CEE Legal Matters

Category: Austria

  • Schoenherr, K&L Gates, and Baker McKenzie Advise on Residential Property Sale in Vienna

    Schoenherr, K&L Gates, and Baker McKenzie Advise on Residential Property Sale in Vienna

    Schoenherr and K&L Gates have advised German property investor Art-Invest Real Estate on the acquisition of 390 apartments, in Vienna’s third district, from Premium Immobilien AG and ARE Austrian Real Estate Development GmbH, who were represented by Baker & McKenzie.

    The apartments will be part of “The Ensemble” residential development project, next to the Danube canal, which will consist of eight hundred apartments, 240 parking spaces, and 850 bicycle parking rack. Comprising an entire building block, the project will also include a 7,000 square meter public park. The completion of the project is expected in the first quarter of 2020.  

    Art-Invest is a real estate project development and investment company with headquarters in Cologne. The company invests in well-positioned office, retail, and hotel properties with value creation potential in major metropolitan locations in Germany and now Austria.

    The acquisition by Art-Invest was conducted on behalf of a residential investment fund for a German institutional investor. 

    The Schoenherr team advising Art-Invest included Partner Michael Lagler, Counsel Arabella Eichinger, and Attorneys Laurenz Schwitzer, Alexander Babinek, and Ayla Ilicali. 

    Baker & McKenzie’s team included Partner Stephan Gross and Associate Roman Jatzko. 

     

  • Machine Learning: Whom to Blame, Whom to Credit in Austria?

    As of April 2018, California will allow fully autonomous cars to be tested without safety drivers on public roads. One interesting question in this context is whom to blame for damages caused by artificial intelligence or machine learning systems? We took a look at this under Austrian law:

    The question of liability is complex when it comes to autonomous systems or systems with artificial intelligence. A central principle of the right to compensation, namely the fault of the party causing damage, is already questionable in the case of a driver whose self-driving car has caused an accident. In this case, the issue might be whether the driver could have intervened to prevent the accident. The fault of the manufacturer (for example in the person of the software programmer) will generally be technically difficult and expensive to verify.

    However, since the injured party usually does not have an agreement with the manufacturer, direct contractual liability will not be applicable. This leaves liability according to product liability acts (questionable whether also for software), liability based on contract with protective effects in favour of third parties, or tort liability. What is clear, however, is that only persons can by liable, not machines.

    For damages caused by self-driving cars, in contrast to other systems with artificial intelligence, the so-called “car owner’s liability” (Halterhaftung) might be a valid basis for a claim. This special liability is based on the mere fact that operating a car poses a risk to the general public and is not based on the principle of culpability. How this will ultimately affect the manufacturers, especially concerning claims for recourse by the car owner’s insurance company, cannot yet be seriously assessed.

    Another interesting aspect about self-learning system is the question, to whom the rights to the work products of “self-learning” systems belong. Why? Because only natural and legal persons can be owners of rights and duties, but not machines.

    Hence one always has to look at the person behind the system when attributing rights in creative endeavours or inventions. If certain work (including software code) created by an autonomously learning system would generally qualify for copyright or patent protection, under Austrian law it would have to initially be attributed to a natural person (ie a human being). Authors in the sense of the Austrian Copyright Act or inventors in the sense of the Austrian Patent Act must always be natural persons. Of course, such authors or inventors can grant third parties, which includes legal persons, rights to the to the protected work results.

    But what is the author’s or inventor’s position when a self-learning system autonomously produces work? One could take the position that a work created by a self-learning system is only a consequence of the creative or inventive efforts of the person who created the logic behind the self-learning system, and that therefore this person is also to be credited for the end result. On the other hand, it can be argued that rights must be attributed to the person who provided the impetus for creating the concrete work result – eg by entering certain data. Perhaps both persons are co-authors or joint-inventors. Or maybe nobody can assume rights to such work results, if their contribution to the end result was so small that a “creative” or “inventive” effort can hardly be seen, as the system developed the work result almost fully autonomously.

    By Wolfgang Tichy, Partner, Michael Woller, Partner, and Gunther Leissler, Counsel, Schoenherr

  • Dorda Advises Capvis on Acquisition of Majority Stake in Amann Girrbach-Group

    Dorda Advises Capvis on Acquisition of Majority Stake in Amann Girrbach-Group

    Dorda worked alongside lead counsel Latham & Watkins in advising Swiss private equity investor Capvis on its acquisition of a majority stake in the Amann Girrbach-Group. Baker McKenzie advised the seller, investment company TA Associates. Financial details were not disclosed, and closing remains subject to merger clearance.

