Category: Czech Republic

  • KSB Advises Corinthia Group on Corintiha Prague Hotel Lease

    Kocian Solc Balastik has advised the Corinthia Group on the long-term lease for the Corinthia Prague hotel with a company from the Czech Inn Holding group. FMK Florian Michalek Kvasnicka reportedly advised the counterparty.

    The Corinthia Group is an international investment and development group operating luxury hotels and resorts in Europe and Africa.

    The Czech Inn Holding group operates a hotel chain with more than 20 hotels in the Czech Republic and abroad.

    According to KSB, “with 539 rooms, the Corinthia Prague building is one of the leading hotels in the Czech Republic and one of the largest properties in Prague.”

    Back in 2019, KSB advised the Corinthia Group on the sale of its Panorama Hotel Prague and adjoining land and property to Austrian developer S+B Gruppe (as reported by CEE Legal Matters on September 27, 2019).

    The KSB team included Partners Jiri Hornik and Vaclav Rovensky and Lawyers Michal Hanus and Yelizaveta Volodina.

  • Top 5 Insolvency Judgments in 2023

    In this article, we’ll cover a selection of the TOP 5 Czech insolvency case law from last year.

    • APPLICATION OF A CLAIM FROM AN INCOMPLETE PROMISSORY NOTE

    – Decision of the Supreme Court Case No. 29 ICdo 23/2021 of 28 August 2023

    A creditor can make a claim in bankruptcy proceedings based on an incomplete promissory note that the debtor has signed as a guarantor, but has not filled in the other details. Such a claim must be submitted as a conditional claim, where the condition is met by adding the missing elements. The incomplete promissory note then turns into a complete promissory note with retroactive effect.

    • SALE OUTSIDE THE AUCTION – Supreme Court Decision Case No. 29 ICdo 50/2021 of 27 April 2023

    The three-month time limit to annul a contract of sale is a substantive time limit. To comply with the time limit, the action must reach the insolvency court on the last day of the time limit at the latest, and it is not sufficient if the action is brought (within the time limit) before a court which has no subject-matter jurisdiction.

    • THE OBLIGATION OF PROOF FOR THE RELEASE FROM PAYMENT OF CLAIMS – Supreme Court Decision Case No. 29 Cdo 3075/2022 of 30 March 2023

    A defendant, or a debtor who was released from paying claims after the insolvency proceedings ended, has to show and confirm that a debtor’s release from paying claims under Section 414 of the Insolvency Act applies to the defendant’s claim as well. Unless the law says otherwise, the party to the dispute who gains from the existence of a certain fact has to prove it. This decision is quite important, since in practice the release is often taken into account ex officio.

    • RELEASE OF THE DEBTOR FROM THE PAYMENT OF CLAIMS IN THE INSOLVENCY PROCEEDINGS – Supreme Court Decision No. 29 NSČR 20/2021 of 27 April 2023

    For the debtor to obtain release from the payment of the rest of the debts in the insolvency proceedings, they must not only properly fulfill some of the obligations set out in Section 412(1) and (3) of the Insolvency Act, but they must fulfill all of these obligations, the fulfillment of some of which cannot delay the breach of others. At the same time, however, it must be taken into account that the effect of the breach on the course of the insolvency proceedings or the assets, since if the breach is insignificant in this respect, it cannot in itself constitute grounds for rejecting the debtor’s application for a payment of claims release. 

    • THE OBLIGATION TO HAND OVER THE DWELLING TO THE INSOLVENCY ADMINISTRATOR FOR MONETISATION

    Decision of the Supreme Court Case No. 29 NSČR 44/2021 of 31 July 2023 

    If the conditions are met for a dwelling to be handed over to the insolvency administrator for monetisation, it is not possible for the insolvency court to instead order the debtor to only pay the difference between the value of the dwelling and the value of the so-called protected housing. If the debtor has a cooperative flat or a share in a housing cooperative, they may not have to hand it over to the insolvency administrator for sale. However, this only applies if the share gives them the right to live in the cooperative flat which is debtor’s dwelling.

    By Tomas Jelinek, Senior Associate, and Jan Cermak, Junior Associate, Eversheds Sutherland

     

  • JSK Advises Genesis Capital on Acquisition of Minority Stake in Kasper Kovo

    JSK has advised Genesis Capital Equity’s GPEF IV fund on its acquisition of a minority stake in Kasper Kovo. Sole practitioner Michal Hruska reportedly advised the seller.

    Kasper Kovo is an engineering company specializing in the production of metal components for industrial and technological applications. It employs 400 people.

    The Genesis Private Equity Fund IV is a private equity fund of Genesis Capital that offers financing for growth and development to small and medium-sized companies in Central Europe.

