Category: Czech Republic

Borivoj Libal has become the sole Managing Partner of Eversheds Sutherland’s Czech Republic office. Libal has been a Co-Managing Partner at the firm, alongside Bernhard Hager, since 2022.

Libal specializes in corporate and M&A. Before joining Eversheds Sutherland in 2022 (as reported by CEE Legal Matters on September 5, 2022), he spent three and a half years as Noerr’s Prague office Co-Head (as reported by CEE Legal Matters on March 6, 2019). Earlier still, he was the Managing Partner at PwC Legal Czech Republic between 2015 and 2018. Libal also worked at Havel, Holasek & Partners as Counsel between 2011 and 2015. He was a Lawyer at CMS from 2009 to 2011 and at Norton Rose from 2006 to 2008.

“I very much appreciate the trust of the other Partners and all my colleagues,” Libal said. “Our common goal is to maintain the excellence of the legal services we provide and to continue strengthening not only our core areas such as M&A, real estate, employment, litigation, and banking & finance but also in areas such as technology and cybersecurity.”

According to Eversheds Sutherland, Bernhard Hager will remain in charge in Slovakia. In the Czech Republic, he will focus mainly on energy, environment, and ESG.

Kocian Solc Balastik has advised J&T Bank on the financing aspects of a joint venture between the CPI Property Group and Best Hotel Properties, which purchased a 50% stake in a EUR 347 million portfolio of eight hotel properties.

Best Hotel Properties manages, administers, and invests in hotels.

The CPI Property Group is an owner of income-generating real estate in Central and Eastern Europe.

J&T Banka has been offering services and consultancy since 1998, including multigenerational asset and succession management, investment advisory, securities trading, asset administration, and structuring.

According to KSB, “CPIPG has successfully sold a 50% stake in a subsidiary holding the portfolio, totaling approximately EUR 173 million, putting a total value on the portfolio of EUR 347 million.”

The KSB team included Partner Martin Krejci, Counsel Ivo Prusa, and Associate Tomas Travnicek.

Kocian Solc Balastik has advised SMV Invest Group on an issue of perpetual certificates in the Czech Republic.

SMV Invest Group is a real estate company.

According to KSB, “perpetual certificates are primarily debt securities but have some features of equity securities.”

The KSB team included Partner Vlastimil Pihera and Lawyer Josef Kriz.

KSB did not respond to our inquiry on the matter.

The new European data regulation introduces new rules for the use of information from smart devices. These rules define rights to access and use data created in the EU across all economic sectors and across smart devices from different manufacturers.

What will the new regulation mean for consumers and businesses?

The possibility of accessing data and using it comes up against various legal or economic restrictions, most importantly data holders’ reluctance to share their data with someone else. Consequently, the stronger position of those holding more data in the market is often abused.

In practice, the regulation aims to prevent this with measures that should have the following effect:

• Prices for after-sales services and repairs of smart devices will be lower. For example, if your smartwatch breaks, you can now request that any service outside of the manufacturer gain access to the data.
• There will be new opportunities to use services that rely on access to data. If you have devices from different manufacturers, you can now get advice from one company collecting data from different devices. Until now, each device’s data was locked by its manufacturer. The ordinary user will therefore also get a better overview of their data.
• Better access for smaller businesses to data collected by devices.

The goal of the regulation is therefore to remove obstacles to the functioning of the internal data market, to ensure a fair distribution of value from data between individual entities on the market, and to support the so-called secondary data market for their further resale and use. With exceptions, the data regulation will be effective from September 2025.

By Marek Poloni, Associate, Eversheds Sutherland

Dentons has advised the CPI Property Group on its EUR 500 million issuance of Regulation S 7.0% green bonds due 2029.

The green bonds were issued under CPI’s recently updated euro medium-term note program and are listed on the regulated market of Euronext Dublin.

