Category: Austria

Schoenherr has achieved an important victory on behalf of Vienna International Airport (VIE) and the province of Lower Austria in a case regarding the construction of a third runway at the airport.

Schoenherr Partner Christian Schmelz and his team succeeded in persuading the Austrian Constitutional Court to overturn the February 2017 decision of the Federal Administrative Court rejecting a permit application for the construction of the third runway. The Federal Administrative Court must now reach a new decision in this matter.

The permit application for the construction of the third runway at VIE was rejected by the Federal Administrative Court on the grounds of climate protection and land use. Acting on behalf of VIE, Schoenherr lodged a complaint with the Constitutional Court as well as an extraordinary appeal with the Higher Administrative Court.

On June 29, 2017, Constitutional Court President Gerhart Holzinger announced that the decision of the Federal Administrative Court was repealed in line with the points brought up by Schoenherr in its complaint. The Constitutional Court found that the rejection of the permit application for a third runway based on considerations of climate protection and land use was unconstitutional. Air Traffic Law does not provide any legal basis for such a decision, and neither do any of Austria’s commitments to international agreements or governmental decisions.

Additionally, the Constitutional Court agreed with Schoenherr that it is inadmissible to attribute to a specific airport the carbon emissions of an entire international flight (e.g., from Vienna to New York) rather than just the carbon emissions released during landing and take-off. The Constitutional Court also stated that both the Kyoto Protocol and the Austrian Climate Protection Law explicitly exclude air travel from their stipulations. Therefore, carbon emissions cannot be used as an argument against a third runway. The Constitutional Court held that it is the aircraft operators and not the airports that are responsible for climate protection during air transportation.

 “The decision of the Constitutional Court is significant in that it has far reaching consequences for many other projects beyond the scope of the third runway,” said Christian Schmelz. “It is also relevant to Austria as a business hub. The Constitutional Court has cleared the uncertainty left as a result of the decision reached by the Federal Administrative Court at the beginning of the year. The swift and clearly-worded verdict was thus highly welcome.”

The team working with Schmelz on behalf of the airport included Karasek Wietrzyk Rechtsanwalte Partner Bernhard Raschauer and Wolfgang Koeberl, Head of Legal of Vienna International Airport.   

Brandl & Talos has successfully defended RBB Klagenfurt against a claim for damages in the amount of EUR 400 million.

According to Brandl &Talos, “in the course of [an] investor’s scandal surrounding Wolfgang Auer-Welsbach and his criminal acts, RBB Klagenfurt was accused as the depositary bank of AvW customers [of being] responsible for a loss of around 400 million euros. A decision rendered by the Klagenfurt District Court in February 2010, in which an AvW investor was fully entitled to compensation, served as the basis for the damage claim. These proceedings serve as a model for all other pending processes.”

Brandl & Talos points out that a separate proceeding involving similar claims in March also resulted in a finding for the bank, making it “therefore extremely questionable whether investors will continue to negotiate hundreds of proceedings pending before this decision in view of the cost risk.” According to the firm, “RBB Klagenfurt sees its position considerably strengthened by the OGH decision.”

Brandl & Talos Partner Ernst Brandl was extremely pleased with the result, saying: “We are very optimistic that the decisions of the OGH in the two proceedings now mean the end of the disputes, which are — in our view — wrongly constituted claims.” Talos continued: “Fortunately, we have succeeded in convincing the courts of our legal positions. The verdict is an important signal for the pending court cases surrounding the AvW matter and a relief for all the depositary banks of the country. These are liable only in very limited circumstances for the quality of the papers deposited with them.”

Baker McKenzie has announced that Filip Boras has been appointed Partner in Vienna, with fellow arbitration specialist Stefan Riegler taking over the management of the Vienna office.

According to Baker McKenzie, “Stefan Riegler has been one of the persons responsible for the development of Baker McKenzie‘s arbitration law practice in Vienna for twelve years now …. [He] advises and represents companies in particular with regard to disputes before commercial arbitration courts in accordance with the most important arbitration rules, such as, above all, the Vienna Rules and the ICC Rules; he is, however, also a sought-after arbitrator.” The firm reports that he studied at the University of Vienna and at the London School of Economics, and in 2005 left Wolf Theiss to join Baker McKenzie, where he made Partner in 2009.