    “It is our intention together with Mr. Kasper to build a strong professional management team to execute the strategy for new products and markets,” Genesis Capital Partner Martin Vilis commented. “This acquisition reflects the Genesis fund’s long-term investment thesis of supporting regional leaders in their industry.”

    The JSK team included Partner Tomas Dolezil, Senior Associate Daniel Pospisil, and Junior Lawyer Filip Vraspir.

  • Robert Matas Joins BPV Braun Partners

    Former Matas & Partners Founding Partner Robert Matas has joined BPV Braun Partners as a Partner in the Czech Republic.

    Specializing in disputes before both Czech and German courts, Matas’ areas of expertise include corporate and commercial law and unfair competition law. He had established his eponymous firm back in 2002. He began his legal career at Roedl & Partner.

    “Robert is a successful lawyer with many years of experience. His experience, especially in German law, will be a great asset to our international law firm,” BPV Braun Partners Managing Partner Arthur Braun commented. “I look forward to working with my new colleague and I am convinced that he will achieve many successes that will contribute to even greater client satisfaction.”

  • Kinstellar and Kutejova Marsal Briasky Advise on Genesis Capital Acquisition of Schulte Group

    Kinstellar has advised the Genesis Private Equity Fund IV on its acquisition of the Schulte Group from Radovan Soldat and Jan Bula. Kutejova Marsal Briasky advised the sellers.

    The transaction remains contingent on regulatory approval.

    The Schulte Group operates in the heating and cooling installations sector.

    The Kinstellar team included Partners Jan Juroska and Tomas Cihula, Managing Associate Michal Kniz, Associate Denisa Simanska, Junior Associates Simona Semanova and Paul Valka, and Research Assistant Jakub Rubas.

    The Kutejova Marsal Briasky team included Partners Jan Marsal and Ludmila Kutejova, Attorneys at Law Jana Immerova, Veronika Cermakova, and Lukas Jelinek, and Junior Associate Martin Mikulka.

  • PRK Partners Advises Euro Manganese on Funding from Orion Resource Partners

    PRK Partners, working with Norton Rose Fulbright, has advised Euro Manganese on receiving funding from Orion Resource Partners for the development and construction of a manganese mining project in the Czech Republic.

    Euro Manganese, listed on the Canadian and Australian stock exchanges, is an investor in the Czech Republic, operating the Mangan Chvaletice subsidiary, which holds exploration rights to manganese tailings in North-east Bohemia and is developing a manganese extraction project.

    Orion Resource Partners is an investment group.

    The PRK Partners team included Partner Daniel Rosicky, Associate Partner Tomas Bures, and Senior Associate Lucie Vorlova.

    PRK Partners did not respond to our inquiry on the matter.

  • NKA Helps EPEI Obtain Merger Control Clearance for Casino Group Acquisition

    Nedelka Kubac Advokati has helped EPEI in obtaining merger control clearance for its acquisition of the French Casino retail group.

    EPEI is an investment company active in various business areas including food wholesale in the cash & carry format and retail.

    Casino is a French operator of food retail stores.

    The NKA team included Partner Radovan Kubac, Counsel Richard Maliniak, and Senior Associate Ondrej Cizek.

  • BBH Advises Roier on Acquisition of Nafirmy

    BBH has advised the Roier investment crowdfunding start-up on its acquisition of Nafirmy.

    Nafirmy is a Prague-based platform specializing in peer-to-peer investment and loan brokerage for small and medium enterprises.

    Back in 2023, BBH advised Roier on obtaining its crowdfunding license (as reported by CEE Legal Matters on November 10, 2023).

    The BBH team was led by Partner Zdenek Hustak.

    BBH did not respond to our inquiry on the matter.

  • Czech Republic: The Consolidation Package and its impact on Labour Law and HR

    As of 1 January 2024, a significant portion of the Consolidation Package (Act No. 349/2023 Coll.) came into effect. However, certain modifications introduced by the Consolidation Package in the field of labour law have not yet been fully implemented in practice, while some other notable changes will take effect from 1 July 2024. In our article, we outline key changes and highlight areas for which there are further legislative revisions in the pipeline.

    Payroll costs on agreements to complete a job

    The Consolidation Package includes major changes to agreements to complete a job (in Czech: dohoda o provedení práce). These changes will become effective from 1 July 2024. Stricter conditions will apply for the exemption of remuneration from social security contributions and health insurance premiums. In addition to the right to annual leave, which is granted to employees working under an agreement to complete a job from 1 January 2024, and the right to certain additional payments (e.g. for work on bank holidays, on weekends or during night hours), both introduced by the major amendment to the Labour Code, this is another change that may significantly increase employer’s costs related to the work of an employee that is working under an agreement to complete a job.

