Proposed Amendment to Statutes: Removing the Fire Sale Clause in 1. FC Cologne’s Annual General Meeting

On Wednesday, 1. FC Cologne will meet for its annual general meeting. From 6 p.m., the members will deal with eight items on the agenda: In addition to the election of the electoral commission and the obligatory annual reports from the board, management and members’ council, amendments to the statutes will also be up for election again. For the first time, the association invited people to statutory forums in advance of the general meeting. Members were able to present their ideas for possible amendments there. Some of the ideas and suggestions expressed there were converted into amendments by the board and members’ council, which are now being voted on. But not all of the ideas put forward there resulted in an amendment proposed by the board and members’ council. This was also the idea of ​​long-time FC member Victor Robertz, who nevertheless decided to submit his application. We asked him for you what his application is all about.

Hello Victor, nice that you are taking time for us. Please introduce yourself to our readership:

Victor: First of all, thank you for giving me the opportunity to present the proposed amendment to the statutes. I am Victor Robertz, 30 years old and a native of Cologne and an FC fan for as long as I can remember. I saw my first game back in 2001 against BVB in the old Müngersdorf stadium. In 2005 I got my home season ticket in the east stand in block O7 of the then new Müngersdorf stadium. And since 2014 I have also been the proud owner of an away season ticket. In addition to being a fan at FC, I work as a lawyer in corporate law here in Cologne.

You have submitted a motion to amend the statutes, which members will vote on on Wednesday. What exactly is the content of your application?

Technically speaking, my application only contains the deletion of the so-called fire sale clause. Otherwise, the statutes remain unchanged.

What does that mean specifically?

To put it simply, according to our current statutes, the board can still sell up to 12.5 percent of the shares in the FC’s spun-off investment companies without having to first obtain the approval of the general meeting. The prerequisite for this is that there is an “economic emergency”, the members’ council agrees and the advisory board has been consulted beforehand. The amendment to the statutes that I put to the vote aims to make every sale of shares, starting from the first percent, subject to the approval requirement of the general meeting. Only when the general meeting, as the highest body of our association, is allowed to decide on the issue of selling shares can we really speak of a member-run association.

If we want to consistently follow the path of a member-run association, then we must and should place the decision about the sale of shares exclusively and without a back door in the hands of us members! -Victor Robertz

What exactly is an “economic emergency” then?

The statutes state that “immediate action by the board is necessary to avert imminent serious economic damage to the association and/or its associated companies.” The statutes do not provide a more detailed definition for this; the term “imminent serious economic damage” remains vague. Does this only mean averting the possible threat of insolvency of one of the investment companies? Or does the term “serious economic damage” start beforehand? The statutes are silent on this.

And with regard to the need for “immediate action by the board”, the statutes are currently not yet clear enough. The “clarification” that “immediate action is not necessary if a general meeting can take place in a timely manner, taking into account appropriate preparation time” only helps us to a limited extent here. What preparation time is appropriate? The preparation time usually required for calling our annual, regular general meeting? Or can one expect in such an exceptional situation (an economic emergency) that the calling of an extraordinary general meeting can be prepared in a shorter period of time?

All of these are significant uncertainties that I would like to avoid in such an existential question for our club as the sale of shares.

What is the main goal you want to achieve by deleting the clause?

The amendment to the statutes put to the vote on Wednesday allows us to put the decision-making authority over the sale of shares back into the hands of us members. Our president summed it up beautifully in his application video for the general meeting: “The FC is not just your club, it also belongs to you”! I can only agree with that, and I think that we should be consistent and put the ownership rights back in the hands of us members. The strongest and most important right of an owner is to decide for himself on the issue of selling shares. Our current statutes do not grant us this right – due to the emergency sale clause.

Your application has a striking unique selling point. You are submitting the only motion at this general meeting that is not submitted by the members’ council and/or the board. Can you imagine why that is?

Both the board and the members’ council often emphasize that the FC is a “member-run club” and that we can be proud of that. The board made the “member-run association” the focus of its candidacy in its last election. Likewise some of the incumbent member councils.

In recent years we have already taken several steps towards becoming a member-run association. If we want to consistently follow this path, then we should unconditionally place the issue of share sales in the hands of us members. As a truly member-run club, there is no reason not to do this. I am curious to see how the board and members’ council will respond on Wednesday to the proposed amendment to the statutes that I have submitted.

A prior consent requirement from us members can – per se – never represent an obstacle to a share sale. It only becomes an obstacle if we decide not to sell shares. – Victor Robertz

So it’s “just” a matter of asking the members beforehand as the sovereign of the association and thus involving them? Doesn’t that further paralyze the club in such a precarious situation?

No, it is extremely important to me to emphasize once again that our association remains absolutely capable of acting even after this change in the statutes. Calling an extraordinary general meeting requires less preparation time than such a comprehensive transaction would require. We were recently able to see how long such a transaction takes with the example of Hertha BSC.

It is always possible to obtain the approval of the general meeting before such a sale of shares. At the time when I go out for the first time to look for potential investors, it will still be possible to call and hold an extraordinary general meeting. It is only conceivable to complete such a transaction if I have already taken initial preparatory measures, for example by having initial, loose discussions with potential investors, without having to have any serious intentions to sell shares at that point before I can obtain the approval of the general meeting due to time constraints.

Our statutes represent the toolbox for an incumbent board of directors: If we give a future board of directors the opportunity to sell shares without our prior consent, then they will make use of the tool if in doubt.

We can decide on Wednesday not to give such a tool to a future board of directors. This would force an incumbent board of directors to involve us members in any planned share sale as soon as the first loose idea of ​​a share sale comes up. He would be forced to obtain prior approval at the first signs of possible liquidity shortages if he wanted to possibly compensate for this through a share sale.

A prior consent requirement from us members can – per se – never represent an obstacle to a share sale. It only becomes an obstacle if we decide not to sell shares.

Your proposal sounds like a continuation of the path taken by the current board…

Yes, because if we want to consistently follow the path of a member-run association, then we must and should place the decision about the sale of shares exclusively and without a back door in the hands of us members!

Thanks Victor. Finally, would you like to make a call to readers and the FC family?

Very gladly! Dear FC fans: Let’s show on Wednesday that we have a strong and committed membership. Let’s discuss this existential question together on Wednesday and consistently continue on the path we’ve already taken as a member-run association. I therefore ask you to come to the general meeting in large numbers on Wednesday and vote for the amendment I proposed!