Category: Estonia

Hedman Partners reports that Silicon Vikings, a network connecting start-up entrepreneurs and investors between Silicon Valley and the Nordics, has established a chapter in Tallinn.

Silicon Vikings was established 15 years ago with the goal of increasing awareness of the technology potential in the Nordic region amongst the entrepreneurs and investors in Silicon Valley. Silicon Vikings hosts regular meetings, social gatherings and educational seminars across the US and Europe, actively engaging start-up ventures in Denmark, Sweden, Finland, Iceland, Norway and now also in Estonia. The company focuses solely on Nordic start-ups. “We believe that people from Nordic countries share a similar business culture and mindset,” said Silicon Vikings’ CEO Ingrid Echter. “This focus allows us to ensure assistance and contacts that are actually relevant to them in Silicon Valley.”

According to a Hedman Partners press release, “Silicon Vikings’ launch event in Tallinn featured presentations about their success stories in Silicon Valleys by several tech entrepreneurs with an Estonian connection – Steve Jurvetson, Sten Tamkivi, Rain Rannu and others. The event was organized jointly by the Estonian Development Fund, Enterprise Estonia and law firm Hedman Partners.”

Hedman Partners’ Managing Partner Merlin Salvik explains the purpose of the network: “We aim to continue bringing remarkable speakers to Estonia to give  local entrepreneurs the opportunity to directly interact with the “creme de la creme” of the tech world and help them take further steps towards their success by providing relevant information about the opportunities and activities in Silicon Valley.”

The Estonian office of Glimstedt has appealed a victory by the Estonian government in the Tallinn Administrative Court involving a challenge to Estonian “fair compensation” regulations for artists.

In this matter, Glimstedt is representing three “collective societies” of authors, performers, and producers, who claim that Estonian regulations regarding the levies applied on traditional blank media have failed to keep pace with modern technologies, and thus violate EU Directive 2001/29 and Estonian national laws providing for “fair compensation.”

A Glimstedt press release explains that: “In Estonia such compensation has been provided mostly as levies on traditional blank media – audio and video cassettes, CDs and DVDs. However, remuneration limited to these media could be considered as fair only in the beginning of last decade. Today most of copyrighted material is copied to and by absolutely different digital media and devices – USB and memory cards, mobile phones with MP3, hard discs, set top boxes, etc. all of which clearly make it possible to make private copies. As a result, levies have been applied to these carriers and devices in many European countries. Therefore, the existing legal regulation in Estonia is completely out of date. This lack of fair compensation violates legal rights and legitimate interests of authors, performers and producers, undermines creative industries and reduces their economic input to national and European economy, and ruins these countries’ cultural heritage.”

Glimstedt’s clients filed the initial action against the Estonian government in the Tallinn Administrative Court in the beginning of 2013. The court of first instance rendered its decision for the government in June 2014. Glimstedt has announced its plans to appeal that decision. Partner Priit Latt claims that the judgment “is a dangerous precedent which in case of entering into force will reduce the protection of copyright holders against arbitrary actions taken by the government.”

The Estonian Hedman Partners law firm has provided general advice to Wise Guys Investments, an investment firm operating the technology start-up accelerator Startup Wise Guys.

According to Hedman Partners, Wise Guys “was founded 2.5 years ago by Estonian private investors with a focus on investing in start-up companies with high potential in the technology sector. Wise Guys Investments has launched an accelerator program for discovering appropriate investment opportunities, the program’s three cycles have thus far yielded investments into 24 companies in 15 countries around the world.”

Maris Prii, Executive Director of Wise Guys Investments, explained the general nature of the company’s mandate to their law firm: “It is Hedman Partners’ role to verify and confirm the compliance of all follow-up agreements involving the companies in our portfolio.”

Sorainen Estonia has advised and represented a real estate investment fund managed by Vicus Capital Advisors in the sale of a newly developed single tenant shopping center in Tartu, the second biggest city in Estonia. 

Vicus Limited is a real estate development and investment company founded in May 2005. Vicus invests in real estate in Russia, Ukraine and the Baltic States.  The company is owned by a group of extremely financially solid Finnish investors.  The shareholders have committed to invest 75 million euros in the company. The rest of the investments will be financed with bank loans. Vicus’s investment capacity including the bank financing is 300–400 million euros. Vicus co-operates on a case-by-case basis in planning, developing and constructing its real estate projects with development, construction project management and engineering companies with local expertise.

Vicus Capital Advisors is a real estate development and investment company founded in May 2005. Vicus invests in real estate in Russia, Ukraine, and the Baltic States.

The company is owned by a group of Finnish investors. The shareholders have committed to invest 75 million euros in the company. The rest of the investments are financed with bank loans. Vicus’s investment capacity including the bank financing is 300–400 million euros.

In addition to transaction support Sorainen managed the LDD process and the sale was executed under an expedited schedule.

Lextal  has announced its successful representation of defendant Einar Vettus in a long lasting and closely followed Estonian criminal prosecution.

According to Lextal, the case — which the firm describes as the “longest lasting judicial process in Estonia” — was finally decided with a 203-page ruling by the Estonian Supreme Court on June 30, 2014. 