    The current rule, under which a monthly remuneration below a fixed limit of CZK 10,000 is exempt from social security contributions, will be replaced by a new system. This will be based on two new limits calculated as a percentage of the national average wage and the number of employers an employee works for. The new limits will be as follows:

    • A limit of 25% of the national average wage, which is CZK 10,500 per month (in 2024), will apply to agreements made with a single employer.
    • A limit of 40% of the national average wage, which is CZK 17,500 per month (in 2024), will apply if agreements are made with multiple employers.

    If one of the limits is exceeded, both the employee and the employer will be liable to pay social security contributions and health insurance premiums from the entire remuneration. The limit of 25% of the national average wage will also be relevant for the deduction of personal income tax. If remuneration does not exceed the limit, employers can, under certain conditions, deduct (final) withholding tax instead of regular payroll income tax advances.

    The new system also requires administrative changes, which include the introduction of a central register of all agreements to complete a job and employers’ obligation of notification and monthly reporting, which includes the amount of remuneration. Furthermore, the employer will have an obligation of notification vis-à-vis the employee regarding a potential obligation to pay social security contributions in cases of agreements to complete a job with multiple employers, no later than on the day of the commencement of the employment. On the other hand, the employee must inform the employer of agreements to complete a job made with other employers. Employees who do not fulfil this obligation may be required by the competent authorities to pay the social security contributions themselves.

    Expert debates raised issues in relation to the second cumulative limit. Employers may learn about their obligation to pay social security contributions and health insurance premiums with a delay – retrospectively. Also, the Consolidation Package has not introduced all appropriate changes to the health insurance legislation. Therefore, further legislative changes are expected, in order to remedy the situation. A new system with two limits applying to individual agreements is considered, whereby a higher limit of 25% of the national average wage (CZK 10,500 in 2024) would apply to one agreement, which is notified to the social security authorities, and a lower limit of CZK 4,000 would apply to any other agreements.

    Employee benefits in light of the new guideline of the General Financial Directorate

    Given that the changes to the taxation of employee benefits, introduced by the Consolidation Package as of 1 January 2024, are significant and there is interpretational uncertainty of how to apply the new rules, the General Financial Directorate has issued a guideline that seeks to clarify the approach of the tax administration when interpreting the new provisions.

    The main change consists of the introduction of an overall limit for the tax exemption of employee benefits (other than meals), which is calculated as one half of the national average wage – the overall limit is CZK 21,983.50 for 2024. Under the previous rules, separate limits applied only to certain benefits, such as accommodation (monthly limit of CZK 3,500) and recreation and trips (annual limit of CZK 20,000). Under the new rules, employers will need to determine the value of individual benefits and calculate the cumulative amount provided to employees during the year. Once the limit is exceeded, the exceeding value of the benefits will become taxable.

    The guideline defines the term “employee benefit” (where the limit applies) and distinguishes it from situations, where costs are incurred by the employer with the aim to support efficient job performance by the employees and where the employer’s interest is dominant. It discusses, for example, whether the limit applies to snacks or drinks provided free of charge by the employer to employees at the workplace, or to sports equipment intended to be used by employees to relax during their work.

    Although the legislator declared the intention to simplify the taxation of employee benefits, the rules are still complex and employers should carefully categorise employee benefits and other performances provided to an employee for the purposes of corporate income tax, payroll income tax and social security contributions and health insurance premiums, in order to choose the most tax and cost-efficient ones. Further legislative changes are expected to provide more legal certainty.

    Workshop regarding the practical impacts & what is to come

    Given the breadth of these topics and the legal changes which are expected, we are planning an employment law workshop that will take place on 6 March 2024. At this workshop, we will discuss the new obligations of employers in relation to employees working under an agreement to complete a job and other practical implications of the amendment to the Labour Code and the Consolidation Package, as well as other legislative changes that are in the pipeline.

    By Ondrej Benes and Kamila Seberova, Counsels, and Dita Sulcova, Consultant, Wolf Theiss

  • AK Evan Advises Penta Hospitals on Acquisition of Hospitals in Vimperk and Volyne

    AK Evan has advised Penta Hospitals on its acquisition of the hospitals in Vimperk and Volyne from BH – Medical.

    According to the Evan law firm, “the hospitals are non-state healthcare facilities focusing mainly on aftercare, rehabilitation, and the provision of social services to clients. The hospitals are primarily intended for patients whose acute phase of illness has passed and who need subsequent comprehensive nursing, rehabilitation, and psychosocial care. Additionally, the hospital in Vimperk can provide outpatient services in fields such as surgery, orthopedics, or internal medicine.”

    The AK Evan team included Partner Jan Evan, Senior Lawyer Petr Schmier, and Junior Associates Tereza Lapackova and Jan Vasta.