Also, according to Baker McKenzie, Filip Boras “owes his rapid success to a double specialization: Born Serb with Croatian and Bosnian roots, he speaks Serbian and Croatian fluently. Moreover, he is familiar with all important arbitration rules, such as those by the ICSID or the UNCITRAL. Over the past years, he advised numerous well-known clients on disputes relating to South-East Europe, where the demand for arbitration proceedings is extremely high at the moment. But Mr. Boras is also among Austria’s leading experts in the area of investment arbitration law. For example, he represents the Austrian investor Georg Gavrilovic and his well-known Croatian meat processing company against the Republic of Croatia. These were the first arbitration proceedings before the international arbitration institution ICSID in the history of the Republic of Croatia. With an amount in dispute of more than 200 million euros, the case has been among the most significant proceedings in the region.”

The firm reports that Boras studied in Vienna and Berkeley (in California), and says that “he has been admitted as an attorney not only in Vienna but also in New York.”

Riegler and Boras took up their positions upon commencement of the firm’s new fiscal year on July 1.

Willkie Farr & Gallagher and Binder Groesswang have advised Gantner Electronic Austria Holding GmbH on the acquisition of Syx Automations NV. Stibbe Brussels advised the seller.

Gantner is a high-tech company specializing in electronic access control, billing, and intelligent lock solutions. Syx Automations is, according to Binder Groesswang, “the market leader in the field of ticketing and leisure facility management solutions in the Benelux region.”

The deal was completed on June 16, 2017, and was facilitated with the support of Ardian (former AXA Private Equity), a leading independent investment company that has been the majority shareholder at Gantner since February 2016. The shares in Syx Automations were acquired from the Sofindev III fund, managed by Sofindev Management SA of Belgium, and the company’s own management. Under the leadership of CEO Dirk Syx, current management will remain at the helm while also taking a minority stake in the new group. The parties agreed not to disclose any further details of the transaction.

According to Binder Groesswang, “the strategic and transformational merger of Gantner and Syx Automations creates a globally operating integrated provider of comprehensive access, billing, and management systems for sport facilities, leisure centers, and visitor attractions. The tie-up will enable both companies to tap wide-ranging synergies and to realize their potential for further international growth. Customers will be offered holistic solutions consisting of a wide range of solutions integrated into a uniform software management system. In fiscal 2017, the two companies are expecting aggregate sales revenues of some EUR 50 million.

The Willkie Farr team was led by Partner Maximilian Schwab and included Partners Mario Schmidt, Didier Willermain, Jean-Quentin De Cuyper, and Jan Wilms.

The Binder Groesswang team consisted of Lead Partner Thomas Schirmer and included Partner Christia Wimpissinger, Attorneys at Law Hermann Schneeweiss and Clemens Willvonseder, and Associate Cordelia Klauhs.

Brandl & Talos has advised Ring International Holding AG on the sale of its proOffice Group, to the Hamelin Group, a manufacturer of paper and office products based in Caen, France. Brandl & Talos was supported by Willkie Farr & Gallagher on questions of French and German law, while the Hamelin Group was represented by the Gordon S. Blair law firm.

According to Brandl & Talos, “the proOffice group is a leading manufacturer of white-label soft-plastic solutions for office equipment and generates approximately EUR 40 million in 2016. The sale was preceded by a restructure within the Group.” In addition, the firm reports, “the Hamelin Group has a turnover of around EUR 500 million and operates 15 production sites in 9 countries with approximately 2,200 employees.”

The Brandl & Talos team was led by Partner Roman Rericha and included Markus Arzt, Georg Gutfleisch and Christiane Feichter 

The Gordon S. Blair firm’s team was led by David De Pariente.

BPV Hugel has advised Immofinanz AG in review proceedings of the exchange ratio to be applied in its 2010 merger with Immoeast AG.

Under Austria’s Stock Corporation Act, the exchange ratio of a merger can be challenged and reviewed in court proceedings even after the execution of the merger. The review proceedings, which started already 2010, have now been settled.

According to bpv Huegel, “the settlement provides for compensation to the group of former Immoeast shareholders through distribution of additional Immofinanz shares at a ratio of 0.088 Immofinanz share per former Immoeast share. Approximately 340.7 million Immoeast shares were entitled to participate in the settlement. In total approximately 30 million shares have been distributed out of treasury shares and as new shares from a share capital increase (authorized share capital). The compensation with shares has been applied the first time in review proceedings in Austria.”

