Category: Poland

Norton Rose Fulbright Lawyer Tomasz Rogalski has been appointed a Partner with the firm’s Warsaw office.

According to Norton Rose, Rogalski has more than 18 years of professional experience and has been at Norton Rose Fulbright since 2008. Also qualified as an insolvency practitioner, he advises on projects and transactions in banking and finance, energy and infrastructure, real estate finance, financial restructuring and insolvency, telecoms finance, and general lending transactions. He also focuses on financial services, regulatory matters, and fintech. Prior to joining Norton Rose, Rogalski spent over two years as an Associate with M. Furtek i Wspolnicy, between 2006 and 2008.

“Since joining Norton Rose Fulbright 15 years ago, Tomasz has contributed a huge amount to our banking and energy practice in Poland,” Norton Rose Head of Warsaw office Grzegorz Dyczkowski commented. “We very much look forward to working alongside him in his new role as we continue to service our clients in Poland and abroad.”

Gessel has advised private equity fund EMSA Capital on the full sale of Famed Zywiec to Czech fund BHM Group. Wolf Theiss advised the buyer.

Famed Zywiec is a Polish medical equipment manufacturer concentrating on operating tables and hospital beds, with over 75 years of business operations.

EMSA Capital is a private equity firm investing in CEE.

The BHM Group is a Prague-based private equity firm focusing on real estate, retail, renewable energies, and medical technology.

The Gessel team was led by Managing Associate Krzysztof Jasinski and included Partner Dominika Ramirez-Wolkiewicz and Associates Marcin Walczak and Magdalena Mirkowska.

The Wolf Theiss team included Partner Jacek Michalski, Counsel Jakub Pietrasik, Senior Associate Joanna Wajdzik, and Associate Malgorzata Banaszkiewicz.

Disagreements between shareholders can be a healthy thing, leading to creative solutions through the reaching of compromises. Differences can involve issues as diverse as how a company should be managed and controlled, and the direction and strategy it is taking. However, if differences become entrenched, the result can be potential deadlock and the loss of the ability to make important decisions, which can be severely damaging to a company and its shareholders.

One way of resolving this potential problem is though the incorporation of Deadlock provisions within shareholders’ agreements, investment agreements or articles of association.

What is deadlock?
The situation of deadlock is tightly defined, with qualifying conditions usually set out in shareholders’ agreements. These are generally situations which go beyond a mere single ineffective vote by shareholders.

Usually, a number of votes on the same issue must be made over a period of time, with the outcome being consistently indecisive. Such delay would generally give shareholders time to compromise on or find other ways of resolving the issue.

Deadlocks can also occur when other dispute resolution methods have been tried and failed, for example, when shareholders’ agreements provide for mediation to find an amicable solution if an issue is not resolved after two general meetings.

Deadlock provisions are a way of forcing a decision in such situations, as they are often so severe for one side that the threat of their use is enough to force the acceptance of a compromise. Due to their extreme nature, the circumstances in which they can be used are usually limited to matters significantly affecting business operations.

Common types of deadlock clauses

Although deadlock clauses can be found under a plethora of terms, they all boil down to a change in controlling interest, via one party selling their shares to the others to facilitate the taking of decisions on important matters by the remaining shareholders and are all generally types of conditional termination provisions. Common examples of deadlock clauses in shareholders’ agreements include:

Shotgun / Russian Roulette

Such clauses allow one shareholder to make an offer to buy out the other shareholder for a certain price and under certain terms and conditions. The other shareholder may then either accept such offer or buy the shares of the offeror for the same price and under the same terms and conditions (assuming there are two equal shareholders).

Texas Shootout

In this type of deadlock clause, each shareholder sends a sealed bid for the others’ shares to an independent and neutral third party. The third party then opens all bids at the same time and the highest bid wins, with the winning shareholder required to buy the others out at that price.

Auction

An auction is similar to a shotgun mechanism as the offering shareholder may have the opportunity to pay a price of their choice, including a premium. However, an auction differs from a shotgun approach, in that it lacks adverse consequences for shareholders making low bids, as the outcome simply depends on the highest bid.

