Squeezing Out Minority Shareholders: Vested Interest vs Economic Interest

In a high-profile case of global interest, the Austrian Constitutional Court ruled on the Squeeze Out Act (the "Act") that was introduced in 2006. The Act, on its face, permits a squeeze-out of minority shareholders by shareholders holding at least 90% of the shares. Conspicuously over and above the EU requirements on squeeze-outs in takeovers, under the Act squeeze-outs are generally possible without supporting justification or grounds.

The applicant in the instant case, a minority shareholder holding shares of 1%, had argued that minority shareholders' property rights are severely and disproportionately restricted by the Act and that the Act is thus unconstitutional.

Economic vs Vested Interest: What carries more weight in corporate decision-making?