Sorainen Latvia has advised Isnaudas Forest Holding on the EUR 44.5 million sale of its five subsidiaries to SCA Mezs Latvija. Glimstedt reportedly advised Mezs Latvija on the transaction.
Sorainen’s included Managing Partner Eva Berlaus and Senior Associate Natalija Sestakova.
Sorainen has advised Lords LB Baltic Fund III, managed by the Lithuanian investment company Lords LB Asset Management, on the sale of a logistics center in Riga to EfTEN Real Estate Fund 4.
According to Sorainen, “the center, located on Sigulda Street and occupying an area of 50,000 square meters, was built in 2008. The center is currently leased to two tenants: DO IT, a Danish importer and distributor of home furniture operating under the retail name JYSK, and Orkla Logistics, a supplier of branded consumer goods to the grocery, specialized retail, pharmacy and bakery sectors.”
The transaction, which was described by Sorainen as the largest logistics sector transaction in Latvia since 2018, is expected to close in several months.
Sorainen’s team included Partner Kestutis Adamonis and Senior Associates Karolis Kunigelis, Renate Purvinska, and Jorens Jaunozols.
Sorainen did not identify counsel for the sellers.
Cobalt has advised Latvian IT company Tilde on the sale of Jumis Pro, its accounting and business management system business, to Nordic IT company Visma. Sorainen advised Visma on the deal.
According to Cobalt, “Jumis Pro is a provider of Tildes Jumis, a suite of accounting and business management systems, used by more than 10,000 small and medium-sized enterprises in Latvia, including accounting service providers. Jumis Pro was formed as an independent company in August 2020 after separating from SIA Tilde, and it will continue to operate as a separate entity within Visma.”
Cobalt’s team was led by Managing Partner Lauris Liepa and included Partner Sandija Novicka and Associates Marija Berdova and Janis Sarans.
Sorainen’s team in Latvia included Managing Partner Eva Berlaus and Senior Associate Renate Purvinska.
TGS Baltic has advised Latvia’s SIA Tepix on the sale of its carpet rental business to SIA Lindstrom, part of the European textile services Lindstrom Group. Sorainen advised Lindstrom on the deal.
According to TGS Baltic, “Tepix, which had gained the trust of customers with a flexible and customer-oriented approach, transferred its customers to Lindstrom, which continued to serve the acquired customers from a new location – its new service center equipped with modern equipment, maximum process automation.”
TGS Baltic’s team was led by Partner Andra Rubene.
Sorainen’s team included Managing Partner Eva Berlaus and Associate Liva Aleksejeva.
According to Valts Nerets, Partner at Sorainen in Latvia, recent municipal elections have resulted in a political change in the Latvian capital of Riga, while, on the national level, the Latvian legislature and government are trying to create a business-conducive environment, which has attracted new companies to the market, mainly from Belarus.
“We had remarkable municipal elections in Riga recently,” commented Nerets. “The elections marked a quite significant change in the local government, because they ended the over-a-decade-long rule of the Social Democratic party ‘Harmony’ (‘Saskana’ in Latvian) – which had held power in Riga since 2009, and which is the main political representative of the Russian-speaking population of Latvia.” Nonetheless, Nerets insists, “the political situation in Riga is not settled yet, as, even though the elections happened almost two months ago, the new Mayor has only been appointed in the last few weeks.”
“In addition,” Nerets continues, “new members of the management boards have been appointed in many communal service enterprises. They levied allegations about corruption and embezzlement against former officials from the previous regime.” It is not yet clear if these allegations hold water, and Nerets says that “whether the previous regime did everything according to law is still under evaluation.”
Despite the developments on the municipal level, Latvia’s parliament – the Saeima – has not been distracted from its ongoing mission to establish a new type of court in the country, Nerets says. “The idea is to create an Economic Affairs Court, which should be operational as of January 2021.” According to him, “the new court will consist of ten judges, elected for life by the parliament. The Court will deal with a wide array of areas, ranging from tax evasion, money laundering, and fraud cases, to civil and commercial cases valued at EUR 500,000 or more.” Another important role of the court, he says, will be “to handle investment disputes.” (A more thorough analysis of the new court was included in the March 2020 issue of the CEE Legal Matters magazine (here) and published on April 29, 2020 on the CEE Legal Matters website).
Many moves taken by the legislature and the government in Latvia are aimed at stimulating business. Nerets reports that “the government is trying to promote the country as an attractive location for foreign businesses. One way of doing so is through tax reform. The government is considering reducing the social tax, which should persuade new companies to open here.” Some have already taken an interest in moving to Latvia, he says, and he points out that “a significant number of Belarusian IT companies are looking to relocate here, due to the sensitive political situation in their country.”
