 70, 78; Enriques, supra n 31, 1261; cf Deakin, supra n 87, 203.
  • Proposal for a Directive of the European Parliament and of the Council on the Cross-border Transfer of Companies’ Registered Offices, COM (1997) 6002.
  • Straube, supra n 117, at 643, 649.
  • Consider, eg the Daimler—Chrysler merger; cf T Baums, “Corporate Contracting around Defective Regulations: The Daimler—Chrysler Case” (1999) 115 Journal of Institutional and Theoretical Economics 119.
  • Oberster Gerichtshof 20.3.2003, 6 Ob 283/02i, (2003) 24 Zeitschrift für Wirtschaftsrecht 1085. Also in the US, cross-border merger are frequently used to engineer a reincorporation in another state. See, eg Subramanian, supra n 18, 1795, 1803.
  • R Dorr and G Stukenborg, “‘Going to the Chapel’: Grenzüberschreitende Ehen im Gesellschaftsrecht—Die ersten transnationalen Verschmelzungen nach dem UmwG (1994)” (2003) 56 Der Betrieb 647.
  • G Wenglorz, “Die grenzüberschreitende ‘Heraus'-Verschmelzung einer deutschen Kapitalgesellschaft: Und es geht doch!” (2004) 59 Betriebs-Berater 1061.
  • Landgericht Koblenz, 16 September 2003, 4 HK.T 1/03, (2003) 94 GmbH-Rundschau 1213.
  • Under the predominant interpretation, Daily Mail permits such restraints; see supra Section A.1.
  • Proposal for a Directive of the European Parliament and of the Council on Cross-border Mergers of Companies with Share Capital, presented by the Commission, November 18, 2003, COM(2003) 703 final; for an overview see Siems, supra n 120.
  • Eg “Cross-border Deals in the European Union: Merger Muddle”, Economist, 4 December 2004, 35.
  • Directive 90/434 EEC [1990] OJ L225/1, 20, Art 4(1); see Dammann, supra n 71, 491. In the US, reincorporation into another state is normally considered a “reorganization” (IRC s 368(a) (2004)) not giving rise to taxation. Cf Subramanian, supra n 18, 1802. On tax impediments in Europe, see Meilicke, supra n 44, 804; HF Hügel, “Steuerliche Hindernisse bei der internationalen Sitzverlegung” (1999) 28 Zeitschrift für Unternehmens- und Gesellschaftsrecht 71.
  • Case C–09/02 Hughes de Lasteyrie du Saillant v Ministère de l'Economie (not yet reported).
  • eg J Kleinert and P Probst, “Endgültiges Aus für steuerliche Wegzugsbeschränkungen bei natürlichen und juristischen Personen” (2004) 47 Der Betrieb 673, 674; Tröger, supra n 31, 17; but see G Parleani, “Relocation and Taxation: the European Court of Justice Disallows the French Rule of Direct Taxation of Unrealised Gains” (2004) 1 European Company and Financial Law Review 379, 381 (waiting for a legislative solution).
  • The recently adopted European Company Statute (Regulation 2157/2001 EC [2001] OJ L294/1) only allows reincorporation company law arbitrage between states if a corporation is willing to relocate its central administration (Art 7). See L Enriques, “Silence is Golden: The European Company as a Catalyst for Company Law Arbitrage” (2004) 4 Journal of Corporate Law Studies 77, 80–81.
  • Cf R Romano, “State Competition for Close Corporation Charters: A Comment” (1992) 70 Washington University Law Quarterly 409, 413; Romano, supra n 12, 26.
  • RA Posner and KE Scott, Economics of Corporate Law and Securities Regulation (Boston, Little Brown & Co, 1980), 111.
  • BD Baysinger and HN Butler, “Race for the Bottom v. Climb to the Top: The ALI Project and Uniformity in Corporate Law” (1985) 10 Journal of Corporation Law 431, 459–60. This conjecture is supported by evidence that corporations frequently reincorporate in Delaware in the course of an IPO or another major transaction. Romano, supra n 19, 250; Easterbrook and Fischel, supra n 12, 216; contra Romano supra n 19, 266–73; cf Macey and Miller, supra n 36, 478.
