Category: Poland

Hogan Lovells has advises Warburg-HIH Invest Real Estate on its acquisition of the Prime Corporate Center — a Warsaw office building — from Golub GetHouse. Clifford Chance advised Golub GetHouse on the deal.

The Prime Corporate Center (PCC) was completed in March 2016 and offers close to 20,900 square meters of lettable space located on 23 floors, as well as 197 spaces in its underground car park. The project is located on Grzybowska Street in Wola, a developing new business district in Warsaw. The building will be the headquarters of Raiffeisen Bank Polska S.A., which will be the only tenant for the next ten years.

The Hogan Lovells team advising Warburg-HIH was supervised by Partner Jolanta Nowakowska-Zimoch and was led by Counsel Justyna Szwech, “with great involvement from Associate Anna Wisniewska and lawyers Katarzyna Bialek and Katarzyna Dziewulska.”

Last year Hogan Lovells also advised Warburg-HIH on its acquisition of the Dubois 41 office building in Wroclaw, Poland, from the Nacarat real estate developer (as reported by CEE Legal Matters on November 30, 2015).

The Clifford Chance Warsaw team advising Golub GetHouse was led by Partner Daniel Kopania and included Senior Associate Joanna Biedka and Associate Katarzyna Perkowska.

Image Source: primecorporatecenter.pl

Drzewiecki Tomaszek has successfully represented the Polish private postal operator, InPost Group, in opposition proceedings concerning invalidation of trademark protection for the “PACZKOMAT” trademark against Poczta Polska (the Polish National Post). Poczta Polska was represented by Traple Konarski Podrecki.

On June 20th, 2016 the Polish Patent Office dismissed the claim of Poczta Polska, upon a finding that the “PACZKOMAT” trademark relating to InPost Parcel Lockers is distinctive and therefore eligible for patent protection.

InPost Group was represented by Drzewiecki Tomaszek Partners Andrzej Tomaszek and Marcin Szymanski.

Image Source: inpost24.com

In May 2016 the Warsaw office of Chadbourne & Parke spun off into independent status and is now operating as Radzikowski, Szubielska i Wspolnicy (RS&W), with Chadbourne itself no longer formally present in Poland.

Chadbourne issued only the following brief announcement about the change: “For improved flexibility and client service, it was decided that our Warsaw practice would best be conducted by Radzikowski, Szubielska i Wspolnicy operating as an independent law firm that is part of Chadbourne’s international legal network. We look forward to the ongoing success of this longstanding collaboration.”

Despite its withdrawal, Poland remains listed on the Chadbourne & Parke website with the note that “legal services in Poland are provided by Radzikowski, Szubielska i Wspolnicy sp.k., an independent law firm that is part of Chadbourne’s international legal network” — with users wishing more information sent directly to the RS&W website.

When contacted by CEE Legal Matters, both Chadbourne and RS&W stayed fairly tight-lipped about the change, with Chadbourne responding to our inquiries by suggesting we speak with RS&W, and RS&W responding to inquiries by forwarding Chadbourne’s statement and adding “we do not have further comments.”

Following the change, former Chadbourne and RS&W Partner Marek Krol left the firm to join Magnusson (as reported by CEE Legal Matters on June 23, 2016).

Since Poland became a member of the European Union in 2004, agricultural land prices have been constantly rising. However, agricultural land in Poland is still among the cheapest in Europe, costing on average only one third of what it brings in many Western European countries.

One reason for this is that EU nationals must obtain a permit issued by the Minister of the Interior and Administration in order to purchase agricultural land until the 12th anniversary of Poland’s accession. This requirement will cease to apply after May 1, 2016.

Many Polish farmers would prefer that the limitation be maintained, hoping that prices would stay at the current level, enabling them to expand their farms at a relatively low cost. It is feared that when the protection period ends there will be large-scale acquisition of agricultural land without the local population being consulted beforehand or community consent being obtained, threatening the interests of family farms. 

