Category: Czech Republic

Lenka Droscova has become a Partner at Act Randa Havel Legal. She focuses on labor law and is also a member of the State Bar of California.

According to the firm, Droscova specializes in labor contracts, internal regulation, occupational health and safety regulation, collective bargaining agreements, the transfer of rights and obligations arising from labor relations, agency employment, and the employment of managers as well as immigration law, the secondment of Czech employees abroad, and the assignment of foreigners into the Czech Republic.

Droscova earned a master’s degree in Law from the Palacky University in Olomouc, in 2010.

“I am delighted that Lenka has decided to continue with her professional career in our firm,” Managing Partner Martin Randa said. “She is an excellent lawyer and thanks to her experience and working enthusiasm Lenka is a great asset to the firm and its clients.”

BPV Braun Partners has advised Immofinanz on the sale of the Airport Business Centre in Prague to the Jet Investment Fund.

The transaction closed on December 21, 2021. Financial details were not disclosed. 

The Airport Business Centre is located at Vaclav Havel Airport Prague and offers approximately 14,500 square meters of office and retail space. 

Immofinanz is a commercial real estate group whose activities are focused on the retail and office segments in seven markets in Europe, including Austria, Germany, Poland, the Czech Republic, Slovakia, Hungary, and Romania.

BPV Braun Partners’ team included Partners Miroslav Dudek and Gabriela Spak Porupkova. 

The firm did not reply to our inquiry on the deal.

Allen & Overy has advised Komercni Banka on leading a club of banks in providing an up to EUR 26 million loan facility for the decrease of the share capital and general corporate and investment needs of rubber manufacturer Rubena, a member of the Kaprain investment group.

Rubena is a Czech company producing rubber products for domestic and foreign markets.

Allen & Overy’s team included Counsel Petra Mysakova and Associates Pavel Prihoda and Barbara Midova.

PRK Partners has advised Vermont on the development of an Alzheimer’s centre facility and its transfer to Penta Hospitals.

According to PRK Partners, the facility has a capacity of 450 beds and was built between 2017 and 2018. In November and December 2021, Vermont negotiated with the current tenant Alzheimercentrum, from the Creditas Group, about the transfer of facility control to Penta Hospitals.

Penta Hospitals is a provider of health and social services in the Czech Republic.

PRK Partners’ team included Partners Jakub Lichnovsky and Monika Maskova, Attorney Robert Reiss, and Associate Tomas Janosko.

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

A cola drink bought in the Czech Republic should be the same as one bought in Germany, right? Well from May 2021, this is required by an amendment to the Food Act which has codified a ban on dual quality food into the Czech legal system.

A brief excursion through the history of the amendment

Discussions concerning the dual quality of food began at European level in 2011, when the Slovak Consumer Association carried out laboratory tests on selected types of food purchased in various EU Member States. The results were rather unfavourable in terms of food quality in the new Member States from Central and Eastern Europe. Subsequently, these countries began to make accusations before the European institutions that their citizens were “second-class consumers”, that the east had become the “dustbin of Europe” and so on. In 2019, the European Union responded by amending the Unfair Commercial Practices Directive with a compromise solution to the issue of the ban on dual quality food, which contained rather vaguely worded exceptions. The subsequent Czech amendment to the Food Act is in many ways stricter than the EU Directive and introduces a so-called hard ban on dual quality food.

Wording of the ban

The amendment prohibits the placing of food on the Czech market that is apparently identical to food placed on other EU markets, although the food placed on the Czech market has a substantially different composition or properties. The exceptions are cases where there are legitimate and objective reasons for this and where the food is also accompanied by easily accessible and sufficient information on this different composition or properties. Simply put, it is prohibited to place food on the Czech market that has the same packaging as food from other EU Member States but different composition or properties.

How compliance with the ban will be monitored

Inspections will be carried out by the State Agricultural and Food Inspection Authority. It will take the following steps:

• Does it concern a foodstuff of an identical brand and name and of an identical or seemingly identical appearance?

The information and dominant features of the packaging in the main field of vision will be evaluated from the perspective of the average consumer’s perception.

• Are there significant differences in composition or properties?

Significant differences are differences in the ingredients in the food (e.g. cream vs. vegetable fat, sunflower vs. palm oil, sugar vs. sweetener, natural flavouring vs. synthetic flavouring), differences in the proportion of one of the primary ingredients (e.g. proportion of meat/fish in the products, cocoa content in a chocolate product, nut content in chocolate) or differences in the properties (e.g. different weight, obvious differences in sensory properties).

• Can objective factors be taken into account to explain the differences found?

In some cases, there may be legitimate and objective reasons for differences in the composition of food between Member States. For example, differences due to reformulation, or voluntary strategies aimed at improving access to healthy and nutritious foods (e.g. reduced salt content in baked goods, potato chips, reduced sugar in soft drinks or jams), due to a requirement of national legislation (e.g. a ban on the addition of vitamins and minerals to certain categories of food) or due to the availability/seasonality of raw materials (e.g. different sensory properties of yoghurt due to the use of local milk with a higher fat content). In no case will it be accepted as an argument for a different product formulation that the manufacturer has adapted the product composition to consumer demand for a lower price in a given Member State.

