Compliance + Governance Blog

The current UniCredit/Commerzbank and Schaeffler/Vitesco cases revive the longstanding, but still very much unsettled, legal questions of whether, and if so how, synergies and stock prices should be treated in company valuations. Does the proposition that Ballwieser put so pointedly in 1997 still hold true: “There seems to me to be no real dispute that synergy effects must be taken into account in mergers and acquisitions. After all, you pay for what you can extract. It is as simple as that.”

Of course, it is not quite that simple, as we explained in Part I of our article, using UniCredit/Commerzbank as an example, on the REUTER Corporate+Compliance Blog of May 25, 2026. Over the past 25 years, legal debate has developed a strong tendency to value each of the companies involved on a stand-alone basis, thus generally excluding synergies, and to accord greater weight to stock prices. In Part I, however, we also showed that this approach can be misleading where a corporate integration measure generates substantial synergies that the stock market leaves unreflected because the market is unable to assess them. Synergies are a “hidden potential” inherent in a company, much like hidden reserves.

In Part II of our article, we further substantiate our doubts as to whether stand-alone stock prices should be treated as conclusive, using Schaeffler/Vitesco as our example. The fact that potential is “hidden” does not mean that it can be disregarded.

The UniCredit/Commerzbank and Schaeffler/Vitesco cases revive the long-standing, yet still highly virulent legal questions how synergies and stock market prices are to be treated in company valuations. In the legal and academic discussion of recent years, there has been a clear tendency across different valuation contexts to assess the companies involved on a “stand-alone” basis, i.e. generally without taking synergies into account, and to attribute greater binding force to stock market prices. The extent to which this tendency is questionable is illustrated by the current UniCredit/Commerzbank and Continental/Vitesco cases. This analysis is supported by the 2026 revision of the Standard S1 of the Institut der Wirtschaftsprüfer (IDW) on business valuation. The revised version remedies old points of criticism raised by the author with respect to the treatment of synergies in previous S1 versions. The valuation issues also have an impact on the duties of the directors of the involved companies. The following blog addresses these issues using UniCredtit/Commerzbank as a mere sample. Schaeffler/Vitesco will be dealt with in a forthcoming blog.

In the Wirecard case, the German Federal Court of Justice (BGH) issued a decision on November 13, 2025 (IX ZR 127/24), resolving a highly controversial question: If a management board violates ad-hoc disclosure obligations or other capital-market disclosure duties, and shareholders therefore bring capital-markets-based damages claims, but the company subsequently enters insolvency proceedings, what priority do such damages claims have in the insolvency? Are they treated as ordinary insolvency claims of other creditors, or do they rank behind them as membership-related rights? According to the BGH, the latter applies, because the claims are rooted in the shareholders’ status as owners of the company’s shares. This subordinated ranking can significantly improve the recovery rate of ordinary creditors.

The BGH derives the subordination from a comparison of claims from the perspective of insolvency law and its task of allocating the debtor’s financial shortfall appropriately: Who is “closer” to bearing the deficit? This convincing starting point highlights, however, two blind spots in capital-markets law: Capital-markets damages claims ignore (i) that it is the fellow shareholders who ultimately bear the economic loss of the stock purchasers, and (ii) that those who sold shares at an inflated price during the misinformation period may keep that benefit. The sellers thus pocket the gain that the remaining shareholders must compensate. This violates the constitutional guarantees of equal treatment and protection of share ownership.

Breaches of law arising from delayed filing for insolvency account, by case numbers, for the bulk of executive liability claims. At the same time, the number of insolvencies is rising again. The number of court decisions dealing with D&O liability issues or with questions of coverage by D&O insurers is also increasing. For that reason, we periodically make legal forays on our blog into practical aspects of delayed insolvency filings. The following blog contribution addresses the Federal Court of Justice (BGH) judgment of 2014, which made it easier for D&O insurers in coverage litigation to invoke the defence of knowledge where the insured managing director has breached an elemental professional duty (a cardinal duty). The Frankfurt Higher Regional Court (OLG Frankfurt) deepened and extended this case law in three decisions from 2025 concerning breaches of the duty to file for insolvency and the prohibition on payments once insolvency has arisen. The “cardinal-duty case law” inevitably increases the difficulty of the questions insolvency practitioners must confront when pursuing liability claims against managing directors with a view to attain D&O coverage. These difficulties also point to a deeper structural flaw in D&O insurance and its typical knowledge exclusion. This Survey 6 presents the OLG Frankfurt decisions against that background. It opposes a methodologically unfortunate lateral shift in the questions that are at the core of the matter. Once again the finding of US Supreme Court Justice Oliver Wendell Holmes of 1904 holds true: Hard cases make bad law.

