Avoiding or Winning Shareholder Disputes

published by Haufe-Verlag

Alexander Singer and Florian Kreis discuss their book “Avoiding or Winning Shareholder Disputes(original title: Gesellschafterstreit vermeiden oder gewinnen), released in 2018 under German law by the prestigious publishing house Haufe.

For more than 30 years, Alexander Singer has had the opportunity (and necessity) to experience shareholder disputes from various perspectives: Previously, as an entrepreneur, he was personally involved in shareholder disputes three times.

The interest of Florian Kreis in strategy, entrepreneurship, and the human element led him to shareholder disputes from the start of his professional career, and his fascination with this topic has not waned since.

Now, as attorneys, Alexander Singer and Florian Kreis guide shareholders, managing directors, and supervisory boards through numerous shareholder disputes. With this book, they aim to share their experiences.

This book is primarily aimed at prospective or current shareholders and managing directors who want to avoid shareholder disputes, or are already involved in (and wish to win) such disputes. It is also directed at attorneys and other advisors seeking doctrinal solutions. Additionally, attorneys and other advisors looking for practical experience, especially regarding strategic considerations and psychological elements of shareholder disputes, will find valuable insights in this book.

The goal of this book is to sharpen your awareness of problems and enhance your ability to recognize situations prone to disputes at an early stage. No book can offer a solution for a specific shareholder dispute, let alone a patent solution for all shareholder disputes, as each is driven by different personalities, has different causes, and its own dynamics. Thus, each dispute requires its own, individual solution. Consequently, our book does not claim to be comprehensive, nor can it replace the need for consultants. Accordingly, it does not cover all aspects essential to forming a company or in an ongoing company, but focuses on those important for avoiding or managing shareholder disputes.

The majority of shareholder disputes occur in limited liability companies (GmbHs), which are the primary focus of our book. However, other forms of companies, especially partnerships and stock corporations (AGs), are also discussed. Many of the explanations applicable to these forms of companies are also relevant for ARGE, a form of partnership particularly important in the construction industry for implementing large projects, usually organized as a civil law partnership (Gesellschaft bürgerlichen Rechts or GesbR).

For better understanding, our book describes important processes in an objective manner, taking into account the perspectives of different parties involved, especially where different consequences emerge. Read these objective descriptions from your position’s perspective. You will recognize what actions you can take and what actions to expect from the opposing side.

Some explanations (the less legal ones) might evoke a feeling of “already knowing” for you. Indeed, some statements may seem trivial and logical at first glance. However, practice shows that shareholders retrospectively view these topics as obvious, despite not considering them in advance or simply overlooking them. Revisiting already known considerations can also be beneficial!

The structure of this book follows the “life cycle” of a company. Chapter 3 offers considerations you should make before founding a company, Chapter 4 deals with the founding process itself, Chapter 5 provides useful measures for avoiding disputes during the company’s operation before the outbreak of a shareholder dispute and introduces preparatory measures to secure your position in case of a dispute, and Chapter 6 presents recommended actions and strategies after a dispute has erupted. This structure allows you, as the reader, to jump to the part of the book that matches your individual situation, albeit necessitating numerous references and some repetition.

Chapters 7 to 11 discuss family businesses, freelancers, startups, conglomerates (joint ventures), and public-private partnerships.