• Is the consumer sufficiently informed about these differences?

For differences due to legitimate and objective factors to be taken into account, the consumer must be sufficiently informed. The information must be readily accessible and sufficiently understandable to the average consumer, depending on the method of sale (information on the food packaging will typically be considered readily accessible).

Penalty for violation of the prohibition

A fine of up to CZK 50m (approx. EUR 2m) can be imposed for violating the ban on dual quality of food. The fine can be imposed not only on the producer of the food, but also on any food business operator who places the food on the market, i.e. any level in the commercial chain, including importers, distributors and final sellers.

By Monika Voldanova, Attorney at Law, Schoenherr

Former Counsel Tomas Sequens has been promoted to Partner at Kocian Solc Balastik.

According to KSB, Sequens “has been an attorney-at-law since 2003 and focuses primarily on energy, mining and minerals, and environmental law.”

Sequens has been with KSB since 1999. He holds a PhD in law from Charles University in Prague.

“Tomas is well placed to become a partner at KSB thanks to his professional and personal character, as well as his long and successful tenure at our law firm, which has significantly contributed to building KSB’s reputation,” Managing Partner Petr Kasik said. “We look forward to working with him in his new role and wish him and KSB every success.”

On October 7, 2021, CEE Legal Matters reported that Kocian Solc Balastik had advised Czech technology accelerator AI Startup Incubator on its investment in US-Bangladeshi OpenRefactory. CEE In-House Matters spoke with Angelo Burgarello, Business Development Director at AI Startup Incubator, to learn more about the investment.

CEELM: Tell us a bit about the AI Startup Incubator.

Burgarello: AI Startup Incubator is an AI-focused Incubator based in Prague, Czech Republic) founded in 2017 as a joint stock company. While we define ourselves as an “Incubator” we act more like a hands-on investor in early-stage AI startups. Our approach to the incubation/acceleration of startups and mentoring is direct and tailored to the startups’ real needs. If a company needs help with business development we select and onboard a hands-on mentor who will take care of this. We provide consultancy and direction on the AI features implementation thanks to our team of AI experts. A team is built to help out the startup with a clear set of goals “milestones plan” which the team together with the founders need to achieve. We have a highly dedicated team of individuals ranging from AI Ph.D. experts, mentors, and successful entrepreneurs, passionate innovators, coaches, educators, and academics. 

We mainly work at a European level but we also look beyond the EU, supporting Start-up ecosystems with the means to tackle their needs from an early stage of maturity from early to growth stage. Our goal is to support and fund small organizations/individuals (start-ups) in accessing finance and/or increasing their traction, growth in revenues, and size, among others. We do collaborate only with startups we invest a ticket in. We are industry and geographically agnostic but laser-focused on AI technology. We are able to invest tickets directly that span from EUR 50,000 to EUR 250,000 and syndicate with our investors’ partners to reach ticket size up to EUR 1 million. 

CEELM: What was the rationale behind the investment into OpenRefactory and what made the target particularly attractive to you?

Burgarello: Currently, most software developers have to spend hours searching and evaluating bugs in code. This process leads to ineffectively used time and large extra costs. We see a future in services such as OpenRefactory, due to the fact their team brings a solution that supports software developers, letting them focus on the fun parts of coding instead of looking for bugs that can be instantaneously fixed.

CEELM: What are the next steps?

Burgarello: We are currently working with the team on a new communication strategy to better and clearly address the values for the clients. On top of this efforts are exerted in order to penetrate the EU market.

CEELM: What were the most complex aspects of the deal?

Burgarello: This was a direct equity investment and AISI acted as a lead investor. Being a lead investor is always a more difficult position because the terms and conditions must be set up not only to match the current investment entities but make sure that there are no obstacles for future investors to join the venture. Finding the right balance is a very important matter.

CEELM: And why did you opt for KSB as your legal counsel on the deal?

Burgarello: KSB is definitely one of the best law firms on the Prague scene. With our primary point of contact, Ota Mach, we are able to quickly identify the must and nice to have features of the investment agreements and move on negotiations and agreement of the terms in a quick and efficient manner. It is never a matter of having the perfect agreement but the perfect agreement for the specific case. This is why we tailor the contract taking into account the level of risk and maturity in every investment we make.

Originally reported by CEE In-House Matters.

Havel & Partners has advised Seall on its sale to Rubix. Noerr advised Rubix on the deal.

Seall, founded in 1991, is a supplier of hydraulic and pneumatic solutions and services. Headquartered in Chomutov, the business operates from five locations in the Czech Republic with 65 employees.

Rubix is an industrial distributor and a portfolio company of Advent International. With a turnover of EUR 2.4 billion in 2020, Rubix is Europe’s largest supplier of industrial maintenance, repair, and overhaul products and services, according to Noerr.

“We are delighted to welcome the team at Seall as well as its customers and suppliers to the Rubix family,” commented Rubix CEO Central and Eastern Europe Pinaki Banerjee. “This is an exciting development for our business in the Czech Republic, which confirms our commitment to the Czech market and marks our return to acquisitions in the country.”

