Category: Lithuania

Cobalt has advised Practica Capital on its investment in startup Oxipit. The EUR 1.5 million seed round was co-led by Practica Capital, Koinvesticinis Fondas and various business angels. Sorainen advised Oxipit on the deal.

According to Cobalt, Oxipit is a Lithuanian computer vision software startup specialized in medical imaging that has “created the CE certified multi-award-winning ChestEye radiology imaging suite.” Practica Capital invests in Baltic innovation and technology-driven ventures. Koinvesticinis Fondas is a venture capital co-investment fund that invests in early-stage companies. 

The Cobalt team included Partner Elijus Burgis and Associate Julija Timoscenko.

Sorainen’s team included Partner Mantas Petkevicius, Senior Associate Vytautas Sabalys, and Associate Laura Matuizaite. 

Giedre Dailidenaite, Partner at Primus Derling in Vilnius, says the recent news in the Lithuanian legal community involves FinTech regulations, “in particular involving the difficulties FinTech businesses are facing with anti-money laundering and data protection issues.”

Dailidenaite says that interest in Lithuania’s FinTech sector is decreasing, and thus “it is an area we hope the government and public agencies will work more in to increase interest.” 

Additionally, Lithuania is anticipating new anti-money laundering rules in early 2020, Dailidenaite says, adopting the amendments the EU recently introduced to its Anti-Money Laundering Directive. “Although it is hard to predict the ultimate effects of the law,” she says, “we already feel changes in how businesses operate following the last years’ changes in this field.” She’s not sure all these changes are a step forward, however. “For the general public they are positive, but I cannot identify them as such for businesses,” she says, adding that elements such as the disclosure of ultimate beneficiary owners are already proving challenging for the business community.

Another significant change is a new law on the insolvency of companies that will come into effect in 2020, which will change the definition and criteria for insolvency, as well as the procedure for initiating the insolvency process. Dailidenaite says that she is hopeful about the law, pointing to the opportunity to agree with creditors on aid for companies in financial distress, as well as the possibility to sell an entity without the obligations forming the basis of creditors’ claims, which were not available options in the past. “It will be interesting to observe how the law is applied in practice,” Dailidenaite says. “Up until now it has been treated as a more flexible law, but practice will show.” 

Finally, Dailidenaite points to Lithuania’s May 12, 2019, Presidential elections, which saw independent candidate Gitanas Nauseda win in the second round of voting, as a positive development. Nauseda was inaugurated on Friday, July 12, 2019.

Motieka & Audzevicius has assisted 70 Ventures, UAV, with the preparation of its investment funds using the Accelerator Fund of Lithuania’s Ministry of Economy and Innovation.

According to the firm, “at the final stage M&A was responsible for obtaining a management company permit for 70 Ventures, UAB and [obtaining] approval of the incorporation documents of the 70 Ventures Accel and 70 Ventures Seed investment funds under Lithuania’s Law on Collective Investment Undertakings Intended for Informed Investors.” According to the firm, “our assignment covered the drafting of the licensing documents as well as coordination of the overall regulatory process with the Bank of Lithuania. The 70 Ventures investment funds are among the first to be approved by a regulator.”

Also according to Motieka & Audzevicius, the Accelerator Fund is implemented via the Business Financing Fund — a fund of funds financed from the European Regional Development Fund, which is itself financed from EU funds under the Operational Programme for the EU Funds’ Investments in 2014–2020.

The firm claims that “it is expected that 70 Ventures pre-seed and seed funds will foster early-stage business and improve the Lithuanian ecosystem of the start-ups.” 

Primus Derling has advised Polish feature phone manufacturer Maxcom SA on its EUR 280,000 acquisition of 20.15% of Rubbee, a Lithuanian manufacturer of electric bicycle drives.

Rubbee was founded on October 16, 2015 to research, develop, assemble, and produce an electric bike drive. 

Maxcom was established in 2001. The company is engaged in the production and continuous improvement of telecommunications devices, including GSM mobile phones, smartphones, strong phones, wireless loudspeakers, smartwatches, smart bands, electric scooters, wired and wireless telephone telephones, and walkie-talkie PMR radios.

The Primus Derling team was led by Partners Robert Juodka and Giedre Dailidenaite, assisted by Senior Associates Petras Pinevicius and Greta Bagdanaviciute.

Primus Derling informed CEE Legal Matters that it was unable to provide additional information about the deal.