To address these anxieties, a legislative proposal is being promoted by the Polish Ministry of Agriculture and Rural Development. The proposed law provides that only individual farmers will be eligible to acquire agricultural land of an area over 3,000 square meters. Under the draft, an individual farmer is a person with agricultural skills who runs a farm not larger than 300 hectares and who has been a resident of a farming municipality for at least five years. Exceptions apply for the transferor’s relatives, local government units, and the State Treasury or the Agricultural Properties Agency (APA), as well as for churches and religious associations. Acquisition by other entities would be possible only under certain and strict conditions subject to a permit issued at the discretion of the APA. The acquirer of agricultural land would be obliged to run the farm for at least ten years from the date of acquisition, and the land could not be transferred to other entities during that period. The proposed amendments would apply not only to acquisition on a contractual basis but to all kinds of transfers, including acquisitions through mergers. In the case of acquisition as a result of any transfer other than sale agreement, the APA may submit a statement on acquisition. Moreover, the APA would have also a pre-emptive right to acquire shares in non-listed companies which own agricultural land. 

The proposed amendment is controversial, as the entire idea of the proposal may infringe rules and principles of EU law. For example, it may be held to breach the principle of free movement of capital among Member States. Case law of the Court of Justice of the European Union (CJEU) also explicitly precludes national rules requiring an acquirer of agricultural land to farm it in person and to be a resident of the municipality to which the land is a part.

An explanatory memorandum to the draft law indicates that similar regulations have been adopted by Hungary and Bulgaria. It is worth noting, however, that the European Commission (EC) has asked those two Member States to comment on the new legislation. Thus, it is possible that ultimately the EC may contest the proposed law by bringing an action against Poland before the CJEU.

The amendment is a revolutionary change to current regulations. It leaves a very narrow space for the free transfer of agricultural land. Planned greenfield investments and the warehouse business could also be affected. There will be need for close cooperation with local authorities to change the status of agricultural land to other uses. One result could well be the mass abandonment of agricultural land use in favor of other activities.

The proposed draft has been approved by the Parliament and is awaiting the signature of the President. It is planned for the new law to enter into force on April 30, 2016.

By Jedrzej Kniaznikiewicz, Associate, and Grzegorz Skowronski, Head of Real Estate & Construction Practice, Wolf Theiss Poland

This Article was originally published in Issue 3.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Linklaters has advised CBRE Global Investors in connection with its acquisition of the 44.4 thousand square-meter Jantar shopping center in Slupsk, Poland, from a subsidiary of Tristan Capital Partners. Dentons advised Tristan — which holds selling subsidiary Dormeo Investments in a 90/10% joint venture with minority shareholder Mayland Real Estate — on the EUR 92 million transaction.

According to Linklaters, the firm “was involved in and advised on all aspects of the transaction, starting from the legal due diligence, through tax advice, preparation and negotiation of transaction documents, until its signing and closing.” The firm’s team was led by Managing Associate Janusz Dzianachowski, supported by Associate Zuzanna Lipska, Counsel Mikolaj Bieniasz, and Senior Associate Krzysztof Gorny.

The Dentons team consisted of Partner Pawel Debowski, supported by Associate Jacek Jezierski.   

Linklaters has worked with CBRE Global Investors on a number of other matters as well, including its acquisitions of Galeria Sfera in Bielsko-Biala (as reported by CEE Legal Matters on December 10, 2015), the Galeria Mazovia in Plock (as reported by CEE Legal Matters on June 18, 2015), Warsaw’s Ideal Idea logistic park (as reported by CEE Legal Matters on December 12, 2014), and Warsaw’s Manhattan Business & Distribution Centre and Warsaw Distribution Centre logistic parks.

For its part, Dentons has advised Tristan Capital Partners on several matters as well, including its acquisition of the Enterprise Office Park and adjacent land in Krakow (as reported on May 28, 2015).

Image Source: balmainam.com

Noerr has announced that former CMS Senior Associate Jakub Lerner is joining Noerr’s Warsaw office as Local Partner and Co-Head of its Corporate and Mergers & Acquisitions practice group.

Lerner received a Master of Law degree from the Jagiellonian University in 2000, and an LL.M. degree from Cornell Law School in 2001. He is qualified in Poland, the UK, and the US. According to Noerr, “during his career Mr. Lerner has represented public companies, private equity firms and foreign investors in many of the high-profile M&A transactions and capital markets transactions. He is regarded as an expert for complex commercial transactions.”

Prior to joining Noerr, he worked in New York and Warsaw for Weil Gotshal (from 2001-2003), K&L Gates (from 2005-2010), and, most CMS (from 2011). Among the deals he worked on while at CMS were Amica Wronki S.A.’s acquisition of the entire issued share capital of the CDA Group Limited (reported by CEE Legal Matters on December 2, 2015), and on Bluehouse Capital’s acquisitions, as part of a joint venture with REINO Partners, of the Malta House in Poznan from Skanska Property Poland and the Alchemia I office building in Gdansk from Torus (as reported by CEE Legal Matters on August 6 and August 13, 2015, respectively).