The Havel & Partners team included Partner Jan Koval and Senior Associate Veronika Filipova.

Noerr’s team was led by Local Partner Barbara Kusak and Senior Associate Lucia Luptakova and included Associates Barbora Safarikova and David Nemecek and Legal Advisor Pavel Hrdy.

Havel & Partners’ Veronika Dvorakova and Ivan Rames have become Equity Partners, while Lenka Stikova Gachova, Michal Smrcek, and Josef Zaloudek have been promoted to Partner.

Dvorakova is the Marketing Director of Havel & Partners. According to the firm, “in addition to marketing, communications and business support for the group, she is also responsible for the firm’s pro bono and CSR policy and manages the Havel & Partners Academy. She also advises major clients on strategic marketing, PR, and public affairs.” According to Havel & Partners, “before joining the law firm, Veronika worked as head of the press department and spokesperson at the Ministry of Justice and the Government Legislative Council as well as senior director of the justice minister’s cabinet.”

Rames has 15 years of experience. According to Havel & Partners, “Starting as a student in [the] firm, he has worked his way up to Equity Partner. He is particularly an expert in intellectual property and technology law. He focuses on comprehensive IP strategy set-ups in the Czech Republic, Slovakia, and abroad. He also specializes in e-commerce, advising start-ups, larger companies, and international corporations. The clients he advises in IP matters further include investors, investment funds, and venture capital start-ups. As an Equity Partner, Ivan will be responsible for the further development of the business unit focusing on new technologies.” Rames has been with Havel & Partners since 2007.

Former Counsel Stikova Gachova is described by Havel & Partners as a top expert in competition law, including state aid, and significant market power. “She assists clients in competition compliance and represents them before the Czech Office for the Protection of Competition and the Antimonopoly Office of the Slovak Republic, as well as before courts in all areas of competition law. Before joining our law firm, she worked at the Office for the Protection of Competition for eight years.” Stikova Gachova has a master’s degree in Law from Masaryk University’s Faculty of Law in Brno.

Smrcek, according to Havel & Partners, “focuses on comprehensive advisory services in the field of regulation and private law aspects of insurance, pension companies, insurance intermediaries, leasing companies, representation of clients before courts, as well as investigations and compliance.” Before joining the firm, Smrcek spent almost five years with Allianz and almost two years with Heresova a Ruzicka. “He also served in the legislative section of the Czech Association of Insurance Companies and was chair of the Corporate Governance Committee.”

Zaloudek specializes in corporate tax law, international taxation, restructuring, and related aspects of civil and commercial law. According to Havel & Partners, “he has many years of experience in advising major international and local companies operating in IT, the automotive industry, engineering, the food industry, and other fields. Before joining [the] firm, he worked at the Ministry of Finance.”

“2021 saw the firm celebrating its twentieth anniversary and the most successful year in its history, as we further strengthened our position as the leader of the Czech-Slovak legal market,” said Managing Partner Jaroslav Havel. “At the top level of the firm’s management, Veronika and Ivan, key members of our team, have been making a significant long-term contribution to the firm’s success, and will now be even more intensely involved in the firm’s management as equity partners.”

While real estate in the country is still going strong, according to BPV Braun Partners Partner Miroslav Dudek, bankruptcy disputes and the financial problems of tenants from industries hit by COVID-19 restrictions are on the rise in the Czech Republic.

Dudek says that the overall political atmosphere has calmed down recently. “The new government appointed by the president is about to start its activities, accordingly, we are curious about what to expect,” he begins. “In particular, one of the pressing issues is the huge increase of public debt. At the moment, we are wondering whether the government will stick to its promise to not raise taxes and which measures they will use for taming the public debt.”

“One of the major legislative updates in the real estate sector would be a new Construction Act, changing the structure of the building authorities and implementing some additional tools, the purpose of which is to streamline the permitting process,” he says. In addition, Dudek highlights the legislative changes in the energy sector and the first effects of the Green Deal.

According to Dudek, there is an increased amount of money pumped back into the economy. “Investment funds, as well as private investors, have been trying to invest their money into real estate projects, as it is not convenient to simply leave money in their bank accounts,” he notes.

From an economic perspective, Dudek points out that real estate has been one of the most active areas for the law firm. “We have been quite busy recently, as there are several transactions to be finalized by the end of this year or early in January. For instance, one of our clients is considering extending its shops in the Czech Republic and intends to acquire the plots for development. Even though the number of transactions has decreased recently, we still have a significant amount of work, considering the pandemic situation.”

“In the past year, we have seen a rise in the number of bankruptcy matters and disputes,” he adds. “Many companies and landlords in the travel, hospitality, and food sector went bankrupt, with disastrous sector-wide effects. This is mainly the result of a devastating decrease in tourists in the city of Prague,” he notes. However, Dudek also points out that many landlords and tenants tend to compromise, even when the conditions are unfavorable to them. “They tend to invest in their relationships, lasting over the years and offering concessions and discounts, as well as adjustments in payment calendars, in particular as the state is willing to pay additional support. In that regard, parties are taking into account the extraordinary situation caused as a result of the pandemic,” he concludes.