L'aménagement des droits des actionnaires après l'ordonnance du 24 juin 2004

2. Protective measurements at the time of the disappearance of actions preferably

298. - « It often goes from there from the preferred stocks and other actions to priority dividend without voting rights or certificates of investment like second homes : the two only happy moments for the transmitting officers of the company are that of the creation of the actions preferably (the purchase of the house of holidays) and the disappearance of the same actions (the sale of this same house »^553(*). And the major problem posed at the transmitting companies by these titles, because especially of the rigidity of the legal mode of the actions with priority dividend and the certificates of investment, was to find the means of getting rid of financial instruments become cumbersome.

299. - The mode of the old preferred stocks was not worried to give one or of the solutions of exit. In other words, it did not organize any procedure making it possible to put an end to the advantages granted to these actions.

That did not prohibit with the transmitters to envisage or decide, under certain conditions, and with the agreement of the carriers, the operations to this end. The simplest way consisted in stipulating the privileges for one duration given or determinable, with the expiry of which the advantages became null and void and the preferred stocks were purely and simply comparable with the ordinary actions.

It remains that, in many cases, no one could not predict the duration of the allotted advantages, once the preferred stocks were emitted.

300. - The writers of the ordinance of June 24 2004 took account of these considerations and spared convenient flexibilities by drawing two ways : the conversion and the repurchase of the actions preferably.

By doing this, the legislator seems to consider that the particular rights attached to the actions preferably have necessarily an end other than the expiry of the duration of the transmitting company. This subjacent intention would be then founded^554(*). It is indeed banal to note that such context, such circumstances which, at a given time, justify to allot rights particular to the profit of such titles, often lose their relevance with the wire of time. This natural tendency will probably develop still with the actions preferably since they authorize with going even further in the definition of the particular rights which can be granted to them.

In any assumption, it would thus be necessary « to take the legal rules relating to the conversion and the repurchase of the actions preferably like an invitation made to the transmitters question itself, as of their creation and in all the cases, on the conditions under which the benefit or the load of the allotted particular rights can end »^555(*).

301. - With conversion, the holder of the titles remain shareholder. Contrary, the repurchase carries, in general, the exit of the shareholder ; it thus offers an advantage for the investors whose intention is to carry out their profit with the one given period expiry.

There also remains always possible to preferably create actions without exit organized in advance. It will then rest with the transmitter to try to make take required measurements, with in particular the agreement of the special assembly of the carriers, to make disappear if necessary the particular rights the desired moment. Such a situation- the absence of methods of exit planned for the actions preferably- however is strongly disadvised because, in this case, it would become extremely complex- often impossible^556(*)- to preferably implement the disappearance of the actions in the event of refusal of a majority of carriers joined together in special assembly^557(*).

As, the transmitting company will have, by preoccupation with a prudence, to preferably envisage the disappearance of the actions, as it is by way of conversion (A) or way of repurchase (b) of the aforesaid actions.

a) The conversion of the actions preferably

302. - Conversion, it is the transformation, the change but not the exchange.

303. - Under article L. 228-14, subparagraph 1st of the Commercial law, the conversion of the actions preferably can take two forms : either the titles are converted into actions preferably another category^558(*), or they are converted into ordinary actions.

The first assumption does not lead to the extinction of the privileges but to the replacement of particular rights by other particular rights of another nature, or to the conservation of certain already allotted particular rights and to the loss of others^559(*).

The second assumption has a clearly defined effect ; the actions preferably lose their own rights to be based in the mass of the ordinary actions. It is about a return towards the common right, i.e. in certain cases a retro-conversion, the actions preferably becoming again the ordinary actions which they were initially.

304. - The article L. 228-12, subparagraph 2 of the Commercial law specifies faculty offered to lay down in the statutes the methods of conversion. In his ratio of 2001^560(*), MEDEF had insisted on the need for allowing the predetermination of the cases of conversion into ordinary actions, in order to avoid the debates which could have course in the past on the legality of such a statutory determination.