Not all is well in Latvia, however, and the Covid-19 pandemic has taken its toll on certain industries. “Hotels are closing down,” Nerets says, “and we still have to see how that industry will fare in the future.” There also seems to be a rise in hearings and trials, he says, in part because “the courts wouldn’t postpone hearings in the last couple of months, unlike at the beginning of the pandemic.” This is good for lawyers, it appears; he notes that “as a result, the legal market recovered somewhat in September.”
The only major change in Latvia’s legal market in recent months, Nerets says, is the merger between “Walless and Primus Derling in Latvia, as well as Derling Primus in Estonia” (as reported by CEE Legal Matters on October 2, 2020). “Other than that, there is not much else to report on,” he says.
TGS Baltic lawyer Violeta Zeppa-Priedite has become Head of the White Collar Crime & Corporate Investigations practice in the firm’s Latvian office.
Zeppa-Priedite will be assisted in her new role by TGS Baltic Senior Associates Dmitri Teplohh and Matas Balenas.
At the beginning of her career in law, Zeppa-Priedite honed her skills at the Public Prosecutor’s Office and the Ministry of Justice of Latvia from 1996 to 2002. After years of lecturing at various institutions and working for Latvia’s Corruption Prevention and Combating Bureau, she joined the Triniti law firm in 2012, where she spent another seven years, before joining TGS Baltic in 2019. She obtained her Ph.D. from the Faculty of Law of the University of Latvia in 2010.
Ivars Grunte, TGS Baltic’s Managing Partner in Latvia, explained that, “the White Collar Crime and Corporate Investigations practice group will differ in that it will not only specialize in white collar crimes, but it will also provide legal assistance in the areas of corporate compliance.”
Cobalt Latvia has advised two natural persons in an administrative appeal of a decision of Latvia’s Office of Citizenship and Migration Affairs denying them residence permits due to non-compliance with the provisions of the Immigration Law.
According to Cobalt, “the situations of both … clients were characterized as unusual cases which the legislator had not foreseen when adopting the relevant regulation, as a result of which the OCMA was obliged to make proportionality considerations and apply consequences that would be adequate, proportionate, and fair.”
Ultimately, Cobalt reports, the head of the OCMA revoked both unfavorable decisions and the two applicants were granted permanent residence permits.
Cobalt’s team consisted of Associate Marija Berdova and Assistant Lawyer Alina Ustinova.
Cobalt has represented Latvia’s Central Election Commission in proceedings before the Regional Administrative Court in Riga regarding the annulment of extraordinary elections to the Riga City Council.
Cobalt reports that the “extraordinary elections to the Riga City Council took place on August 29. [Subsequently] it was discovered during the elections [that almost] 600 ballots have been placed in envelopes with missing electoral seals in three polling stations. The law does not allow these ballots counted due to technical inadmissibility. On September 14 to 16 the Regional Administrative Court examined the applications filed against the Central Election Commission by four political parties and their associations, in which a number of claims were made: a request to annul the results of the elections to the Riga City Council in three polling stations, to oblige the CEC to announce re-voting in the three polling stations, to recount votes in all the polling stations in Riga, as well as to announce repeated elections or repeated voting throughout the city of Riga.”
“The court satisfied the applications for the recounting of votes in the three polling stations in Riga, where the court identified accidental human errors in the work carried out by the polling station commission, as a result of which the ballot envelopes did not bear the seal,” according to Cobalt. “The Regional Administrative Court carried out an examination of the evidence and concluded that the violations had not resulted from illicit interference. The court derogated from the requirement laid down in the Elections Law to declare the unsealed envelopes removed from the ballot box null and void. The court instructed to have them opened and add the votes to the total number of votes cast, so to ensure the fundamental rights of citizens to participate in elections and express a free will of the voters as enshrined in the [Constitution]. The court ruled that the unsealed envelopes shall be taken into account when recounting the votes in the three polling stations.”
Other applications to the court were rejected, Cobalt reports, and the court found that “there were no grounds for recounting votes in other polling stations, all the more so for announcing repeated extraordinary elections to the Riga City Council, owing to the fact that a fair and appropriate settlement may be achieved with the first judgment of the Regional Court on the recounting of votes.”
Following the court’s instructions, the Central Election Commission recounted the votes. The recounts did not affect the outcome of the elections. Cobalt adds that the Central Election Commission’s recount decision cannot be appealed and that “the extraordinary elections to the Riga City Council have been finalized, and the newly elected City Council may convene for legislative sessions.”
