The impact of the European neutrality rule on Romanian directors' duties in hostile takeovers - a case study of Romanian companies present on the Bucharest Stock Exchange

The purpose of this study is to critically analyse the evolution of the Romanian directors' duties under the reign of the neutrality rule instated by the European Directive 2004/25/EC on takeover bids. The issue of the takeover relevant directors' duties has not been specifically and critically addressed in Romania. We reach the conclusion that due to similarities between the American and Romanian directors' fiduciary duties and considering that the Romanian capital market is an area that is heading towards further development, the natural progression of the duties of directors of the companies present on the Bucharest Stock Exchange should follow the organic evolution of their American counterparts. This development is, however, artificially altered by the European neutrality rule. As shown above, the protection of Romanian minority shareholders is deficient under the European rule and the interests of Romanian companies and their shareholders may be affected by the application of the neutrality rule. Furthermore, the European Directive 2004/25/EC creates a disadvantage for European companies compared to their non-European equivalents, primarily in regard to U.S. companies. For these reasons we conclude that it is necessary de lege ferenda to diminish the application of the neutrality rule at least in Romania's case. This initiative should be accompanied by a reconsideration of Romanian directors' duties in hostile takeover through the lens of their American counterparts' position, the next stage in the evolution of the legal and economic field, as mentioned above. (C) 2015 The Authors. Published by Elsevier B.V.