The common practice on IPOs of granting over-allotment or "Greenshoe" options to banks, entitling them to acquire additional shares (usually 10-15% of the original issue), was declared invalid by the High Court of Appeals of Berlin. Until the Federal Supreme Court decides on the appeal, there is substantial uncertainty as to the validity of using a Greenshoe option.

Source: Judgment of the High Court of Appeals of Berlin of 22nd August, 2001 (in German), case no. 23 U 6712/99, ZIP (Zeitschrift für Wirtschaftsrecht) 2001, 2178. Lovells Boesebeck Droste email: [email protected]