Category: Czech Republic

Dvorak Hager & Partners has represented Algotech in the purchase of a 100% ownership interest in SugarFactory s.r.o., a company operating in the field of customer related management solutions. The sellers were represented by the Rohrich law firm.

Algotech is a multinational European corporation that provides telecommunication solutions in the institutional and corporate sphere.

The Dvorak Hager & Partners team was led by Partner Lukas Zahradka and included Attorney Dominika Vesela.

Kinstellar has advised Canada’s Canopy Growth Corporation, a diversified cannabis and hemp company, on the acquisition of Czech medical cannabis company Annabis Medical. The total value of the transaction is more than two million Canadian dollars.

Annabis Medical currently imports and distributes cannabis products pursuant to federal Czech licenses through pharmacy channels across the Czech Republic. 

The Kinstellar team was led by Partner Jan Juroska, and further included Counsel Tomas Cihula Senior Associate Michal Kniz, and Junior Associate Kristyna Del Maschio.

Kinstellar did not reply to our inquiries concerning counsel for Annabis Medical.

“The Czech business market seems to be affected by a series of changes in the legal sector that are expected in the near future,” reports Zdenek Tomicek, Partner at CEE Attorneys in Prague. First, he says, the legal system is now preparing to provide for joint legal actions. In addition, a new amendment to the country’s Insolvency Act is creating waves on the market.

“Joint legal actions are common in many European countries, but so far they have not   been incorporated into the Czech legal system,” Tomicek explains. “The government has recently approved a proposal for a new act that will make these joint legal actions part of our system,” he adds, saying that the act contemplates criminal proceedings as well. “Although we don’t have the legislation ready yet, some cases have already started in criminal proceedings. Our firm has also filed a joint criminal report against a company, Telefonni Seznam Ceske Republiky a Slovenska s.r.o., for alleged fraud in case of unfair business treatment. Initially we started the case on the behalf of four clients, but since the end of March, other companies have been joining the proceedings on an almost daily basis.”

Tomicek claims that the circumstances of the case are unique. “We will see what will happen, because several companies submitted similar claims before, but the police said that they don’t consider unfair business treatment of the said company as fraud and dismissed the charges. But whereas previously there could be only one claim, now there can be 15 and more, so authorities should take them more seriously due to social harmfulness, one of the main aspect of the criminal proceedings to be taken into account by the police.” He reports that he and Iveta Koubkova, the Head of Criminal Desk at CEE Attorneys, are still waiting for the first confirmation from the police and the state prosecutor.

Turning to the new amendment to the country’s Insolvency Act, Tomicek says that it was proposed by the Ministry of Justice to settle the debts of the Czech residents. “The amendment generated huge debates in the Czech legal and business markets, for it basically says that if a physical person is not capable of paying his or her debts, he or she should not be held responsible for paying them back. According to the Ministry of Justice, we have 863,000 people who are under enforcement proceedings. This represents almost ten percent of the population, so it is quite a good reason to introduce the amendment, but from a business perspective, for many companies, this amendment may cause serious problems.”

Ultimately, Tomicek says, courts will decide on the matter. “Probably a lot of people will try to take advantage of the act, and courts will be overloaded,” he says. He also thinks that the act could affect negatively investors, including foreign companies, who provide significant customer loans and other B2C services, and now may find themselves unable to demand repayment.

In general terms, Tomicek says things are going well. “This is indeed a busy period for us,” he says. But there’s pressure on the industry as well, he says. “We have to keep up with many things at once, and we are also dealing with a serious shortage of law professionals. The economy is in good shape, and law firms are very busy, but it is really hard to find good lawyers. Now if we want to hire a new associate, it can take up to few months to find someone.” The reason of this shortage, he believes, is changing demands from new law school graduates. “Young people are not looking just for big salaries anymore. They also want to feel comfortable in their offices, so we have to change not only our internal regulations, but the office environments as well. We have to support them in feeling good, so they are motivated to stay.”  

Clifford Chance has advised CPI Property Group on its acquisition of the Futurum Hradec Kralove shopping center from Meyer Bergman, a privately held real estate investment management firm. Meyer Bergman was represented by Tomsa & Spol.

The transaction was approved by the Czech Competition Office on March 23, 2018.

