Exit clauses in the statutes can be a proven and effective way to resolve blockages. The very existence of such a clause in shareholder contracts and statutes creates a potential threat, which can certainly have a disciplinary effect, since shareholders reconsider their own position on the conflicting position. If the proverbial “horse has already left the barn” and a dispute between shareholders escalates, the resolution of the dispute is generally costly and the outcome uncertain, unless the statutes and other agreements provide for appropriate provisions. A deadlock clause or deadlock resolution clause is a contractual clause or a series of clauses contained in a shareholders` pact or any other form of joint venture agreements that determine how to resolve disputes on key corporate governance issues. However, the risk of abuse of the launch clauses, which still exists in principle, should not lead to their general disability. For example, It is assumed that John and Mary have a 50/50 partnership in a furniture factory in the city. The net assets of his project is 5 million R. John wants to leave the company because of the ongoing conflict with Maria. Fortunately, they had included a “Texas Shoot Out” clause in their original agreement.
Shareholder disputes can jeopardize the sustainability of companies, especially in the case of 50/50 joint ventures. Below is an overview of corporate law instruments to avoid or overcome the dreaded deadlocks. Most of Deadlock`s provisions focus on redundancy provisions. They are based on the principle that a successful business should not be destroyed simply because the two partners cannot agree on an essential issue; the value of the business as a current business should be preserved and a fair way for a party to be able to comply with a fair compensation to forego its stake in the business. It is also necessary to allow sufficient time to allow a shareholder, for example, to secure financing through the loan for the acquisition of the stake. In order to counter the risk of abuse and, in particular, the possible invalidity of the clause, it is also advisable to agree that the purchase price determined by the sales clause does not fall below book value. In particular cases, scepters can position themselves on admissibility, for example. B where one of the two shareholders is unable to finance a takeover bid and the mechanism for enforcing the closing procedure, which is detrimental to him, should be avoided as much as possible. A variant of the mechanism discussed above (the Texas Shoot-out) is also common in a 50:50 joint venture. It is sometimes referred to as “the Mexican shooting or the Dutch auction.” In order to avoid disputes over whether or not the firing mechanism is involved, it is advisable to clearly define when there is a dead end and in what impasse a shooting mechanism should engage. This may be the case, for example. B, in the event of a deadlock in the context of an essential, contractually defined, corporate governance issue.
If a party does not wish to expose itself to the risk associated with such clauses, the Nuremberg Oberlandesgericht believes that it should not participate in such a procedure and that it should not agree with the shareholder on an exit clause. According to the decision of the Nuremberg Oberlandesgericht a subsequent financial imbalance should not lead to inefficiency. All shooting clauses have in common the risk that a shareholder will misleass a immobility to trigger the firing mechanism. For example, it is possible that one shareholder may want to take advantage of the existence of a dead end to put pressure on the other shareholder.