Cash compensation for the squeeze-out at HypoVereinsbank to be decided by the Bavarian Supreme Court

by Attorney-at-Law Martin Arendts,  M.B.L.-HSG

In the appraisal proceedings relating to the squeeze-out at HypoVereinsbank (HVB) registered in 2008, the Munich Regional Court I (Landgericht München I) dismissed the applications for judicial review in the first-instance decision announced on June 22, 2022. Several applicants have filed appeals against this decision. Contrary to the opinion of the Regional Court, there are no de minimis limits, if only for constitutional reasons (requirement of "full" compensation for excluded minority shareholders), certainly not in the amount of 5% or 10% (for sold shareholdings), as assumed by the Regional Court. Therefore, the appropriate cash compensation is to be set at a higher level.

The Bavarian Supreme Court (Bayerisches Oberstes Landesgericht), which is now responsible for appeals in appraisal proceedings, will decide on these appeals in the second instance (and probably also in the final instance if it does not refer the matter to the Federal Court of Justice or allow an appeal on points of law - for example with regard to the de minimis limit assumed by the Regional Court and assessed differently by several Higher Regional Courts).

Although the Munich Regional Court I considered the cash compensation offered to the HVB minority shareholders to be too low, it did not believe that a deviation of less than 5% was sufficient to establish that the original cash compensation was inappropriate, given the predictive nature of any company valuation.

The court also assumed that the shareholdings sold before the squeeze-out were undervalued, by EUR 208 million in the case of International Moscow Bank and by EUR 182 million and EUR 49 million in the case of two asset management companies. The Regional Court also considered the purchase price set for Bank Austria Creditanstalt to be too low. As this was a contractual agreement in which the contracting parties had greater leeway, the court set the threshold for the assumption of a disadvantage to be compensated at 10%, which was higher than in the case of the direct structural measure. With a deviation of 9.18%, this limit had not been exceeded.

Munich Regional Court I, decision of June 22, 2022, Case No. 5 HK O 16226/08
SdK Schutzgemeinschaft der Kapitalanleger e.V. et al. v. UniCredit S.p.A.
302 applicants (originally)
joint representative: RA/WP/StB Walter L. Grosse, 80333 Munich, Germany
Procedural representatives of the respondent, UniCredit S.p.A.:
Freshfields Bruckhaus Deringer, 60322 Frankfurt am Main, Germany