## Facts

- Deutsche Bank AG’s general meeting approved a capital increase of DM 75,000,000 aimed at increasing non-German share ownership to facilitate listings on certain foreign stock exchanges.
- The resolution excluded existing shareholders’ statutory preemptive subscription rights, enabling placement of the new shares primarily with foreign investors.
- A group of shareholders filed an action to set aside the resolution, arguing the exclusion unlawfully impaired shareholder rights under the Stock Corporation Act provisions governing preemptive rights and authorized capital.
- Deutsche Bank justified the exclusion as necessary to achieve foreign-listing and international capital-market objectives and asserted no workable alternative would accomplish the listing strategy while preserving full preemptive rights.
- The trial court dismissed the challenge; the appellate court declared the resolution void; Deutsche Bank sought review by the Federal Court of Justice (II Civil Senate).

## Issues

1. Whether a capital increase excluding preemptive rights to obtain or improve access to foreign stock exchanges can be materially justified under the statutory framework governing preemptive rights and authorized capital.
2. Whether the exclusion satisfied proportionality and fair-treatment requirements by appropriately balancing corporate objectives against dilution and disadvantage to existing shareholders.

## Decision

- The Federal Court of Justice recognized that exclusion of preemptive rights can be permissible if grounded in a specific, concrete entrepreneurial (corporate) interest, including obtaining or strengthening foreign stock exchange listings.
- The court required strict proportionality review, including a balancing of the corporate objective against the extent of dilution and other disadvantages imposed on existing shareholders.
- The court treated the general meeting as having business discretion to pursue legitimate corporate goals, but held that discretion is limited and remains subject to substantive judicial review when core shareholder rights are impaired.
- Publicly available summaries emphasize the doctrinal framework and do not clearly establish the precise case disposition (e.g., affirmance or reversal of the appellate judgment).

## Legal Principles

- Exclusion of statutory preemptive rights is not per se invalid; validity depends on a concrete corporate interest and substantive justification.
- Courts must conduct a proportionality analysis assessing whether the exclusion is an appropriate and best-suited means to pursue overriding corporate interests.
- Judicial review must weigh shareholder protection against dilution (the function of preemptive rights) against the demonstrated corporate need for the measure, including whether less rights-restrictive alternatives were feasible.
- Corporate aims tied to foreign listings and attracting foreign investors may qualify as legitimate corporate interests capable of justifying a preemptive-rights exclusion, if implemented on fair terms and within proportionate limits.

## Conclusion

The court treated foreign-listing objectives as a potentially legitimate basis to exclude preemptive rights, but conditioned permissibility on a concrete corporate purpose and a strict proportionality-and-balancing review to protect shareholders from unjustified dilution.


Deutsche Bank AG, BGHZ 125, 239 (Bundesgerichtshof 1994)