Redemption Procedure
The redeemer shall without delay notify the company of the commencement and termination of the squeeze-out right and redemption obligation. The squeeze-out right arises when a shareholder owns more than 90% of the company's shares and votes. Once the company has received the aforementioned notice from the redeemer or other reliable information on the commencement or termination of the squeeze-out right or redemption obligation, the company shall without delay notify the commencement or termination thereof to be registered with the Trade Register.
If the squeeze-out right is not notified to the company on time, the shareholder neglecting the notification shall be convicted to a fine for violation of the Companies Act [Criminal Liability].
If the redemption issue cannot be solved with voluntary means (e.g. as a consequence of a buying offer made by the shareholder obligated to the redemption), the company or the redeemer may apply for the commencement of the redemption proceedings from the Redemption Committee of the Central Chamber of Commerce. On receipt of the application, the Redemption Committee of the Central Chamber of Commerce appoints a required number of impartial and independent arbitrators, as well as a trustee to represent the minority shareholders. The proceedings are not affected if the minority shareholders are some of them are unknown, as the trustee represents all minority shareholders and all notifications made during the proceedings are only delivered to the active parties. In principle, the arbitration proceedings become pending once the application or a copy thereof has been served on the counter-party (the trustee). The provisions of the Arbitration Act are applied to the arbitration proceedings to the extent appropriate.
The conditions for redemption must exist at the time the arbitration proceedings become pending. Changes in the circumstances occurring during the arbitration proceedings do not result in the lapse of the squeeze-out right or redemption obligation. Thus, the squeeze-out right of the redeemer does not lapse if he/she transfers shares in the company during the arbitration proceedings in such a quantity that his portion of the company’s shares falls under the prescribed limit of ninety per cent (90 %) and redemption demand made by the minority shareholder is not cancelled by transfers made during the arbitration proceedings.
The arbitrators shall announce their arbitration award in the trade register in two weeks. A party discontent with the arbitral award may appeal it before the District Court within 60 days of the registration of the award. The decision of the District Court is open to appeal before the Supreme Court, if the Supreme Court grants leave to appeal.