According to Dentons, “the green bonds received a very positive response from the market as more than EUR 3 billion in orders were placed, meaning the order book was six times oversubscribed, which is the strongest-ever response to a bond issue by CPI. CPI intends to allocate an amount equivalent to the net proceeds of the bonds to fully retire the bridge loans related to the acquisitions of Immofinanz and S Immo.”

The CPI Property Group is an owner of income-generating real estate in Central and Eastern Europe.

The Dentons team was led by London-based Partner Nick Hayday.

We bring you a brief overview of important legislative news from the Czech Republic that should not escape your attention.

On the limitation of the scope of the statutory pre-emption right under Section 3056 of the Civil Code (CZ)

The legal right of pre-emption of the owner of the building to the land under it does not arise for the entire land on which the building is located, but only for that part of the land that is necessary for the exercise of the ownership right to the building. The division of the land must not significantly complicate the use or enjoyment of the divided land.

Repayment of debt by a third party without the debtor’s consent

A third party can repay the debt to the creditor even without the debtor’s consent, unless the debtor expressly agrees with the creditor to prohibit the repayment of the debt by a third party (NS File 28 Cdo 1214/2023).

Planned Register of Representatives

The Chamber of Deputies passed an act on so-called central records of digital powers of attorney for negotiations with the state administration. It will be a database of granted representative authorisations, in which the authorities will verify the existence and validity of the relevant power of attorney themselves. There will thus be no need to submit a paper power of attorney. Ideally, the system should be operational from July this year.

Dishonest intent in debt relief (trust fund)

A debtor who, in a relatively short period of time before filing an insolvency petition in conjunction with a request for debt relief, handled its real estate in such a way that it was not subject to enforcement by the creditor (by putting it in a trust fund), is not acting honestly, and there is reason to “assume” on this basis that the debtor is pursuing a dishonest intention by submitting a debt relief application.

News in AML legislation

On 6 March 2024, the Senate approved yet another amendment to the AML Act. In addition to increasing the upper limits of some fines and expanding the range of obliged persons, it also establishes the possibility for obliged persons not to screen the client if this could frustrate or endanger the investigation of a suspicious transaction (so-called “tipping-off” or warning). In such a case, the obliged person must immediately report the suspicious transaction to the Financial Analytical Office.

Senate approves a bill on non-performing loan market law in early March

The new law transposes the EU directive and is supposed to strengthen the crisis resistance of the European Banking Union. According to the law, a non-performing loan is a loan, credit or similar financial service (e.g. operational leasing) provided by a bank or other similar credit institution, if (i) the borrower is unlikely to repay its obligations in full or (ii) any of the obligations is more than 90 days past due. Newly, only persons from a legally defined circle and based on the permission of the Czech National Bank will be able to manage the non-performing loans defined above. In addition, the law lays down the rules on how each administrator of non-performing loans must be managed and governed. The market for receivables from non-performing loans and the rules for dealing with debtors will also be regulated.

By Dominika Vesela and Petra Konecna, Partners, Tomas Jelínek, Senior Associate, Ondrej Sudoma and Petr Kucera, Associates, and Jakub Bystron, Trainee, Eversheds Sutherland

Kinstellar has advised S Immo AG on its acquisition of a EUR 463 million property portfolio in the Czech Republic from the CPI Property Group.

The portfolio includes two office buildings, two shopping centers, a mixed-use property, and a single-tenant retail building. The property value of the transaction is EUR 463 million with an annual rental income value of around EUR 28.3 million and, according to Kinstellar, was a strategic acquisition for S Immo, “enhancing their footprint in the Czech real estate market.”

S Immo AG is a real estate investment company based in Vienna. According to S Immo’s website, the CPI Property Group holds 88.37% of the share capital of S Immo AG, directly and indirectly.

The CPI Property Group is an owner of income-generating European real estate. It focuses on the Czech Republic, Berlin, Warsaw, and the CEE region and has approximately EUR 21 billion in assets.

Six months prior, Kinstellar also advised S Immo on the acquisition of a different property portfolio in the Czech Republic, valued at EUR 481 million, from the CPI Property Group (as reported by CEE Legal Matters on November 30, 2023).