Summary

The absence of appropriate clauses to resolve deadlocks before they occur can come at a high price. With such clauses, if there is severe disagreement, there are various ways of seeking exit from the company or resolving the problem such as using drag along clauses. Given the genuine possibility of deadlock among shareholders and the existential threat this can pose to a company’s ongoing viability, shareholders should ensure the shareholders’ agreement contains robust and precise provisions on procedures designed to resolve these matters.

By Dominik Karkoszka Senior Associate, and Adam Czarnota, Associate, Kochanski & Partners

Former NGL Legal Partner Jaroslaw Witek has joined Dentons’ Warsaw office as a Partner to lead the firm’s Defense and Security group.

Specializing in defense, public security, and aerospace projects, Witek was previously a Partner with NGL Legal from 2018 to 2023. Earlier, he spent over ten years with DLA Piper, having first joined the firm in 2008 as a Trainee. He was promoted to Junior Associate the same year, and then became an Associate in 2010, Senior Associate in 2015, and a Counsel in 2015.

“As a result of the war in Ukraine, our government has had to redefine its approach to security and defense,” Dentons Poland Managing Partner Arkadiusz Krasnodebski commented. “The establishment of a multidisciplinary Defense and Security group addresses this new reality and growing market need. Jaroslaw’s unique experience gained on some of the most demanding projects on the market, and his in-depth knowledge of the defense and security sector open up new opportunities for us to provide top-quality services in response to the evolving needs of our clients.”

Szybkowski Kuzma Jelen Brzoza-Ostrowska has advised Atman on its acquisition of land in Duchnice for a data center project.

According to SKJB, the acquired land near Ozarow Mazowiecki will be used for the construction of a data center with a target capacity of 43 megawatts and an approximate colocation surface of 19,000 square meters.

“Atman has a 15% share of the data center market in Poland and the purchased land will be the third Warsaw data center of this operator,” the firm reported.

Atman is a Warsaw-headquartered data center operator in Poland and CEE, offering colocation and cloud computing services, as well as server hosting, data transmission, Internet access, and other telecommunication and business-to-business services.

The SKJB team was led by Partner Agnieszka Kuzma and Associate Natalia Stys.

B2RLaw has advised DocPlanner on its acquisition of MyDr. LSW Lesnodorski Slusarek & Partners advised the sellers.

According to B2RLaw, DocPlanner has made nine acquisitions to date as part of its global expansion strategy, including TuoTempo in Italy, Doctoralia in Spain, and Eniyihekim in Turkey, as well as German counterpart Jameda from Hubert Burda Media last year. DocPlanner’s acquisition of MyDr marks the company’s first acquisition in the Polish market.

Polish unicorn DocPlanner operates under the ZnanyLekarz brand in Poland and creates digital apps and software solutions for doctors, clinics, hospitals, and patients. The platform provides free doctor reviews and instant online appointment booking for patients through its online marketplaces.

MyDr provides technological solutions to the medical sector through its MyDr EDM and Dr100 software.

The B2RLaw team was led by Senior Partner Rafal Stroinski and Partner Aleksandra Polak and included Partner Marcin Huczkowski, Counsels Malwina Niczke-Chmura and Paulina Wyrostek, Senior Associates Krystyna Jakubowska and Teresa Pilecka-Juda, and Junior Associate Danyila Zubach.

The LSW team included Partner Krzysztof Laskowski and Associates Michal Klimowicz, Magda Miernik, Pawel Baran, and Pawel Mackus.

On 1 January 2023, an amendment to the Act on Significant Market Power in the Sale of Agricultural and Food Products and Its Abuse (the “Act”) comes into effect. The amendment significantly expands the Act’s scope both in terms of who is affected as well as the obligations it imposes.

All purchasers of food and agriculture products need to reassess whether they are now subject to the amended Act and revise their internal rules and contractual relations with suppliers accordingly.

Who is affected?