305. - The fixing of the methods can naturally cover the convertion rate, seldom given, frequently determinable, which will sometimes call, by precaution, as the above mentioned report/ratio of MEDEF suggests it, the intervention of an expert. Normally, this rate is established according to the value of the title of origin, taking into account the rights which are attached there and of that of the new title also determined according to its own characteristics.

Consequently, if the rate led to replace a title by another title, the operation is without incidence on the capital. If conversion results in replacing existing titles of capital by a number of titles of higher capital^561(*), it results from it necessarily a new issue of capital which is released by charge on an account of premium or reserve. If, in the case reverses, conversion resulted in transforming existing titles of capital into a number of titles of lower capital^562(*), the operation results in a reduction of capital whose amount is normally transfered on an account of premium or reserve coming from a reduction of capital.

It is specified that in this last case- consecutive reduction of capital to conversion-, article L. 228-14, subparagraph 2 of the Commercial law that the creditors can file opposition to conversion,^563(*) this one expects not being able to be undertaken during the time of opposition nor, if necessary, before it was ruled in first authority on this opposition^564(*). During this lapse of time, the actions preferably thus preserve their particular rights, except if the statutes envisaged their suppression as of the moment when the realization of the condition or the arrival of the term is noted on which conversion depends^565(*).

306. - These made observations, it is advisable to distinguish according to whether the methods of conversion were laid down in the statutes (I) or that conversion is decided without the statutes not envisaging it (II).

(i) Conversion in the presence of methods laid down in the statutes

307. - The fixing of the methods covers initially the statement these cases in which conversion operates : unquestionable or dubious term, or condition ; the latter, which should not be potestative, can for example refer with the evolution in some direction that it is of a financial data such as the EBITDA^566(*). In fact there mechanisms had course as regards actions with financial privileges^567(*).

The methods are also financial, namely the parity of conversion^568(*).

308. - When the methods of conversion are laid down in the statutes, like are the rights attached to the actions preferably, all is in this case normally decided as of the emission^569(*).

It is necessary neither for an extraordinary general assembly of the shareholders, nor of a special assembly of the carriers at the time of the realization of the operation. The board of directors or the directory^570(*) then receives the capacities necessary to carry out conversion under the conditions envisaged by the statutes, by application of the articles L. 225-129 to L. 225-129-6 of the Commercial law^571(*).

309. - However, on the assumption that the statutory modification is decided after the emission, the approval of the special assembly of the carriers of actions preferably is required, pursuant to the article L. 225-99 of the Commercial law^572(*).

310. - That there is, because of application of the parity of conversion defined under the articles, increase or reduction of capital, this mechanical variation of the capital does not call a decision of assembly approving the modification of the capital, but simply a observation by the body of direction^573(*) or, on delegation, the president of the directory or the general manager^574(*).

As the report/ratio with the President of the Republic explains it : « the board of directors or the directory will carry out the increase or the reduction of capital resulting from the conversion of the actions preferably into ordinary actions. This new issue of capital is presented indeed only in the form of a simple resultant of the issue of the shares preferably decided by the extraordinary general assembly »^575(*).

311. - Various reports/ratios, for purposes of information of the shareholders, must be written by the body of direction and the auditor.

At the time when the general assembly comes to a conclusion about the inscription in the statutes of the methods of conversion, the board of directors or the directory draws up a report/ratio indicating the methods of conversion^576(*) ; these indications must be carried in the statutes. Moreover, during conversion, another report/ratio is to be established, indicating the conditions of conversion, the procedures of calculation of the conversion ratio and the methods of its realization ; it specifies the incidence of the operation on the situation of the holders of titles of capital and of transferable securities giving access to the capital and, if necessary, indicates the characteristics of the actions preferably resulting from conversion^577(*).

In the two situations, the auditor has on his side to draw up a special report/ratio, on the one hand to deliver his opinion on the methods of conversion^578(*), on the other hand to deliver his opinion on conversion like to the incidence of the operation to the situation of the holders of titles of capital and transferable securities giving access to the capital and to indicate if the methods of calculation of the conversion ratio are exact and sincere^579(*).