  • Romano, supra n 12, 26–28.
  • I Ayres, “Judging Close Corporations in the Age of Statutes” (1992) 70 Washington University Law Quarterly 365, 374–78.
  • Most importantly to the Securities Act of 1933 (15 USC ss 77a–77z-3) and the Securities Exchange Act von 1934 (15 USC ss 78a–78mm).
  • Ayres, supra n 139, 378.
  • Armour, supra n 40, s 2, 5.
  • Cf Kahan and Kamar, “Price Discrimination in the Market for Corporate Law” (2001) 86 Cornell Law Review 1205, 1227 (reporting that only 6% of nonpublic corporations are incorporated in Delaware).
  • Cf Romano, supra n 19, 250; Easterbrook and Fischel, supra n 12, 216.
  • Winter, supra n 12, 254–58.
  • Cf Bebchuk and Ferrell, supra n 17, 131–40 (arguing that states have incentive to cater to managerial interest by allowing excessive takeover defences).
  • Easterbrook and Fischel, supra n 12, 34–35; RA Posner, Economic Analysis of Law (New York, Aspen, 5th edn, 1998), 431–35; contra LA Bebchuk, “Limiting Contractual Freedom in Corporate Law: The Desirable Limits of Charter Amendments” (1989) 102 Harvard Law Review 1820; LA Bebchuk, “The Debate on Contractual Freedom in Corporate Law” (1989) 89 Columbia Law Review 1395.
  • Cf Romano, supra n 135, 415.
  • The main contenders are the “legal origins” theory (see R La Porta, F Lopez-de-Silanes, A Shleifer and RW Vishny, “Law and Finance” (1998) 106 Journal of Political Economy 1113) and the political theory (see MJ Roe, Political Determinants of Corporate Governance (Oxford University Press, 2003)).
  • See, eg R La Porta, F Lopez-de-Silanes and A Shleifer, “Corporate Ownership around the World” (1999) 44 Journal of Finance 471; R La Porta, F Lopez-de-Silanes, A Shleifer and RW Vishny, “Legal Determinants of External Finance” (1997) 52 Journal of Finance 1131; M Becht and A Röell, “Blockholdings in Europe: An International Comparison” (1999) 43 European Economic Review 1049; Roe, supra n 149, 49–56; but see RG Rajan and L Zingales, “What Do We Know about Capital Structure? Some Evidence from International Data” (1995) 50 Journal of Finance 1421 (finding that it turns out that the debt ratios of German companies on debt are overstated when differences in accounting standards are taken into account, but also finding that the debt ratio of French companies was considerably higher than both that of British and German ones); A Antoniou, Y Guney and K Paudyal, “Determinants of Corporate Capital Structures: Evidence from European Countries”, EFMA 2002 London Meetings (2002), available at http://ssrn.com/abstract_id=302833, 6 (stating that leverage is only slightly higher in German companies than in British ones, but considerably higher in French ones).
  • See, eg E Berglöf, “A Note on the Typology of Financial Systems” in K Hopt and E Wymeersch (eds), Comparative Corporate Governance (Berlin/New York, Walter de Gruyter, 1997), 151, 159–64.
  • Bebchuk, supra n 13, 1458; cf Clark, supra n 19, 416–17 (discussing mergers, which are often used to arrange a reincorporation).
  • Bebchuk, supra n 13, 1460–61.
  • ibid, 1461–67 (describing how particular types of market failure make a race to the bottom likely).
  • ibid, 1470–75.
  • Deakin, supra n 87, 206–7.
  • See, eg J Armour, BR Cheffins and DA Skeel, “Corporate Ownership Structure and the Evolution of Bankruptcy Law: Lessons from the United Kingdom” (2002) 55 Vanderbilt Law Review 1699, 1750–52.