    Headquartered in Koblach, Austria, the Amann Girrbach-Group markets integrated system solutions and products for manufacturing dental prosthetics.  

    Dorda’s team was led by Partners Martin Brodey and Christian Ritschka and included Partners Francine Brogyanyi, Tibor Varga, Veit Ohlberger, and Heinrich Kuhnert, Attorneys Christoph Hilkesberger, Bernhard Heinzl, and Klaus Pfeiffer, and Associates Lukas Schmidt, Florian Karall, Katharina Binder, Nadja Nalic, Alexandra Ciarnau, Suzan Safai, Florina Thenmayer, Gunther Posch, and Sonja Karpf.

    The Hamburg-based Latham & Watkins team was led by Partner Stefan Widder.

    The Baker McKenzie team was led by Partner Gerhard Hermann. 

     

  • The Buzz in Austria: Interview with Axel Anderl of Dorda

    The Buzz in Austria: Interview with Axel Anderl of Dorda

    “Right now in Austria, most of the activity revolves around the GDPR, because of its upcoming deadline,” reports Axel Anderl, Managing Partner and Head of IT/IP and Data Protection at Dorda.

    “The GDPR implementation is currently the most challenging thing for all Austrian lawyers, since all customers and clients are affected and have become particularly active in the last few months,” he says. “Even if you are not active in the IT or the data protection field, you get the feeling that this is really important. ”Anderl reports that it is quite difficult for clients to find trained professionals in the field, where only a limited number of experts are available. “There is an unbelievable high demand right now to help out companies with compliance issues, but many firms don’t really have the capacity to assist them,” he explains, adding that that this lack of expertise is slowing down implementation processes, which is especially problematic as companies have waited until the last minute to start their compliance processes. “I would say that only around 30% of the Austrian companies will meet the deadline, more or less. Most of the companies are still either in the process, with no chance to finish by the deadline —or they haven’t even started. So we have lots of work ahead of us on this territory.”

    Anderl reports that he has “some concerns regarding areas like labor law and employee protection, because further legislation and issues might pop up eventually within these fields.” According to him, “Austrian labor law does not provide specific data protection regulations, so now the question is if we need additional regulations on a national level or if the general provisions are sufficient.” With regard to the use of data for scientific purposes, the Austrian legislator just recently produced a draft for an adjustment to lower the requirements for consent in line with one of the opening clauses of the GDPR.

    Anderl adds that the European Banking Authority guidelines on Cloud Computing and the United States’ newly signed Cloud Act on access to data stored by US providers abroad are also keeping the business and legal markets busy. The new EBA guidelines, he says, are likely to particularly affect the banking and insurance fields. “It is practically a recommendation on a European level concerning cloud computing services and activities in the banking sector. Currently it is in the public debate phase, but the Austrian Authority declared in a directive that those provisions shall apply to future outsourcing activities in the regulated field which gives for the first time guidelines under what circumstances cloud computing is admissible.”

    The Cloud Act, which was drafted in the US just a few weeks ago, is designed to change data privacy and government surveillance laws; Anderl explains that the act is designed to “ensure that American authorities have unrestricted access to data of US providers, even if the data is processed and stored abroad.” According to him, “this is a huge issue now, and might have bindings with the GDPR, for it impacts data exchange and outsourcing, and might weaken privacy protection.”

    Ultimately, Anderl believes that the Austrian business market is doing well. “Our economy is stable. M&A business is rising again, foreign investors are finding a friendly environment here, which is another sign of a good economic situation. At the same time as a consequence insolvency went down, and also arbitration is not as active as it was the past couple of years.”

     

  • Flick Gocke Schaumburg and Binder Groesswang Advise on Acquisition of Pichler & Strobl

    Flick Gocke Schaumburg and Binder Groesswang Advise on Acquisition of Pichler & Strobl

    Flick Gocke Schaumburg and Binder Groesswang have advised VR Equitypartner GmbH and HOR Technologie GmbH on the acquisition of family-owned company Pichler & Strobl GmbH. The sellers were represented by Vavrovsky Heine Marth.