Are compliance management systems (CMS) merely legal exercises with no real effect? Empirical evidence suggests that the effectiveness of CMS cannot be demonstrated. Suggestions on how to assess the effectiveness of CMS quantitatively or qualitatively do not, as things stand today, provide a reliable measurement, but only partial insights that tend to obscure the bigger picture. In the absence of reliable measurability, common standards (DIN, IDW PS 980, COSO, etc.), companies, and auditors are resorting to increasingly comprehensive and expensive mandatory programs - a “race to best practice” in order to avoid liability. This costs money that is lacking elsewhere, as well as time, systematically promotes risk aversion in companies beyond the realm of compliance, and is likely to dampen the quest for opportunities. All of this is often lamented, but accepted. However, the mentioned empirical findings have palpable legal consequences: Obligations that entail costs and other burdens must be evidence-based. Standards that are not empirically anchored are therefore not binding, especially since “CMS overinvestment” can itself be negligent. Instead of working through standards, company management can and must rely on their own intuition and trust, the latter all the more so the more “participatory” and “agile” the company is organized. This can—already at the level of legal application—further enhance corporate This can counteract further internal bureaucracy within companies, even at the level of legal application. The author has explained this in more detail in an article in the Journal of Commercial and Economic Law (ZHR 2025, 433 ff.) and in an interview in BOARD 2025, issue 3. The following blog post summarizes the considerations briefly. The BOARD can be found on the Blog.

According to a new CJEU ruling, fines under the General Data Protection Regulation are calculated based on group turnover. Does this also apply to the Digital Services Act and the Artificial Intelligence Act? Furthermore, the German Federal Court of Justice has referred to the CJEU the question of whether a company can seek recourse from responsible managers for corporate fines. In other words, the liability climate is becoming more challenging. This blog post explores these topics.

On a separate note I take licese to add the following: Economically speaking, it is the shareholders who bear the cost of corporate fines. This is inadequate and, in my opinion, violates EU fundamental rights. Increasingly harsher EU obligations also lead to ever more sophisticated, comprehensive compliance management systems, and systematically increase risk awareness and risk aversion in companies without correspondingly fostering the search for opportunities. This entails further high costs for companies and the economy at large and raises the question whether or not such costs are warranted in view of the few “black sheep” and the challenges which we presently face.

The number of D&O claims is rising - but why are more and more managers (including former managers) being targeted? This article provides an exclusive insight into current developments in manager liability: from typical project errors to antitrust violations and the recovery of state aid. With data from over 500 claims and concrete reasons for liability, the analysis shows how quickly a management error can turn into a risk worth millions - and why a good corporate strategy is more important today than ever.

Legal violations related to to delayed insolvency filings represent the most frequent basis for managerial liability claims. At the same time, the number of insolvency proceedings is once again on the rise. For this reason, our blog from time to time makes legal forays into practical aspects of delayed insolvency filing matters that may carry significant weight in court proceedings or settlement negotiations. The following post is the fifth in this series. It addresses a decision of the German Federal Supreme Court, pursuant to which managers remain liable for delayed insolvency filing even after end of their office and for contracts with new creditors. This is a substantial extension of liability and also has an impact on D&O insurance.

Legal violations due to delayed insolvency filing constitute the majority of cases in manager liability. Therefore, we periodically make legal forays into this topic on our blog. The focus of our fourth foray is a ruling handed down by the German Federal Court of Justice (BGH) dated January 25, 2025, which addresses one of the key issues in the liability of company directors for payments made when insolvency is imminent—namely, the "cessation of payments" as an indicator of insolvency. The ruling confirms: The concept of "illiquidity" is complex, proving it in court is challenging, and it remains a central issue in many disputes in this area.

The Wirecard case raises complex liability issues. No less difficult is the terrain of D&O insurance, in which the former Wirecard CEO Markus Braun has already initiated several court proceedings. Of more general interest for D&O insurers, however, is a new, detailed ruling handed down by the Higher Regional Court of Frankfurt on the claim of another Wirecard manager, namely the former head of accounting, who wanted to be reimbursed by the D&O insurer for the costs of his legal defense and for public relations consultants. The Higher Regional Court of Frankfurt dismissed the claim against the insurer because the sum insured had been exhausted, and in its ruling addresses key issues of D&O insurance coverage law, in particular, how insurance sums are to be distributed if they fall short of the total sum of damages Some of the issues dealt with often arise in practice and are neuralgic. The judgment is carefully and broadly reasoned. It is therefore outlined on our blog, even though the OLG has allowed an appeal, meaning that the last word has not yet been spoken.