312. - Lastly, a question raises certain difficulties : that to know if, when conversion results in a new issue of capital, the absence of reserves available is an obstacle with conversion or not^580(*).

It is necessary initially to have for the spirit that is here causes of it the only par value or even actions representing the new issue of capital resulting from conversion. Consequently, it will not be always of a high amount.

Then, on the assumption that the methods of conversion are laid down in the statutes, it is then advised to make transfer, during the adoption of the statutory clause, on an account of premium or inalienable reserve, the sum necessary to ensure conversion envisaged, with application, if necessary, of the convertion rate which leads to the maximum new issue of capital. This precaution being taken, the difficulty which could occur would result from the observation of losses which, even without being charged, « would start » completely or partially the premium or the inalienable reserve, during effective conversion.

According to certain authors^581(*), this situation would not make nevertheless obstacle with the new issue of capital. In support of this solution, these authors refer to the rules instituted for a long time already to protect the rights of the holders from transferable securities giving access to the capital, in particular in the event of incorporation of reserves. The mechanism is here, according to them, comparable. It requires the constitution of an inalienable reserve of an amount equal to the sum necessary to allot, for example, bonus shares with the holders of transferable securities giving access to the capital^582(*). Once the reserve made up and the right to the bonus shares open, this attribution is inescapable, whatever at the time the situation of the stockholders' equity ; if not, the rights of the holders of transferable securities giving access to the capital would be put in danger, in contradiction with the legal rules.

By analogy, the conversion of actions preferably outcome to a new issue of capital would remain possible in the same situation, which is an additional guarantee for the shareholders^583(*). The solution will not be however the same one if the methods of conversion were not laid down in the statutes or the contract of emission.

* ⁵⁵³ A. VIANDIER, «  Actions preferably  », art préc., p. 1538.

* ⁵⁵⁴ In this direction, A. GUENGANT, D. DAVODET, P. ENGEL, S. of VENDEUIL and S. PAVEC, «  Actions preferably  : questions of experts  (2nd part) «, art préc., p. 1210.

* ⁵⁵⁵ A. GUENGANT, D. DAVODET, P. ENGEL, S. of VENDEUIL and S. PAVEC, «  Actions preferably  : questions of experts  (2nd part) «, art préc., p. 1210.

* ⁵⁵⁶ Taking into account the principle according to which any associate has the right to remain in the company and cannot be excluded from it nor constrained to yield its shares or actions against its liking. V. supra n° 3.

* ⁵⁵⁷ In its opinion of November 3, 2004, the legal Committee of the ANSA strongly incites on the importance to preferably envisage a solution of exit for the actions, at least conversion into ordinary actions. Adde, Mr. GERMAIN, «  Actions preferably  : the new mode of creation and suppression «, in the new right of the transferable securities after the reform of June 24, 2004, art préc.  : «  to attack such the principle of equality within the same class of shareholders appears indeed acceptable only in so far as all these shareholders agree  ».

* ⁵⁵⁸ In this case, the respect of the provisions of the article L. 228-15, subparagraph 2 of the Commercial law is essential. V. supra n° 294. - The memorandum of the limited company, COp cit, n° 285 thinks that this procedure, which deprives the carriers concerned of the voting rights, is distinct from that planned for the particular advantages, requiring, moreover, the designation of a police chief to the contributions  ; this mode would be thus autonomous and different from that related to the creation of the actions preferably. Countered, P.D' HOIR, the reform of the transferable securities & new issues of capital, COp préc., p. 10, which estimates that the procedure of the particular advantages applies.

* ⁵⁵⁹ For example, of the actions preferably are emitted with the characteristics of the old certificates of investment, i.e. with the financial rights of the ordinary actions but without voting rights. They can be converted into actions preferably another category profiting from the same financial rights but for example with the voting rights to the ordinary general assemblies exclusively.