Before the amendment became effective, only those retailers with annual turnover from the sale of food and agriculture products in excess of CZK 5 billion (approx. €207 million) were subject to the Act—i.e. it applied to only a few of the largest supermarket chains in the Czech Republic.
However, from 1 January 2023, the Act applies to all purchasers in the food and agriculture chain (i) whose turnover exceeds €2 million and at the same time exceeds the turnover of their supplier, or (ii) whose total revenue in the Czech Republic exceeds CZK 5 billion. The amendment removes the previous condition that the turnover threshold applied only to the sale of food/ agricultural products, and hence extends Act’s scope to all entities whose total turnover exceeds certain statutory thresholds, regardless the source of such revenues.

In other words, the Act now applies to all entrepreneurs who, even marginally, purchase food or agriculture products as part of their business if their turnover exceeds the aforesaid limits. At the same time, new rules also apply to purchasing alliances whose members’ total revenue exceeds the statutory turnover thresholds. According to preliminary estimates from the Office for the Protection of Competition (the “Office”), the Act will apply to some 800 additional entities. Furthermore, the amendment extends the material scope of the Act, since the definition of food and agriculture products now includes, for example, live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage, and prepared animal fodder.

The amended Act will newly impact a much wider range of businesses—for example, online retailers, food/ meal digital platforms, gas stations, drugstores, pharmacies, restaurant chains, service providers (such as those offering accommodation, sports, etc.), tobacco shops/ newsstands chains, etc.

New obligations under the amended Act

First, the Act stipulates that contracts between purchasers (having significant market power) and suppliers must be concluded in writing and always before the respective deliveries take place. The contract must include specific provisions, such as an exact specification of the purchase price, clear specification of the promotional conditions (if agreed) and invoice due date, which must not exceed 30 days.

Second, the purchasers must refrain from “unfair trading practices”, i.e. practices that substantially deviate from good and fair commercial practice, such as the unilateral imposition of contractual obligations on suppliers. The amended Act explicitly lists the following as unfair practices:
• Unjustified discrimination between suppliers;
• Tying consent to the conclusion of a contract to the condition of the purchase of services or goods;
• Arbitrary change of contractual terms;
• Requiring reimbursement of the purchaser’s costs or payments for promoting the products;
• Noncompliance with statutory requirements for supply contracts.

For noncompliance, the purchaser may be fined up to CZK 10 million (approx. €413,000) or 10 percent of the purchaser’s group turnover. In addition, the Office can impose remedial measures, for example, in the form of an obligation to return to the harmed suppliers the benefits obtained through the purchaser’s use of unfair trade practices. In the past, for example, the Office imposed a fine of CZK 83 million on the hypermarket chain MAKRO as well as ordering the grocery chain HRUŠKA to return a benefit of CZK 39 million to its harmed suppliers.
In this context, the chairman of the Office publicly declared the intent of the office to immediately focus on entities that are newly subject to the Act.

By Petr Zakoucky, Managing Partner, Adam Prerovsky, Senior Associate, Tomas Pavelka, Associate, Dentons

Poland is experiencing a lot of regulatory and legislative changes, primarily driven by (new) EU directives. The energy, commercial, employment, and consumer protection sectors are all in flux, according to Cezary Zelaznicki, PwC Legal Poland Managing Partner and PwC EMEA Legal Business Solutions Leader.

“The energy crisis and the market’s response to it will likely be the hottest topic in the near future,” Zelaznicki begins. “With the incoming EU directives soon to be implemented in Poland, the way in which the energy markets ebb and flow will change.” What’s more, he reports that the Polish government has introduced “a number of support packages seeking to reduce the negative impact of the rising energy prices by, in particular, introducing measures such as price freezes for sensitive customers and setting a maximum price for selected types of customers and the balancing market.”

Zelaznicki also reports that, after “many years of considerations and analysis, the Polish commercial code received a much-needed overhaul. Now, the code includes holding law regulations that allow local subsidiary companies to be guided by overall group interests.” That wasn’t the case before, as “there had been many complications that local subsidiaries were facing because the regulator only took into account the interest of the local company and not the group as a whole,” he explains.

According to Zelaznicki, this means that certain decisions – for example, related to global financing and loans or group reorganizations – are less problematic to undertake. “The holding law principles allow for a much broader interpretation,” he says. “The concept of binding instructions has also been introduced, which will ultimately provide important guidance as to what a local subsidiary can and cannot do while securing the local officers.”