  • Inspire Art, supra n 8, para 135. If that statement could be generalised, any mandatory minority protection would be superfluous. However, all major corporate law systems provide at least for some mandatory minority protection, which prima facie indicates that it is not superfluous. For a functional comparison, see H Hansmann and R Kraakman, “The Basic Governance Structure”, in R Kraakman (ed), The Anatomy of Corporate Law (Oxford University Press, 2004), 33, 54–61.
  • See, eg Bebchuk, supra n 13, 1478 (finding that market mechanisms do little to oppose transfers of value to a controlling shareholder); Tröger, supra n 31, 28 (hypothesising that “dominant stockholders may consider reincorporating for purposes of extracting higher private benefits”); Armour, supra n 40, s 3, 25.
  • Armour, ibid (arguing that continental European controlling shareholders might be able to “unwind” and diversify their holdings by reincorporating in the UK). There is some evidence that blockholdings may be unwinding (or have been unwinding) even without regulatory competition. See, eg D Wójcik, “Change in the German model of corporate governance: evidence from blockholdings 1997–2001” (2003) 35 Environment and Planning A 1431–58.
  • Cf A Ferrell, “The Case for Mandatory Disclosure in Securities Regulation Around the World”, (2004) Harvard Olin Discussion Paper No 492, available at http://ssrn.com/abstract=631221, 12 (“As is widely recognised, controlling shareholders—once minority shareholders are in the picture—will tend to ignore the harm caused to minority shareholders’ interests in the course of deciding which actions the firm should undertake”); LA Bebchuk and MJ Roe, “A Theory of Path Dependence in Corporate Ownership and Governance” (1999) 52 Stanford Law Review 127, 143–49 (arguing that, once a concentrated ownership structure is in place, private benefits of control will assure that controllers have no incentive to move towards a dispersed ownership structure).
  • Cf La Porta et al, supra n 149, 1145–51.
  • AA Berle and G Means, The Modern Corporation and Private Property (New York, Macmillen, 1932).
  • MJ Roe, Strong Managers—Weak Owners. The Political Roots of American Corporate Finance (Princeton University Press, 1995), 51–145.
  • Cf Baysinger and Butler, supra n 137, 456–61.
  • Cf E Rock, “Securities Regulation as Lobster Trap: A Credible Commitment Theory of Mandatory Disclosure” (2002) 23 Cardozo Law Review 675; LE Ribstein, “Cross-listing and Regulatory Competition” (2005) 1 Review of Law and Economics 97.
  • Posner and Scott, supra n 121, 111; Easterbrook and Fischel, supra n 12, 215–16.
  • H Hansmann and R Kraakman, “The End of History for Corporate Law” (2001) 89 Georgetown Law Journal 439, 440.
  • Cf Bebchuk, supra n 13, 1455 (stating that scholars of both directions of the race see shareholder value maximisation as the objective of corporate law policy).
  • Cf ibid, 1492 (arguing that state law will be unable to provide the efficient rule as nonshareholder constituencies do not participate in the incorporation decision).
  • Cf Lombardo, supra n 47, 322–30.
  • Cf Bebchuk, supra n 13, 1485.
  • MM Blair and LA Stout, “A Team Production Theory of Corporate Law” (1999) 85 Virginia Law Review 247; see also A Shleifer and LH Summers, “Breach of Trust in Hostile Takeovers”, in AJ Auerbach (ed), Corporate Takeovers: Causes and Consequences (University of Chicago Press, 1988), 33.
  • Cf Bebchuk, supra n 13, 1489; see also Eidenmüller, supra n 4, 2236. I am not trying to argue that tort creditors are particularly well protected by minimum capital and capital maintenance rules as required for public corporations by the Second Directive (supra n 92). For critical views, see J Armour, “Share Capital and Creditor Protection: Efficient Rules for Modern Company Law” (2000) 63 Modern Law Review 355, 371–72; L Enriques and JR Macey, “Creditors versus Capital Formation: The Case against the European Legal Capital Rules” (2001) 86 Cornell Law Review 1165–1204; PO Mülbert and M Birke, “Legal Capital—Is There a Case against the European Legal Capital Rules?” (2002) 3 European Business Organization Law Review 695–732.