    Pichler & Strobl GmbH, founded approximately 15 years ago in Anthering near Salzburg, focuses on the manufacture and assembly of high-tech components in the fields of aerospace, medical technology, the semiconductor industry, car and motorcycle racing, and alternative energies.

    VR Equitypartner, which has its registered office in Frankfurt am Main, is one of the leading private equity financiers in Germany, Austria, and Switzerland. The company’s portfolio currently includes around 100 investments with an investment volume of EUR 500 million.

    VR Equitypartner acquired an interest in HOR in 2013. The recent investment will consolidate and strategically expand the position of HOR in the development and production of complete gear units and technically advanced individual components.

    The Flick Gocke Schaumburg team advising VR Equitypartner and HOR included Partner Martin Oltmanns, Associate Partner Christian Pitzal, and Associates Mathias Bulow and Matthias Thom. The Binder Groesswang team was led by Partner Andreas Hable, supported by Associates Christian Zwick, Clemens Willvonseder, Sabine Apfl-Trompeter, Hermann Beurle, and Mona Holzgruber.

    The Vavrovsky Heine Marth team advising the sellers was led by Partner Karl Ludwig Vavrovsky.

     

  • CMS Advises Hirmer Group on Travel Charme Hotels & Resorts Acquisition

    CMS Advises Hirmer Group on Travel Charme Hotels & Resorts Acquisition

    CMS has advised the Hirmer Group on its acquisition of Travel Charme Hotels & Resorts, a resort and holiday hotel chain in Germany and Austria, from Zurich-based Travel Charme Hotels & Resorts AG.

    The transaction involves the acquisition by the Hirmer Group of nine hotel operating companies on the Baltic Sea and in the Harz and Alpine regions, along with a service company located in Berlin which carries out central functions for all hotels belonging to Travel Charme Hotels & Resorts. The purchase price was not disclosed.

    The Munich-based Hirmer Group is a family-run corporate group operating in the textile retail and real estate sectors. According to CMS, the acquisition of the Travel Charme Hotels & Resorts is aimed at achieving synergy effects across the entire business, particularly in the area of real estate project development.

    The international CMS team was led by Leipzig-based Partner Jochen Lux and included Vienna-based Partner Gregor Famira.

    CMS did not reply to an inquiry about the deal. 

     

  • Insolvencies in Austria – The Glass is Half Full

    Reading newspapers in Austria these days one could get the impression that we are in the middle of a financial crisis. Each week another Austrian company seems to be in financial difficulties – or worse – filing for insolvency. But when taking a closer look at the individual insolvency proceedings, things are not as bleak as they seem.   

    The recent Austrian business headlines have been focusing on the insolvencies of the retailer Forstinger, the commercial laundry group Wozabal, the Styrian technology and construction company SFL and, last but not least, the low-cost airlines Air Berlin and Fly Niki. In addition to these insolvencies, news of the South African retailer Steinhoff’s accounting scandal is being feverishly covered by Austrian journalists. In its wake, Steinhoff’s Austrian subsidiaries suffered a liquidity crisis but luckily recovered and started a comprehensive restructuring process. 

    Forstinger had been experiencing financial difficulties since before 2017. As early as 2001 Forstinger was already subject to insolvency proceedings. Since then it has undergone several restructurings and changes in ownership. Forstinger is aiming for another restructuring, offering a 20% quota to its creditors. It remains to be seen whether the creditors will take Forstinger up on this offer. 

    In the case of commercial laundry group Wozabal not one, but six companies filed for insolvency. The proposed restructuring plans for all six companies failed which led the insolvency administrators to coordinate the sale of the businesses of all six companies. All the businesses were recently acquired by the competitor Salesianer and their commercial activities are continuing. Schoenherr advised Salesianer on the successful acquisition of most of the Wozabal businesses. 

    Fly Niki was put in insolvency after a take-over offer for Fly Niki by Lufthansa was revoked during the insolvency proceedings of parent company Air Berlin.  The European Commission rejected the take-over offer raising the issue of competition distortions. 