The Kinstellar team was led by Partner Klara Stepankova and Managing Associate Martin Holub and included Managing Associate Adam Nemec, Senior Associates Jakub Stastny and Radka Justova, Associate Artom Gnedin, and Junior Associates Dominik Sevcu, Dominik Ctvrtnicek, Zuzana Mihalikova, Zuzana Konecna, Vojtech Tomasek, and Paul Valka.

Glatzova & Co has advised manager, administrator, and listing agent J&T Banka and arranger J&T IB and Capital Markets on Natland Investment Fund SICAV’s CZK 600 million senior bond issuance.

Natland is an investment and financial group that focuses on investment opportunities in the segment of medium-sized companies and real estate projects in the Czech and Slovak markets. It also provides special forms of financing for medium-sized enterprises and investors in the SME segment.

According to Glatzova & Co, “the bonds will be listed on the Prague Stock Exchange. The Czech National Bank approved the prospectus on May 7, 2024, and its approval became effective on May 8, 2024.”

The Glatzova & Co team included Partner Libor Nemec and Junor Associate Jan Losenicky.

Glatzova & Co did not respond to our inquiry on the matter.

The new legislation regarding agreements to complete a job has not even come into effect yet, and the Chamber of Deputies has already introduced further updates.

Initially, two thresholds were supposed to apply from 1 July 2024 for establishing employee participation in sickness insurance when working based on an agreement to complete a job. The basic qualifying amount was set to 25% of the average wage. If an employee worked under agreements to complete a job with multiple employers, the insurance participation limit was to total 40% of the average wage. 

However, in April, the Chamber of Deputies approved an amendment that scrapped these two thresholds. The amendment introduces two regimes, namely “notified” and “non-notified” agreements. 

An employee will be allowed to have one agreement to complete a job, which will be a so-called “notified agreement”. For this, the contribution threshold will be 25% of the average wage. For non-notified agreements, the obligation to participate in the employee’s insurance should apply as soon as the remuneration exceeds the limit for small-scale employment (currently CZK 4,000).

The employer will inform the Czech Social Security Administration (CSSA) about the intention to apply the notified agreement regime. If several employers submit the notification within a given month, the more favourable contribution regime will apply to the agreement that was notified first.

Unless any surprises occur in the remainder of the legislative process, the new contribution rules for agreements to complete a job will come into force on 1 January 2025. However, not all new obligations are postponed.

The obligation to report all employees under an agreement to complete a job to the CSSA remains unchanged and will apply from 1 July 2024.

By Lenka Droscova, Partner, Act Legal

The amendment to the Code of Administrative Justice, slated to take effect on 1 January 2025, will bring many changes.

The main ones include the following:

1. Persons for whom a data box is set up without a request will be required to make submissions to the court electronically. In addition, paper and electronic forms of submission will be “equalised”. Thus, where a court formerly would not consider a non-supplemented electronic submission at all, the court will now have to first invite the participant to correct the deficiency.
2. The rights of the parties to the proceedings will be strengthened. In particular, the powers of administrative and civil courts deciding according to part five of the Code of Civil Procedure will be better demarcated. Furthermore, the possibility to review estate regulations issued by professional chambers has been added. The range of persons who will be able to propose such a review will also be expanded. The decision-making of the Supreme Administrative Court is strengthened in favour of the appeal, which will speed up proceedings and prevents the game of ping-pong between the Supreme Administrative Court and the regional courts.
3. There are conceptual changes in the cassation appeal procedure. The complainant must now be mandatorily represented already at the stage of drafting the complaint, which is expected to increase the quality of the submission. The possibility of being represented by other persons providing specialised advice (tax advisor, notary, etc.) is also regulated. Unlike legal representation, which must continue to be carried out by a lawyer as a natural person, these other permissible representatives can also be legal entities. However, the new regulation clarifies the requirement that, in such a case, only a natural person who performs this specialised consultancy should act as a legal entity.

By Anastasija Levina, Junior Associate, Eversheds Sutherland