  • Cf MJ Roe, “Some Differences in Corporate Structure in Germany, Japan and the United States” (1993) 102 Yale Law Journal 1927, 1943 (comparing the US, where regulation has kept financial institutions fragmented, with Germany and Japan); BR Cheffins, “Putting Britain on the Roe Map: The Emergence of the Berle—Means Corporation in the United Kingdom”, in JA McCahery, P Moerland, T Raaijmakers and L Renneboog (eds), Corporate Governance Regimes (Oxford University Press, 2002), 148, 159 (finding that British banks were more concentrated than their continental counterparts as early as 1920); T Beck, A Demirgüç-Kunt and R Levine, “Bank Concentration and Crises” (2003) World Bank Policy Research Paper No 3041, available at http://ssrn.com/abstract_id=432081 (data on concentration in the banking industry).
  • Deakin, supra n 87, 207.
  • Regulation 2157/2001 EC [2001] OJ L294/1.
  • On the parallel case of Canada, where federal incorporation has been permitted as an alternative to incorporation in one of the provinces, see Romano, supra n 12, 118–28 (generally arguing that the federal government, other than a small state, does not have incentives to create good corporate law).
  • See supra n 134.
  • Roe, supra n 25, 588; cf Kahan and Kamar, supra n 22, 679, 741 (arguing that there was no actual state competition, but that it was possible in theory); Bebchuk and Hamdani, supra n 20, 580–83; see also Bebchuk, supra n 13, 1454 (arguing that the threat of federal legislative intervention might prevent decisionmakers in Delaware from introducing value-decreasing statutes); MJ Roe, “Delaware's Politics” (2005) available at http://ssrn.com/abstract=601962 (analysing the interplay of Delaware and federal law from a public choice perspective). On the Sarbanes—Oxley provisions on audit committee see, eg LE Mitchell, “The Sarbanes—Oxley Act and the Reinvention of Corporate Governance” (2003) 48 Villanova Law Review 1189, 1198 (speaking of a “federalization of corporate governance”).
  • The Second Circuit includes the states of New York, Connecticut and Vermont (28 USC s 41), and thus adjudicates in many cases involving securities law.
  • Roe, supra n 25, 592.
  • In the course of the twentieth century, the issue of federalisation of corporate law was discussed several times. See ibid, 602–7. One important example is the Delaware case law on hostile takeovers.
  • ibid, 643–44.
  • See, eg Clark, supra n 19, 546–48.
  • Cf Modernising Company Law and Enhancing Corporate Governance in the European Union—A Plan to Move Forward (COM [2003] 284 final) available at http://europa.eu.int/eur-lex/en/com/cnc/2003/com2003_0284en01.pdf, last accessed 1 May 2005.
  • Cf E Ferran, Building an EU Securities Market (Cambridge University Press, 2004), 61–126 (discussing the Lamfalussy process).
  • Directive 2004/25 EC [2004] OJ L142/12.
  • See, eg Ferran, supra n 187, 116–17 (discussing the impact of the dispute about the status of Gibraltar on the takeover directive).
  • KonTraG—Gesetz zur Kontrolle und Transparenz im Unternehmensbereich (law on control and transparency in business), 27 April 1998, (German) BGBl 1998 I, 786; see, eg D Dörner, “Ändert das KonTraG die Anforderungen an den Abschlußprüfer?” (1998) 42 Der Betrieb 1, 1 (stating that the legislation was the result of corporate governance scandals).
  • The FMAG of 2001 (Bundesgesetz über die Errichtung und Organisation der Finanzmarktaufsichtsbehörde, Austrian BGBl I 2001/97) resulted in an increase and differentiation of the auditor's liability cap and an introduction of mandatory auditor rotation. See C Nowotny and M Gelter, “Die Prüferrotation nach dem FMAG” (2001) 11 Österreichische Zeitschrift für Recht und Rechnungswesen 325; W Dehn, “Die Haftung des Abschlussprüfers nach s 275 HGB (nF)” (2002) 50 Bank-Archiv 377.