    Seeing how there would be no easy solution for the Air Berlin Austrian subsidiary, the insolvency proceedings for Fly Niki were opened in Germany. In the course of the German insolvency proceedings, Fly Niki’s assets were sold to IAG. Following a complaint by a Fly Niki creditor, a dispute over the COMI (centre of main interest) of Fly Niki – a company incorporated and having its registered seat in Austria – arose, and consequently, the competence of the German courts was brought into question. The German appellate court decided that, amongst others, due to Fly Niki’s corporate seat in Austria as well as the fact that Fly Niki had used an Austrian operational permit and that 80% of the employment contracts were subject to Austrian law, the COMI of Fly Niki was in Austria and therefore, Austrian courts were competent to lead the insolvency proceedings. Fly Niki appealed against the decision to the German Supreme Court. On January 12, 2018 the main insolvency proceedings were opened with regard to Fly Niki in Austria. In a new sales process, the assets of Fly Nike were finally sold to the previous owner of Fly Niki, Niki Lauda. 

    Despite the impression that there has been an increase of insolvencies in the last year, the number of insolvencies in Austria has actually fallen to a historic low. According to statistics published by Kreditschutzverband 1870 – Austria’s largest association for the protection of creditors – only 5,000 businesses filed for insolvency in 2017. This is the lowest number in 20 years. Also, the estimated amount of claims subject to insolvency proceedings fell by approximately 35% to EUR 1,9 billion. 

    This development is certainly due to Austria’s positive economic development and the continuing low interest rates. Rising interest rates may trigger a wave of insolvencies. In particular, real estate projects might suffer from an increase in interest rates given that they have not only benefited from the low costs of credits but also from historically high purchase prices. It remains to be seen what influence an interest rate-increase will have on business overall but, for now, things are not looking so badly in Austria – in spite of the negative headlines.

    By Miriam Simsa, Partner, Schoenherr

  • Hermann Schneeweiss Joins Eisenberger & Herzog

    Hermann Schneeweiss Joins Eisenberger & Herzog

    Eisenberger & Herzog has announced that Corporate/M&A lawyer Hermann Schneeweiss joined the firm as Partner on April 1, 2018.

    Before joining E&H, Schneeweiss worked as a consultant at the Boston Consulting Group, as a lawyer at Skadden, Arps, Slate, Meagher & Flom in New York, and most recently at Binder Groesswang in Vienna. He is admitted to the bar in Vienna, New York, England, and Wales.

    Schneeweiss studied law at the University of Vienna and Harvard University as a Fulbright Scholar.

     

  • Binder Groesswang Advises Verbund on Issuance of Green Bonded Loan

    Binder Groesswang Advises Verbund on Issuance of Green Bonded Loan

    Binder Groesswang has advised Austrian electricity provider Verbund AG, on the issuance of a green bonded loan. The transaction was arranged by German bank Helaba Landesbank Hessen-Thuringen, and with a term of ten years, Verbund AG expects a volume of EUR 100 million.

    According to Binder Groesswang, this is the first green digital bonded loan issuance in the world made via the fully-integrated VC Trade issuing platform, which uses “state-of-the-art technology to modernize all aspects of bond origination by condensing the issuing process, which until now has been highly fragmented and characterized by manual intervention.”

    The Binder Groesswang team included Partner Emanuel Welten and Associates Adrian Zuschmann and Markus Stelzl.

    CHSH did not reply to an inquiry about counsel for Helaba Landesbank Hessen-Thuringen.

     

  • Dorda Appoints New Management Committee

    Dorda Appoints New Management Committee

    Dorda has announced the appointment of a new three-person Management Committee, consisting of Partners Felix Horlsberger, who was re-elected after serving as a member in the preceding term, Martin Brodey who previously served as member from 2006 to 2014, and Axel Anderl, who was elected for the first time.

    According to Dorda, “the Management Committee is an important decision-making body of the firm in all questions of the firms’ strategic management and development.”

    Martin Brodey, who heads the M&A practice at Dorda, commented that: “I am delighted to be able to contribute again to the management and strategic development of the firm. We want to take DORDA successfully into its digital future and want to pursue a clear strategy in this respect.”

    Felix Horlsberger, who heads the Insurance practice and co-heads of the Data Protection team, added: “The digital transformation will be the core challenge for us and the whole legal business in the years to come. There is no way around this.”

    “Our management tasks will not keep us from remaining fully dedicated to servicing our clients and leading our teams,” said Axel Anderl, who leads Dorda’s IT, IP and Media practice and co-heads the Data Protection team with Horslberger. We will continue being close to our clients and their businesses in order to be able to improve our services based on our experience on the market continuously and to further increase our service level each and every day.”  

    The new Management Committee’s term commenced on March 1, 2018.