Vettus was the only of the seven individuals and 2 entities prosecuted in the criminal matter to be “discharged from criminal responsibility” by the Supreme Court. Although initially acquitted by the Harju County Court, that ruling was annulled by the Tallinn Circuit Court, and then reversed again by the Supreme Court.

Lextal’s representation of Vettus in the matter began in 2006. Vettus was represented throughout by Lextal Partner Ullar Talviste, assisted by attorney Oliver Naas.

Tark Grunte Sutkiene has advised BOLE OU in a sale of a share to an unidentified new investor.

BOLE, based on Estonian capital, is rapidly growing company headquartered in Paldiski, Estonia. It manufactures naturally curved hardwood floors.

Tark Grunte Sutkiene assisted BOLE with structuring the transaction and with the preparation of the transaction documents. Partner Risto Vahimets and Associate Tanel Kuun led the team on the matter. 

Sorainen Estonia has advised Metsaliitto Cooperative on the sale of its subsidiary Metsa Wood Eesti to the Estonian Combimill. 

The parties agreed on commercial cooperation in raw material procurement as well as by-product and sawn timber sales. The transaction is not expected to have a significant impact on Metsa Wood’s financial results. 

“This arrangement is in line with Metsa Wood’s strategy of industrial efficiency and investment in resources in the continuous development of the competitiveness and productivity of Metsa Wood’s core business,” said Esa Kaikkonen, Executive Vice President of Metsa Wood. 

Metsa Wood Eesti is the Estonian subsidiary of Metsa Wood and its sawmilling activities are located at the production unit in Reopalu, Jarva County, central Estonia. The annual capacity of the Reopalu sawmill is 75,000 m3 of spruce timber. Turnover of Metsa Wood Eesti amounted to approximately EUR 16 million last year and the company employs 38 people. Combimill is a prominent Estonian producer of pine sawn timber with a production facility located in Koidama, Estonia. 

Sorainen provided transaction advice, coordinated merger clearance notification, and provided closing support. The team was led by Partner Toomas Prangli, Specialist Counsel Kadri Kallas, and Senior Associate Paul Kunnap.

Sorainen has represented 17 retired Estonian judges in their challenge to new legal amendments adopted by the Parliament of Estonia (Riigikogu) introducing a new indexing system for judges’ pensions.

The Estonian administrative court accepted the applicants’ complaint in January 2014 and forwarded the case to the Supreme Court which has the power to repeal unconstitutional provisions in full. On June 26, 2014, the Supreme Court en banc declared the cuts in judges’ pensions during the austerity period unconstitutional and repealed the challenged provisions with retroactive effect. 

According to Sorainen, the court ruled that the legislature had not sufficiently justified unequal treatment and was acting contrary to the principle of legitimate expectations. Judges’ pensions are not merely a social privilege but also a universal guarantee that judges can administer justice independently and without outside influence in accordance with the Constitution, the laws and their conscience. The court also found that a situation where regardless of any general wage increases the salaries of judges will remain at the same level may in the long term seriously threaten the sustainability and independence of the judiciary. The dispute has been widely discussed in the Estonian media. The ruling could have far-reaching effects as in principle its reasoning may be potentially relevant to other austerity measures. 

The judges were advised by Sorainen Partners Allar Joks and Carri Ginter.

The Estonian office of Sorainen has advised Eesti Energia on its agreement to sell Eesti Energia Vorguehitus — its network construction subsidiary — to Leonhard Weiss Baltic Holding.

Eesti Energia Vorguehitus provides both turn-key solutions as well as single projects for the construction and maintenance of electrical and communication networks, from design to construction and maintenance services. 269 employees work in the company. 

Sorainen states that “the transaction is in line with Eesti Energia’s strategy to focus on the oil shale industry, and the group will earn EUR 7 million from sale of Vorguehitus shares.” Leonhard Weiss Baltic Holding is a subsidiary of the Leonhard Weiss German engineering group, which has been operating in Estonia in the field of railroad construction and maintenance since 2011. 

“It makes sense for Eesti Energia to divest non-core operations as we are focusing more on the development of the oil shale industry,” Sandor Liive, Chairman of the Management Board of Eesti Energia, explained. “Vorguehitus, on the other hand, needs an owner whose main business is design and construction of networks. We managed to find such a new owner, which is why we hope that the company’s future development prospects are good.” 

Alexander Schneider, Chairman of the Management Board of Leonhard Weiss Baltic Holding, added that Vorguehitus, which will be renamed “Leonhard Weiss Energy”, can use Leonhard Weiss’ existing network in the Baltic and Scandinavian countries to develop and expand its business further. 

The completion of the transaction is subject to conditions, including approval by the Estonian Competition Authority. Sorainen advised Eesti Energia in all phases of the transaction, including legal due diligence of operations, assistance in drafting transaction documents and in negotiating the terms of the transaction and support on other transaction issues. The Sorainen team included Partner Toomas Prangli, Senior Associate Paul Kunnap, and Associate Sandra Metsamart. Eesti Energia’s financial advisor for the transaction was Porta Finance.