Carsten Gerner-Beuerle

The Costs of Separation: Friction between Company and Insolvency Law in the Single Market

The increase in corporate mobility and choice of law within the EU has dominated much of the academic writing in European company law over the last two decades. One aspect that has not yet been appreciated in the debate relates to the way in which national company law interacts with and depends on features of the national legal system outside of company law. In this article, we explore this interaction and its role in the creation of integrated, coherent regulatory systems on the national level. We argue that increased corporate mobility has the potential to tear these coherent systems apart, creating significant frictions in the regulatory framework for internationally operating companies. These frictions may consist of regulatory gaps or multiplication of legal requirements, as private international law rules are applied inconsistently across Europe. More importantly, however, even consistent application of conflict rules would often fail to produce the desired regulatory outcomes due to cross-doctrinal interdependence within any national legal system. This paper examines both problems by analysing an area where functional interdependence is especially pronounced: the regulatory framework in relation to companies in the “vicinity of insolvency�?. We show how conflict of law rules and the territorial reach of administrative and criminal mechanisms create legal uncertainty and result in incoherent regulatory solutions, potentially impeding the efficient functioning of debt markets. We conclude that this is in essence a design flaw in the way we deal with the increasingly international reach of corporations within the EU.

Diffusion of Regulatory Innovations: The Case of Corporate Governance Codes

Corporate governance codes are an increasingly prominent feature of the regulatory landscape in many countries, yet remarkably little is known about the determinants of corporate governance reform. Potential determinants include: (1) the diffusion of an international benchmark model of good governance; (2) a country’s legal system; (3) the desire to attract foreign investors; and (4) the influence of interest groups. I construct a proxy for the investor-friendliness of 52 corporate governance codes of different jurisdictions and collect data on the code issuers. I find strong evidence that the drafters of codes emulate international benchmark models and that jurisdictions belonging to different legal traditions use different regulatory strategies, some evidence that portfolio equity inflows are associated with the investor-friendliness of codes, and no evidence that interest groups succeed in affecting rules. The article suggests a method for the modeling of legal evolution, convergence, and the political economy of corporate governance codes.

The Evolving Structure of Directors’ Duties in Europe

Corporate mobility in Europe continues to be on the rise, both creating space for regulatory arbitrage by companies and influencing legislative decisions in corporate law and related fields. This has triggered debates in European company law that centre on questions of harmonisation, cross-jurisdictional convergence and the superiority of certain regulatory approaches and legal families. This article uses a large cross-country sample of EU Member States to classify legal strategies in corporate governance and assess claims of convergence and the superiority of legal families. We analyse board structure, the most important duties of directors, namely the duties of care and loyalty, questions of enforcement, and the position of directors in the vicinity of insolvency, and develop a taxonomy of legal strategies across the Member States. We find that, in spite of differences in regulatory technique and legal tradition, the effect of the legal strategies employed by the Member States is often remarkably similar and legal systems exhibit interconnections in the form of mutual learning across borders. In addition, we show that, in contrast to claims by parts of the literature, judicial innovation is not restricted to particular legal families. We argue that all legal families are, in principle, well equipped to react to new developments and draw on general or unwritten principles of law to fill regulatory gaps. However, a precondition for the emergence of effective rules seems to be a sufficiently large body of case law and, accordingly, access to the courts and an efficiently functioning judicial system. Consequently, we submit that questions of enforcement are of greater importance than a particular legislative or regulatory style.

The Mysteries of Freedom of Establishment after Cartesio

The judgement of the European Court of Justice in Cartesio was eagerly awaited as a clarification of the questions concerning the scope of the right of establishment (Articles 43, 48 EC) that remained after previous landmark decisions such as Centros, Uberseering, and Inspire Art. The article analyses the implications of Cartesio in light of different scenarios of transfer of the registered and the real seat within the European Union. It assesses the interrelations of right of establishment and private international law rules for the determination of the law applicable to companies and concludes that the case law of the European Court of Justice after Cartesio, rather than providing for a coherent system of European company law, leads to arbitrary distinctions and significantly impedes the free movement of companies.

Cross-border reincorporations in the European Union : the case for comprehensive harmonisation.

ABSTRACT Despite recent decisions of the Court of Justice that liberalise inbound and outbound reincorporations, several Member States still prohibit these transactions or make them impossible or impractical. Even where reincorporations are available in principle, significant legal uncertainties often exist due to a lack of clear and interoperable rules. This situation may, for instance, jeopardise the interests of creditors and minority shareholders of the emigrating companies in circumstances where the involved jurisdictions do not provide for an explicit regulation of cross-border reincorporations aimed at protecting these stakeholders. Furthermore, when procedural rules are unclear or lacking, companies might be struck from the relevant register of the country of origin without being entered in the register of any other Member States. We argue that, as a consequence, harmonisation of the reincorporation process is necessary, and that it is desirable to reach a high minimum standard of creditor and minority shareholder protection.

Die Haftung von Emissionskonsortien: eine rechtsvergleichende Untersuchung des deutschen und des US-amerikanischen Rechts

The regulation of the capital market has been in crisis since the start of the new millennium. A series of cases of fraud and company insolvencies on a scale never before experienced in Europe and overseas has resulted in the loss of billions and shattered the trust of investors in the capital market. This work examines the legal structures of the primary market and analyses possible methods of the further development of the German Investor Protection Act based on the example of the underwriting bank or rather the underwriting syndicate, which consists of several banks.