Maciej Hajewski has joined Gras Savoye International – Willis Tower Watson CEEMEA as its new Regional Compliance officer.

Prior to his current role, Hajewski worked for 10 months for AIG as its Compliance Manager responsible for Poland, Bulgaria, and Romania. From July 2011 to July 2015 he was based in Warsaw as the Chief Risk and Compliance Officer for Aegon Poland and Aegon Romania. Earlier still, from September 2006 to June 2011 he was a Lawyer for the Polish Financial Supervision Authority.  He also has private practice experience with Hogan Lovells and the Karol Rutkowski Law Office.

He received a Master’s of Law from the European School of Law and Administration, Warsaw, in 2004.

Kochanski Zieba & Partners (acting as Polish counsel), Cliffe Dekker Hofmeyr (as South African Counsel), and Pinsent Masons (as UK counsel) advised Redefine Properties Limited on its acquisition of a majority stake in Echo Prime Properties B.V. The seller was advised by Weil, Gotshal & Manges.

The deal, concluded on March 1, 2016, consists of a share purchase and subscription agreement with Echo Investment S.A. (“Echo”) and EPP whereby Redefine will acquire 75% plus one share of the issued share capital of EPP, which indirectly owns a portfolio of prime real estate assets throughout Poland. According to Redefine’s release on the deal, it is its intention to reduce this stake to approximately 50% through the immediate on-sale of a portion of the EPP shares to a consortium of selected co-investors, on the same terms as those governing Redefine’s acquisition of the EPP shares. 

In explaining its rationale of the transaction, the Redefine release explained: “The transaction significantly advances Redefine’s international investment strategy, which is centred on geographic diversification and exploiting attractive initial yield spreads. The transaction presents a unique opportunity to create the leading commercial real estate platform in Poland and to build instant critical mass by acquiring a high quality retail-based portfolio with a strong local partner providing a substantial development pipeline, which will provide additional growth. In line with its stated intention, it is anticipated that Redefine’s offshore property assets will increase to 25% of its total property assets under management post the conclusion of the transaction.”

The total consideration payable by Redefine for the EPP shares, according to Redefine “shall be an amount equivalent to 75% of: EUR 1.188 billion; plus the amount of working capital held by the EPP group immediately prior to the effective date; plus the cash held by the EPP group immediately prior to the effective date; minus the amount of debt held by the EPP group immediately prior to the effective date.” The estimated result is of approximately EUR 362 million.

In addition, there is a mechanism in place in terms of which EPP will pay an earn-out to Echo in connection with planned GLA extensions to the properties within the property portfolio at an initial yield of 8.5% (with an estimated total value of approximately EUR 60 million). In this regard, EUR 9.775 million is payable by EPP to Echo on the effective date, in the context of an already-completed extension and in respect of which Redefine will pay EPP its pro-rata portion of the amount due, calculated with reference to its shareholding.

The KZP team advising Redefine on Polish matters was led by Adam Piwakowski, Partner and Head of International Practice Development and Strategy. The team also included Co-Managing Partner Rafal Zieba, Senior Partner Rafal Rapala, Partners Kamil Osinski and Szymon Galkowski, and Senior Associate Aleksandra Polak.

The Weil team advising Echo consisted of Warsaw-based Partners Pawel Zdort and Iwona Her, Counsel Ewa Bober, and Associates Filip Uzieblo, Piotr Fedorowicz, Jakub Kutzmann, Tomasz Bakowski, Leszek Cyganiewicz, Wojciech Czyzewski, Karolina Janus, Irmina Trybalska, and Maciej Wroblewski, and London-based Partner Samantha McGonigle and Associate Tomasz Rodzoch.

Gessel has secured a win for Gino Rossi S.A. in a court case brought against an unidentified producer of wristwatches labelled “gino rossi” for violating its trademark and rights to the business name.

According to a firm statement, the dispute, which lasted several years, “turned on the question of whether, if the subsequent user of the mark secured permission and registered trademarks incorporating that mark, such user may freely use marks which had previously been used by the company as its business name and as a label for its products.”

A second instance court ruling on January 20, 2016, confirmed the initial ruling that “the very fact that permission and registration had been secured for marks previously used by [the firm’s] client does not, in and of itself, exempt the defendant from liability for subsequent unlawful actions, in particular as regards violation of the fair competition rules.”