  • Enron was incorporated in Oregon. See, eg M Cole, “‘Delaware Is Not a State’: Are We Witnessing Jurisdictional Competition in Bankruptcy?” (2002) 55 Vanderbildt Law Review 1845, 1874.
  • Good examples are suits for damages due to insider trading. See Allen and Kraakman, supra n 19, 590–91. The prohibition of insider trading largely developed from Securities Exchange Act s 10(b) and the SEC rule 10b-5, which were originally directed at fraudulent practices in sales of securities. See Kardon v National Gypsum Co, 69 F Supp 512 (ED Pa 1946); SEC v Texas Gulf Sulphur Co, 401 F 2d 833 (2d Cir 1968), cert denied 394 US 976 (1969); Chiarella v United States, 445 US 222 (1980); Dirks v SEC, 463 US 646 (1983); see Clark, supra n 19, 309–56.
  • Securities Exchange Act, s 14, 15 USC s 78n; SEC Regulation 14A, 17 CFR s 240.14A.
  • See also Roe, supra n 25, 612–14.
  • SEC Proposal No 34–48626 of 14 October 2003, 68 FR 60784.
  • Roe, supra n 25, 599–600.
  • See supra n 96.
  • See also Tröger, supra n 31, 54 n 225.
  • Ultimately, those statutes go back to an English statute of 1571. See Allen and Kraakman, supra n 19, 140; Twyne's Case (1601) 3 Coke 80b, 76 ER 809; see also Clark, supra n 19, 44–45 n11.
  • Uniform Fraudulent Transfer Act, s 4(a)(2)(i).
  • Uniform Fraudulent Transfer Act, s 4(a)(2)(ii).
  • On the discussion, see Clark, supra n 19, 88–90; eg Wells Fargo Bank v Desert View Building Supplies, 475 F Supp 693 (D Nev 1978); In re Jenkins Landscaping and Excavating, Inc, 93 BR 84 (WD Va 1988); In Re Dondi Financial Corp, 119 BR 106 (Bkrtcy, ND Tex 1990); but see RO Kummert, “State Statutory Restrictions on Financial Distributions by Corporations to Shareholders: Part II” (1984) 59 Washington Law Review 185.
  • Second Directive, supra n 92, Art 15.
  • US Constitution, Art 1 s 8.
  • 11 USC, s 548.
  • See Clark, supra n 19, 52–71; Allen and Kraakman, supra n 19, 141–56.
  • There may be some regulatory competition on veil piercing. For example, Nevada has promoted its corporate law with the argument that veil piercing is more difficult than in all other states. Cf Kahan and Kamar, supra n 22, 717.
  • See, eg Cole, supra n 192, 1845.
  • Regulation 1346/2000 EC [2000] OJ L160/1.
  • Amtsgericht Hamburg, 14 May 2003, 67g IN 358/02, (2003) 6 Neue Zeitschrift für Gesellschaftsrecht 732; see also Amtsgericht Mönchengladbach, April 27, 2004, 19 IN 54/04, (2004) 26 Zeitschrift für Wirtschaftsrecht 1064 (German court asserting jurisdiction for primary insolvency proceedings over objection of the company).
  • In Re Daisytek-ISA Ltd and others, [2004] BPIR 30. A German court, the Amtsgericht Düsseldorf, initially considered English insolvency proceedings void in its decision of 6 June 2003, 502 IN 126/03, (2003) 25 Zeitschrift für Wirtschaftsrecht 1363, but finally had to amend this decision after the case was remanded by a higher court. See AG Düsseldorf, 12 March 2004, 502 IN 126/03, (2004) 26 Zeitschrift für Wirtschaftsrecht 623.
  • In Re Eurofoods IFSC Ltd. [2004] IESC 45 (27 July 2004).
  • In Inspire Art, supra n 8, para 133, the ECJ refers to the criteria set out in Case C–55/94 Reinhard Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano [1995] ECR 4165. National measures hindering or making less attractive the exercise of the freedoms “must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the public interest; they must be suitable for securing the attainment of the objective which they pursue, and they must not go beyond what is necessary in order to attain it”.

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