주식의 포괄적 교환의 실무상 쟁점

The purpose of a comprehensive share exchange (a ʻʻShare Exchangeʼʼ) prescribed in the Commercial Code is to help facilitating fast and efficient establishment of a parent-wholly owned subsidiary relationship. However, efficient business restructuring is being hindered due to the fact that the Commercial code is silent on (i) how to treat treasury shares of the to-be wholly owned subsidiary (the ʻʻCompanyʼʼ), (ii) how to treat dissenting shareholdersʼ shares if the dissenting shareholders of the Company exercise their appraisal rights and fail to agree on the purchase price of their shares before the effective date of the share transfer, and (iii) how to treat equity-related bonds, such as convertible bonds or bonds with warrants, and stock options of the Company in the course of a Share Exchange. This paper reviews how to treat, in practice, the treasury shares, shares under appraisal rights and potential equity shares of the Company, as well as advantages and disadvantages of each method of treatment. In addition, this paper addresses the necessity of legislation in connection with treatment of the above shares in connection with a Share Exchange. Firstly, in practice, treasury shares of the Company have been treated in various manners in the course of a Share Exchange, including: (a) assigning exchange consideration to the treasury shares of the Company, (b) not assigning exchange consideration to the treasury shares of the Company, (c) retiring the treasury shares of the Company, and (d) selling the treasury shares of the Company to the to-be wholly owning company. However, each of the methods described above entails certain problem. In the case of (a) above, it is likely to result in cross shareholding, while it is unclear whether the method (b) is permitted under the current Commercial Code. The method (c) above could delay the process of the Share Exchange, whereas the method (d) may not be viable if the purchaser/wholly owning company’s ability to pay is questioned. Accordingly, the author argues that improvements to the current law in order to further the purpose of a Share Exchange are inevitable. Secondly, in the case where dissenting shareholders of the Company exercise their appraisal rights and fail to agree on the purchase price of their shares before the effective date of the share transfer, it is a rather common practice that the wholly owning companyʼs shares are allocated to the dissenting shareholders. However, the author argues that it serves no meaningful purpose to provide exchange consideration to such shareholders, and the above-mentioned practice only impedes efficient reorganization process. Therefore, the author suggests a reform to the Commercial Code with regard to the status of dissenting shareholders in the course of the Share Exchange. Lastly, since the Commercial Code is not clear on how to treat the equity-related bonds and stock options of the Company in the course of a Share Exchange, it is possible that a parent-wholly owned subsidiary relationship may involuntarily end following the Share Exchange due to the operation of the equity-related bonds or stock options of the Company. In such case, the parent company and the subsidiary may have to carry out redundant or inefficient process, such as redoing the entire share transfer process or going through a squeeze-out. As such, the author argues that additional legislation should be made to clarify how to treat the equity-related bonds and stock options in the course of a Share Exchange.