* ⁵⁶⁰ Rep. préc., p. 6.

* ⁵⁶¹ For example, an action preferably converted into two ordinary actions.

* ⁵⁶² For example, two actions preferably converted into an ordinary action.

* ⁵⁶³ Art L. 228-14, Al 2 C. Com.  : «  In the event of conversion of actions preferably into actions leading to a reduction of capital not moved by losses, the creditors whose credit is former to the date of the deposit at the clerk's office of the official report of deliberation of the general assembly, or of the board of directors or the directory in the event of delegation, can file opposition to conversion within the time and according to the methods fixed by decree into Council of State  ».

* ⁵⁶⁴ Art L. 228-14, Al 3 C. COM, art 180 and 206 of the decree of March 23, 1967, modify by the decree of February 10, 2005.

* ⁵⁶⁵ In this direction, A. VIANDIER, «  Actions preferably  », art préc., p. 1538.

* ⁵⁶⁶ V. note n° 462.

* ⁵⁶⁷ J. - J. DAIGRE, france MONOD and france BASDEVANT, «  Actions with financial privileges  », art préc., p. 10, n° 43.

* ⁵⁶⁸ Supra n° 305.

* ⁵⁶⁹ It is specified that, if the methods of conversion would not be specified in the statutes, but in the contract of issue of the shares preferably, this carries the same effects that those evoked will infra n° 308 and S.

* ⁵⁷⁰ Or the qualified body of direction if it is of a SCA or SAS.

* ⁵⁷¹ V. supra n° 28 and S.

* ⁵⁷² Art L. 225-99, Al 2  : «  The decision of a general assembly to modify the rights relating to a class of shares is final only after approval by the special assembly of the shareholders of this category  ».

* ⁵⁷³ Art L. 228-12, Al 3 C. Com.  : «  Constantly of the current year and at the latest during the first meeting according to the fence of this one, the board of directors or the directory notes, if it is necessary, the number and the par value of the actions resulting from the conversion of the actions preferably, during the past year, and makes the modifications necessary to the clauses of the statutes relating to the amount of the authorized capital and the number of the titles which make it up  ».

* ⁵⁷⁴ Art L. 228-12, Al 4 C. Com.  : «  The president of the directory or the general manager can, on delegation of the directory or the board of directors, constantly to proceed to these operations of the exercise and at the latest within the time allowed by decree in Council of State  ». Art 165, IV of the decree of 23 March 1967, introduced by the decree of February 10, 2005  : «  The president of the directory or the general manager can proceed to the operations envisaged with the last subparagraph of the article L. 225-149 of the same code and with the last subparagraph of the article L. 228-12 of the same code at the latest in the month which follows the end of the financial year  ».

* ⁵⁷⁵ Rep. préc., p. 9.

* ⁵⁷⁶ Art 206-5, Al 1st of the decree of 23 March 1967, introduced by the decree of February 10, 2005.

* ⁵⁷⁷ Art 206-3, Al 1st of the decree of 23 March 1967, introduced by the decree of February 10, 2005.

* ⁵⁷⁸ Art 206-5, Al 2 of the decree of 23 March 1967, introduced by the decree of February 10, 2005.

* ⁵⁷⁹ Art 206-3, Al 2 of the decree of 23 March 1967, introduced by the decree of February 10, 2005.

* ⁵⁸⁰ On this question, v. A. GUENGANT, D. DAVODET, P. ENGEL, S. of VENDEUIL and S. PAVEC, «  Actions preferably  : questions of experts  (2nd part) «, art préc., p. 1212.

* ⁵⁸¹ A. GUENGANT, D. DAVODET, P. ENGEL, S. of VENDEUIL and S. PAVEC, «  Actions preferably  : questions of experts  (2nd part) «, art préc., p. 1212.

* ⁵⁸² V. art 242-9 of the decree of March 23, 1967.

* ⁵⁸³ Shareholders preferably like ordinary shareholders, according to the angle considered.