BPV Hugel reports that it advised on the merger in 2010, represented Immofinanz in the review proceedings, and “now conducted the settlement negotiations and structured the settlement terms and its execution along with comprehensive advise on corporate law and capital markets law aspects, in particular on the compensation by shares first time applied in the market.”

“We are delighted to advise Immofinanz on this settlement and the compensation by additional shares, first time applied in the market, which also underlines the leading position of our firm representing listed companies in review proceedings of exchange ratios and squeeze-out compensations,” commented Partner Christoph Nauer, who led his firm’s team on the matter. Nauer was assisted by Partner Hanns Hugel, Attorneys Daniel Reiter, Walter Loukota, Kornelia Wittmann, and Dominik Geyer, and Associates Andreas Krist and Roland Juill.

When asked about the Buzz in Austria, Thomas Kulnigg, Partner at Schoenherr, says that M&A activity has significantly increased, with 2016 being one of the top 10 years in deal volume since 1988, and he says that 2017 is “well on its way.” What Kulnigg is currently excited about, beside the typical Corporate/M&A work, is the start-up work his team is doing.

Kulnigg begins by pointing to a recently-passed law in Austria making it easier to establish limited liability companies (GmbH) with only one shareholder – the founder – who also acts as sole managing director. The law, which is scheduled to come into effect at the beginning of 2018, allows such companies to complete the registration/creation process online, meaning that, other than a visit to a bank to check your ID, “everything can be done from your desk.”

Kulnigg notes that the new law is hardly a game-changer – “because of its limitations, I don’t think this is a big shot” he says, explaining that the law applies only to entities with one shareholder and may thus be not relevant for foundations by several founders, which is the majority of start-up foundations – but he describes it as “a step in the right direction.” At the moment, he says, companies have to go “both to the notary public and the banks, taking time and money,” so a simplified process will be useful.

Besides, Kulnigg reports, that law is hardly the extent of Austria’s commitment to start-ups. “The Austrian government has planned to provide additional funding of up to EUR 185 million to start-ups,” he reports”. “Austria generally provides a lot of different forms of funding to start-ups,” he says, and while he concedes that also other countries in the region provide some form of grants to start-ups, he describes the significant funding available to start up a company in the country as “an Austrian peculiarity.” Kulnigg adds that there is a lot going on this the scene, citing as a prime example a new accelerator expected to work with 100 such companies per year beginning in the fall of this year.

Moving outside the start-up world, Kulnigg describes that his practice is still busy with classic M&A work such as wind-down transactions for the Austrian Bad Banks. Kulnigg is advising them now for several years in and outside of Austria. It is “great working for them as the deals are interesting as well challenging.” Kulnigg is happy to be able to help them fulfilling their wind-down objectives. “They are doing actually great,” Kulnigg adds.

In terms of other recent legal developments, Kulnigg adds that Austria recently announced plans to make it easier for joint stock companies to give shares to employees as additional remuneration. A draft bill, which Schoenherr was able to comment before it was published, was recently published enabling employers to grant shares up to EUR 4.500 to employees per year on a tax-free basis.

In general, Kulnigg says, lawyers on his Start-up team are staying busy. He reports that his group is “getting a larger and larger footprint, working with some of the biggest venture capitalists in Austria, for which we have inter alia developed an incentive program that is based on equity participation rights. We are rolling that out in their entire portfolio.” In addition, he says, “our corporate and M&A group is very busy. We’re doing great at the moment.”

Wolf Theiss has provided advice to IHR Labor, a recently-merged network of medical laboratories, on legal questions involving IP, data protection, employment law, corporate law, tenancy law, and the drafting of contracts. 

IHR Labor has several locations throughout Vienna, including a new location in the Lugner City shopping center. Together, according to Wolf Theiss, “the group comprises the largest and most modern business of its kind in eastern Austria and is among the leading diagnostic laboratory groups in the country.”

The new location promises easy accessibility with all modes of transportation and has a disabled-accessible entrance, according to Wolf Theiss Senior Associate Anja Greiner, who advised the group on all legal matters surrounding its combination and creation — which became necessary, she said, as a result of new provisions in structural reform within the health care sector.

Brandl & Talos has provided assistance to the new venture capital fund capital300, financed by private funds, with the setup and FMA registration process.

Capital300 is managed by Roman Scharf (the co-founder of Jajah and Talenthouse) and Peter Lasinger (ex-aws Grunderfonds). The Brandl & Talos team was led by Partner Roman Rericha and included lawyers Markus Arzt  and Kerstin Liebl.