Partner Dorota Bryndal led the Gessel team, supported by Advocate Marta Grabiec and Managing Associate Adam Kraszewski. 

Image Source: gino-rossi.com

Poland is set to introduce a new restructuring law (the “Bill”) which should substantially change the country’s economic environment. The Bill provides for its entry into force on January 1, 2016, except for certain regulations that are to enter into force at a later stage.

Current Polish Bankruptcy and Insolvency Environment

Poland ranks 32nd in the “resolving insolvency” category in the World Bank’s June 2015 “Doing Business” rankings. The main drawbacks of the Polish bankruptcy procedures: their length, cost, and relatively low level of creditor claims satisfaction. The Bill may substantially change this situation, as it not only provides for new restructuring regulations but also amends the existing bankruptcy law. 

Restructuring First, But If It Fails, Fast Liquidation

Polish government officials have clearly stated the reasoning behind the new regulation: “Difficulties do not provide a reason to shut down business. Instead, the point is to change business.” The country’s lawmakers stress that international experience suggests that improving conditions for the effective restructuring of companies – and, if required, allowing for companies’ rapid liquidation – is essential for economic growth.

New Restructuring Procedures

The Bill offers a choice between four new restructuring procedures that have been clearly separated from the bankruptcy procedures, to avoid stigmatizing debtors who attempt to resolve temporary solvency issues. The four procedures vary both in terms of the potential benefits for debtors and the amount of control the courts and creditors have over the business. The general rule is that the greater the possible benefits for the debtors, the greater the amount of control granted to the court and creditors over the procedure and the conduct of business. The new restructuring framework is also supported by changes in the judicial system.

Amendments to Bankruptcy Law

The Bill not only provides for new restructuring regulations but also amends the existing bankruptcy law. One of the most important changes the Bill introduces would seem to be its new definition of insolvency, which constitutes a prerequisite for the declaration of bankruptcy.

According to this definition, an enterprise will be considered insolvent primarily when it loses the ability to fulfill its financial obligations (i.e., a liquidity test). Therefore, the new regulation connects the state of insolvency with a company’s economic inability to pay off its liabilities, rather than with the making of actual payments, as was the case before the new regulation.

The Bill leaves the assets vs. liabilities test in place, but amends and supplements its wording. Unlike the current rule (which states that a debtor is deemed insolvent when the sum of his obligations exceeds the value of his assets), under the Bill any future and contingent liabilities, as well as certain shareholders’ liabilities, will not be taken into account. In addition, a state of excessive indebtedness can only provide grounds for a declaration of bankruptcy if it lasts longer than 24 months. Nevertheless, even if the conditions are met, the court may still reject a bankruptcy petition, provided that there will be no threat to the debtor’s ability to perform its due and payable obligations in the short term.

Another of the Bill’s major amendments lies in the introduction of a new institution called prepared liquidation, also known as “pre-pack.” In this procedure, the bankruptcy petition may be accompanied by an application for approval of the terms of sale for a debtor’s enterprise, its organized part, or assets representing a major part of its enterprise. The application for approval of terms of sale must specify at least the sale price and potential purchaser and be accompanied by a valuation report prepared by a certified court expert.

The court will be obliged to accept the application if the offered price is higher than the estimated liquidation proceeds that could be raised in “standard” bankruptcy proceedings, less the estimated costs of the proceedings. If the offered price is lower than (but still close to) the estimated net liquidation proceeds, the court will still be in a position to approve the sale if it is supported by an “important social interest” or if it allows the distressed enterprise to be preserved.

Summary

The Bill will bring relief to distressed businesses by introducing new restructuring mechanisms and also by introducing a clear distinction between restructuring proceedings and (negatively perceived) bankruptcy proceedings. The to-date rarely-used restructuring procedures stipulated in the Polish bankruptcy law will be substituted with completely new regulations inspired by various European and US examples that have proven to be most effective, such as Chapter 11 in the USA, the English scheme of arrangements, and France’s sauvegarde.

The Bill will bring benefit to debtors and hopefully to the Polish economy as a whole. However, at the end of the day it is the creditors who will have to give a helping hand to their debtors by letting them restructure. The new regulation will require some concessions on their side, thereby creating additional risks that entrepreneurs will have to consider at every stage of their business activities.

By Pawel Halwa, Partner, and Martin Antczak, Attorney, Schoenherr Poland

This Article was originally published in Issue 2.6. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.