There has also been movement on employment and consumer protection legislation, Zelaznicki says. “The EU well-being directive’s expected implementation will change certain statutory conditions of employment and rights of employees, among others aimed at facilitating combining work and private life for parents. In addition, the new legislation is to be adopted regulating remote work in a more comprehensive way than the legal frame existing currently. Also, there are new possibilities for employers when it comes to testing their employees for sobriety and drug usage,” he explains. “Moreover, with the incoming implementation of the Omnibus directive into the Polish legal order arriving soon, there will be changes made with respect to consumer protection.” According to Zelaznicki, these will be most important for the retail industry and online marketplaces. “A new mechanism for consumer protection will be implemented, with more transparent information required to be made readily available for all,” he adds.

Finally, Zelaznicki offers an insight into “a general trend that we have seen, as a consequence of the changing and trying times we live in – a trend of clients seeking a foundational change in the way legal services are consumed.” According to him, clients are “looking to outsource entire processes to be delivered with the support of technology and in alternative delivery models (ADMs) in an effort to streamline their operations – and with all that’s going on right now, the markets will have to adapt.”

Former Squire Patton Boggs Of Counsel Michal Smolny has joined the Polish office of Eversheds Sutherland as a Partner and the Head of the firm’s Real Estate practice as of January 2, 2023.

Specializing in real estate and energy, Smolny was an Of Counsel and Co-Head of Real Estate at Squire Patton Boggs from 2019 to 2023. Earlier, he spent over 12 years with Allen & Overy, first as an Associate and then as a Senior Associate from 2010 to 2019. Prior to that, he was a Lawyer with Miller, Canfield, W.Babicki, A.Chelchowski i Wspolnicy from 2004 to 2007. Between 2002 and 2004, he was a notary’s assistant with the Notary Office of Iwona Umecka.

According to Eversheds Sutherland, the firm’s Real Estate practice was previously a part of the Real Estate and Infrastructure Projects practice led by Krzysztof Wierzbowski. “According to the firm’s newly adopted organizational structure, Krzysztof Wierzbowski will remain Head of the Infrastructure Projects Practice,” the firm informed. “The two partners will work closely together since the scopes of their practices do overlap.”

“While welcoming Michal and wishing him much success in his new professional role, I would like to thank Krzysztof Wierzbowski, who remains an undisputed authority in the fields of real estate and infrastructure,” Eversheds Sutherland Poland Managing Partner Ewa Lachowska-Brol commented. “Krzysztof has been developing these areas for many years, working on countless, often pioneering and strategic investments in the Polish market, thus consistently building our firm’s reputation.”

“I am very pleased to join the firm and take the lead of the Real Estate team,” Smolny added. “The positive energy and commitment of the partners and the entire team to work with me allows me to look to the next year with great optimism and focus on the needs of the firm’s clients.”

Linklaters has advised NEPI Rockcastle on its acquisition of the Atrium Copernicus Shopping Center in Torun from G City Europe. Dentons advised the seller.

According to Dentons, “G City Europe sold the property as part of its strategy to reposition its portfolio toward large, high-quality dominant shopping malls in prime urban locations and to invest in a new class of assets.”

The agreed property value was EUR 127 million. The “Copernicus Shopping Center, with a gross leasable area of 48,000 square meters, is the dominant retail scheme in Torun, at the city’s strategic location,” Linklaters informed, with tenants including Auchan, H&M, Stradivarius, Media Markt, LPP, and Decathlon.

NEPI Rockcastle owns and operates shopping centers in CEE. G City Europe, formerly Atrium European Real Estate, is a shopping center developer and operator.

The Linklaters team was led by Partner Janusz Dzianachowski and Senior Associate Jedrzej Palka and included Managing Associates Tomasz Trystula, Wojciech Podlasin, and Krzysztof Gorny, Senior Associate Joanna Koterbska, Associates Maksymilian Hau, Bartosz Boenigk, and Daria Wojciechowska, and Junior Associates Aleksandra Mielniczuk and Jacek Widenka.

The Dentons team was led by Partner Jacek Jezierski and included Senior Associate Alicja Pulawska and Associates Zuzanna Sobon and Damian Lewandowski.