Facts
The Swiss Sewing Machine Factory Helvetia AG with a share capital of CHF 270,000, divided into 270 bearer shares of CHF 1,000 each, was based in Lucerne. Shareholder Kreis owned 105 shares, while the remaining 165 shares belonged to the Chairman of the Board of Directors Harder and his wife. The general meeting of 17 July 1958 resolved to write off the entire share capital of CHF 270,000 to eliminate an accumulated deficit of CHF 257,000 and immediately increase it again to CHF 270,000 by issuing 270 new bearer shares of CHF 1,000 each. Kreis did not consent to these resolutions and did not participate in the new subscription. Harder then took over all 270 new shares. Kreis filed a lawsuit seeking to declare the general meeting resolution null and void or to have it judicially annulled. The District Court of Lucerne annulled the resolution, as the complete write-off of the share capital had abolished the claimant's membership rights without his consent. The Lucerne High Court modified the judgment, annulling the resolution only to the extent that it resulted in the loss of membership rights and other vested rights for the previous shareholders. Kreis then appealed to the Federal Supreme Court.Considerations
3. The Federal Supreme Court considers the complete write-off of the share capital for the purpose of restructuring to be permissible. Article 622(4) of the Swiss Code of Obligations allows the public limited company to reduce the par value of the shares for the purpose of restructuring below the legal minimum of CHF 100, without the law providing for a lower limit. Such a measure does not violate the shareholders' vested rights or the principle of equal treatment. 4. The Federal Supreme Court confirms the findings of the lower instance that there had been a significant accumulated deficit and that the write-off of the share capital and the raising of new capital were objectively justified. The write-off may not go beyond what is necessary for the restructuring, but in the present case it is…