CPI Property Group (CPI) is a Luxembourg-based real estate group concentrating on long-term investments, predominantly in Central Europe and Germany. 

CPI is one of the largest owners of retail properties in the region, with more than twenty shopping centers located in the Czech Republic, Poland, Hungary, and Romania. The group has an asset value of approximately EUR 7.5 billion. The majority shareholding in CPI is held by Radovan Vitek, a private individual residing in Switzerland.

Located in the central Czech town of Hradec Kralove, the Futurum shopping center opened in 2000 and offers visitors 110 stores anchored by a Tesco hypermarket over a total floor area of 35,000 square meters. Reconstructed and modernized in 2011-2012, the mall also houses a multiplex cinema. 

According to Clifford Chance, “the acquisition highlights the continuing flow of Czech capital into commercial real estate, for since the beginning of this year, the ownership of at least eight office and business centers has changed hands, with the buyers, with only one exception, being from the Czech Republic.”

The Clifford Chance team advising on the transaction was led by Real Estate Partner Emil Holub with Senior Associate Aneta Sosnovcova. The team also included Junior Associates Klara Hrdlickova and Matej Kucera.

The Tomsa & Spol team included Partner Robert Zugar and Senior Associate Petr Fryc. 

Randa Havel Legal has represented the owners of Astratex in the sale of the majority of their stake in the company to the Hartenberg Holding investment group, which is owned by Czech Prime Minister Andrej Babis. Hartenberg Holding was advised by Mikulas & Partners. The transaction value was not disclosed. 

Astratex is an on-line seller of lingerie products in the Czech Republic, Slovakia, Poland, Romania, Hungary, Bulgaria, and Austria.

Astratex investors include Tomas Fikar and Roman Oravec, entrepreneurs in the area of e-commerce and online marketing, as well as Jan Svoboda, a partner in the Programia company, which supplies companies with e-shops. Petr Vit, Astratex’s founder, retains more than a quarter share in the company, while the former owners of the company remain active as minority shareholders.

The Randa Havel Legal team was led by Partner Alois Satava and included Senior Associate Michal Palinkas. 

The Mikulas & Partners team included Partner Jan Mikulas and Senior Associate Eliska Piklova.

Dunovska & Partners has advised Serge Grimaux, a promoter of the Rolling Stones concert in Prague, on securing financing for the concert organization costs, as well as negotiating and executing contractual documentation with financing partner Bestsport, a member of PPF Group, and with Rolling Stones management and other contractual partners and service providers.

The Rolling Stones concert at Letnany Airport in Prague will be held on July 4, 2018.

Dunovska & Partners did not reply to an inquiry about the deal.

BPV Braun Partners has advised Immofinanz on the sale of the Brno Business Park office buildings via a share deal to the Infond investment fund. The transaction closed on March 9, 2018.

Brno Business Park includes four buildings and 35,000 square meters of office space, located in the Brno administrative center.

The BPV Braun Partners team consisted of Managing Associate Miroslav Dudek and Senior Associate Pavlina Tejralova.

A consortium of Kocian Solc Balastik, PwC Legal Germany, PwC Legal Czech Republic, and Heuking Kuhn Luer Wojtek has won a tender to advise the European Global Navigation Satellite Systems Agency on public procurement law, competition law, and contract management issues.

The European Global Navigation Satellite Systems Agency (GSA), in Prague, is an agency founded by the European Union to implement the GALILEO and EGNOS satellite programs. GALILEO is a satellite navigation system that will be completed in orbit by 2020 and which will provide improved positioning and timing information with significant positive implications for a number of European services and users. EGNOS is Europe’s regional satellite-based augmentation system, used to improve the performance of global navigation satellite systems, such as GPS and Galileo.

In 2017, GSA tendered comprehensive legal advice services, in particular regarding public procurement law, competition law, and contract management. Several international law firms and consortia participated in the tender.

In January 2018, the KSB/PwC/Heuking consortium was awarded the contract for Lots 1 and 2.

The consortium’s team is led by Kocian Solc Balastik Partner Jiri Hornik, PwC Legal Czech Republic Partner Borivoj Libal and Senior Associate Milan Fric, PwC Legal Germany lawyers Jan-Peter Ohrtmann and Marc-Oliver Brock, and Heuking Kuhn Luer Partner Michael Schmittmann.