Cobalt’s team included Managing Partner Lauris Liepa and Associate Inese Greke.
On September 14, CEE Legal Matters reported that Sorainen had advised Brette Haus on the preparation of a sales contract template for prefabricated folding houses. CEEIHM spoke with Gennadii Bakunin, CEO of Brette Haus to learn more about the matter.
CEEIHM: To start, tell our reader a bit about Brette Haus, please.
Gennadii: Imagine a world, where houses are assigned to people, not places! The same happened with the phones 20 years ago and it led to the formation of new business opportunities.
Mobile homes eventually became a modern trend in construction. However, portacabins and tiny shelters still require cranes, dozens of qualified workers, and so on. The idea of “just mount and move in” was spoiled, and technologies proved to be old-fashioned.
Brette Haus decided to look at this problem from a new perspective. We prefabricate folding houses with a unique 100-cycle hinge system (it allows us to increase useful space by up to 200%). It makes comfortable, durable houses ready to relocate almost for an unlimited amount of times. Your cozy home anywhere!
CEEIHM: According to Sorainen, your company provides “innovative and mobile building solutions.” Can you elaborate a bit as to what these solutions are?
Gennadii: The primary focus is on the out-of-city b2b hospitality market in tourism, construction, agriculture, and event industries. During the manufacturing process, cabins generate about 80% less waste and use 99% less water than standard site-built houses. Basically, Brette Haus produces houses with a positive environmental impact. It is our strong principle to make houses only from natural materials. We use solid wood for walls, floors, and ceilings.
Such a sustainable nomadic solution doesn’t require much paperwork as folding homes could be compared to a mobile estate. In many countries, this eliminates the need for a building permit.
The European market volume we are looking at is EUR 1 billion. Our target is 1% of that market volume in three years. We devoted the first 18 months of our existence to the market research and the development of the product. We built up the MVP of our product and the net of sales agents. The next step would be sales.
CEEIHM: What is behind this mandate — why did this need for a sales contract template come up now?
Gennadii: We decided to invest in a fair sale agreement that will protect us and guarantee the quality of the product to our customers.
My college mate and lawyer, Dmitry Grits, promotes a technique of simple and understandable agreements. I really liked this concept. We were looking for a legal company that would support this idea and develop an agreement that needs no dictionary to understand.
We also wanted the terms of the contract to read naturally along the order of the action sequence. This is easy to read. Ultimately, simplicity helps to agree on the terms faster.
We tried to minimize chances people would feel deceived in their expectations down the line due to vague wording, especially, when it comes to building permits and connection to the mains. Our market geography is versatile and we can’t work out every region regulations (though we tried, actually).
Our cabins are innovative and we needed to work carefully on the warranty and maintenance clauses. Customers should be able to get proper service, but no speculation should be allowed.
CEEIHM: What were the main considerations the firm had to incorporate in developing these templates and on what aspects did you foresee you’d get the most pushback from potential counter-parties?
Gennadii: My ideal agreement would fit into a double-sided A4 when printed. Unfortunately, there were many important elements to mention and we couldn’t fit everything in such a small space.
We like to think the best of our customers, but our colleagues say that there are two common problems all housing companies meet eventually: unpaid final fees and unreasonable warranty demands. Our product can be installed in three hours so we wanted to lock the right of ownership until the final payment arrives. Theoretically, we could remove the house it the payment is delayed by too much.
CEEIHM: Why did you choose Sorainen to assist you on this matter?
Gennadii: We were looking for a company that looks at startups as future partners, not temporary clients. The Latvian Startup Association advised us to contact Sorainen because of its good reputation in supporting local entrepreneurs. We got a really sweet offer from them compared to the competing legal companies.
But it was their attitude towards time that impressed me the most. I worked with many lawyers and most of them had issues with deadlines. The Sorainen team kept us informed about the status of our work all the time. It felt secure and safe to work with them.
Originally reported by CEE In-House Matters.
Cobalt has advised Dithmarschen Baltic GmbH on its acquisition of 100% of Dan-Lat Invest and ODK & RB. Actus Q reportedly advised the sellers on the deal.
Financial details of the transaction were not disclosed.
According to Cobalt, “Dan-Lat Invest and ODK & RB are two Latvian agribusiness companies, which hold approximately 600 hectares of land.”
Cobalt’s team included Partner Toms Sulmanis and Senior Associate Diana Zepa.
Editor’s note: After this article was published, Actus Q Law CEE Legal Matters that it’s team was led by Senior Lawyer Indra Gengergaile-Auzina.