Sorainen has successfully represented the insolvent credit union Taupkase (under the administration of Klaipedos Administratoriu Biuras) in a dispute with employees over the amount of downtime pay and termination compensation they are due.

According to Sorainen, “the employees claimed that bonuses paid should be included when calculating the average wage. The court found in favor of our client, stating that it was lawful not to include bonuses when calculating the average wage of employees.”

The Sorainen team was led by Partner Kestutis Svirinas, working with Senior Associate Kazimieras Karpickis and Associate Greta Kubiliunaite. The same team also successfully represented the company in a case regarding whether a share can be recognized as a deposit.

Walless has advised Affidea on the acquisition of UAB Medicinos Paslaugu Grupe from the LitCapital I KUB fund. TGS Baltic advised the sellers.

Affidea is a provider of diagnostic imaging, outpatient, and cancer care services in Europe, operating in 16 countries. MPG is a private healthcare service provider in Lithuania, with a network of 12 outpatient and diagnostic imaging clinics in eight cities across the country. MPG provides medical services through its affiliate UAB Endemik

The Walless team consisted of Managing Partner Dovile Burgiene, Partner Laura Ziferman, Senior Associates Arturas Grimaila and Giedre Padaigiene, and Associate Giedre Banyte. 

The TGS Baltic team consisted of Partner Aurimas Pauliukevicius and Junior Associate Paulius Dabulskis.

Sorainen has successfully represented the insolvent credit union Taupkase (under the administration of Klaipedos Administratoriu Biuras) in a case regarding whether a share can be recognized as a deposit.

According to Sorainen, “the claimant, who was granted a loan by the union, sought to nullify [its purchase of] a union share as resulting from a mistake and asked the court to recognize the transaction as a deposit. The court ruled in favor of our client and dismissed the claim.”

“The claimant sought to prove that he had understood that a share would undoubtedly be repaid or set off against the last installment of the loan,” the firm reports. “Since bankruptcy proceedings were brought against the union, no such possibility arose. The claimant alleged that the union had misled him – they did not disclose the essence of a share and the fact that such a situation would occur in the event of insolvency. The court dismissed the action and observed that the applicant, a young person with higher education, could not have confused a share with a deposit.”

The Sorainen team was led by Partner Kestutis Svirinas and included Senior Associate Kazimieras Karpickis and Associate Greta Kubiliunaite. 

The Dispute Resolution team of Lithuania’s Motieka & Audzevicius has successfully represented Lithuanian deposit system manager Uzstato Sistemos Administratorius before Lithuania’s court of appeals.

According to Motieka & Audzevicius, “several users of our client [had] challenged the fees established by the client that should be paid by the manufacturers and importers in order to cover the costs of participating in the deposit system that relates to the management of one-way packaging waste collected under the system and its administration. The case related to the question [of] whether the fees established by the client were sufficiently substantiated [and] whether the fees did not provide prohibited cross-financing among different types of packages.”

According to the firm, “the court supported our client’s position and dismissed the opposing parties’ claim [in full.]“ 

Walless has helped Vilniaus Baldai get a parallel loan of EUR 37.8 million from the EBRD and AS Citadele Banka’s Lithuanian branch. Cobalt advised the lenders on the deal.

According to Walless, the loan will help Vilniaus Baldai, a Lithuanian furniture supplier, improve its production capacity by constructing a new manufacturing plant to replace its current facilities and consolidate its operations in one location. 

The Walless team consisted of Partner Evaldas Klimas, who advised Vilniaus Baldai on the construction agreement, and Partner Dovile Burgiene and Associate Enrika Tamasauskaite, who worked on financing aspects of the deal. 

The Cobalt team consisted of Associate Partner Eva Suduiko and Senior Associate Lina Taletaviciute-Misiuniene.

Primus Derling has successfully represented founders of PriceOn in a dispute before the Supreme Court of Lithuania.

The dispute lasted for five years and was based on claims from PriceOn investors. The Supreme Court ruled in favour of the PriceOn founders and overturned previous decisions of the court of the first instance and the court of appeals. 

According to Primus Derling, the award of the Supreme Court of Lithuania not only defended PriceOn against significant claims of the investors but also will serve as a reference point for start-ups in Lithuania.

The Primus Derling team consisted of Partner Marius Devyzis, Senior Associate Martynas Kalvelis, and Associate Ingrida Maciute.