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The Serbian Law on the Protection of Whistleblowers (the Whistleblower Law), applicable as of 5 June 2015, introduced rules governing the rights and obligations of both employers and employee whistleblowers; on the same date, the Ministry of Justice also adopted a bylaw to further regulate internal procedures regarding whistleblowers for all employers with more than 10 employees (the Bylaw).

The relevant internal act must contain the applicable internal procedures to be followed in case of whistleblowing, i.e. the rules on how information should be delivered to the employer; how an employer should act upon the receipt of such information; and the measures that the employer must undertake in order to (i) determine and eliminate the irregularities disclosed by such information, and (ii) protect the whistleblower from any adversity that could arise as a reaction to the whistleblowing involved.

The Whistleblower Law requires all employers with more than 10 employees to adopt, by 4 December 2015, an internal act to regulate internal procedures with respect to whistleblowing and to publish such act on the company’s bulletin board and web page.

Any company that fails to comply with these new rules may be fined by up to RSD 500,000 (approx. EUR 4,200), with the possibility of a fine of up to RSD 100,000 (approx. EUR 830) being imposed on the company’s official representative.

By Miroslav Stojanovic, Managing Partner, Nataša Lalovic, Partner, Bojana Bregovic, Partner, Wolf Theiss

Philip Smakowski has joined RKKW law office as Head of Tax.

Smalowski, who began his legal career in 1999, specializes in tax planning and corporate law services, consulting for investors, as well as working in the preparation and negotiation of commercial contracts. He represents clients in tax proceedings and control, and before civil and administrative courts. He will lead the Tax Department at RKKW, which also includes Partner Krzysztof Wrobel.

Legal Status

• Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms (“BRRD”) was implemented in Austria effective 1 January 2015, including write-down / conversion measures and the bail-in tool.
• The bail-in tool allows the resolution authority to apply write-down or conversion measures not only to liabilities under a capital instrument, but also to all other eligible liabilities. These also include liabilities under derivative transactions, as well as repurchase (repos) and securities lending transactions.
• Art 49 of BRRD contains a safeguard for derivatives that aims to prevent resolution authorities – when deciding on a potential bail-in – from “cherry picking” only those derivatives which are “out of the money” from the failing institution’s perspective. Art 49 BRRD requires that resolution authorities shall exercise the write-down and conversion powers in relation to a liability arising from a derivative only upon or after closing-out the derivatives. By doing so, the bail-in powers shall only be applied on the net sum resulting from closed-out derivatives. This way, the integrity of contractually agreed netting provisions shall be protected.
• This safeguard was implemented in Austria in § 91 of the Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz – BaSAG).
• From the black letter of the law, both Art 49 BRRD and § 91 BaSAG apply only to “derivatives” but do not specifically make reference to other types of financial contracts, such as repos or securities lending transactions.
• Both in the Austrian market, as well as in other Member States such as Germany, the Netherland and France, it has been a matter of dispute whether the bail-in protection in Art 49 BRRD / national implementation thereof (such as § 91 BaSAG) would apply to repos and securities lending transactions.

Confirmation of bail-in protection for repos and securities lending transactions

• The Austrian legislator has on 26 November 2015 published a new draft bill which contains a specific confirmation that the bail-in protection in § 91 BaSAG does indeed also apply to repos and securities lending transactions.
• The draft bill proposes that § 91 BaSAG be supplemented with a new paragraph stating that § 91 BaSAG also applies to “other financial contracts that are entered into under a framework contract containing a netting agreement. This applies in particular to transactions listed in § 20 (4) item 1 to 4 of the Austrian Insolvency Code (Insolvenzordnung – IO)”.
• § 20 (4) IO provides for Austria’s netting safe haven for derivatives and certain other financial contracts in case of insolvency proceedings. This protection of netting arrangements in insolvency also covers repos and securities lending transactions.
• The Austrian legislator has by way of the draft bill clarified what could by interpretation already be derived from Art 63(1)(k) BRRD and its Austrian law implementation in § 58 (1) item 11 BaSAG: According to these “general powers”, a resolution authority was already entitled to “close-out and terminate financial contracts or derivatives contracts for purposes of applying” the bail-in powers. 
• Fortunately, the Austrian legislator has nonetheless specifically confirmed that repos and securities lending transactions enjoy the same safeguard as derivatives under § 91 BaSAG.
• The bill needs yet to be passed in the Austrian Parliament. We will follow?up once the amendment to BaSAG has entered into force.

By Martin Ebner, Partner, Stefan Paulmayer, Attorney at Law, Schoenherr

Dentons real estate team has advised Fortis Nowy Stary Browar Sp. z o.o. on the sale of the Stary Browar Commerce, Art and Business Center in Poznan, Poland, to Deutsche Asset & Wealth Management, acting on behalf of its German fund grundbesitz europa. Hogan Lovells advised Deutsche Asset & Wealth Management. The transaction value is approximately EUR 290 million.

Stary Browar was created as part of the revitalization and development of the 19th century buildings of Hugger’s Brewery in Poznan. Prior to opening as a shopping center, Stary Browar (which means “old brewery”) was run for several years as an arts center, with an extension added in 2007. According to Dentons, “the inner-city shopping center has changed the face of the city offering, not only with numerous top-class attractions but also through changing Polwiejska street – connecting Stary Browar with Stary Rynek – into a popular promenade and one of the most expensive streets in Poland, as well as revitalizing the 4-hectare park which has become a favorite meeting place for Pozna? locals.”

“Stary Browar is a unique spot on the Polish cultural map,” said Pawel Debowski, Chairman of the European Real Estate Group. “We are pleased that Ms. Grazyna Kulczyk selected Dentons and our team to act as her legal counsel on this landmark transaction. “This was a fascinating project, requiring in-depth legal and local market knowledge on both the seller and vendor side. We are delighted that this successful completion has enabled Ms. Kulczyk to focus on fresh business initiatives.”

Close to 10 million visitors come to Stary Browar each year, according to the firm, and the center contains 220 shops, restaurants, bars, cafes, cinema auditoria, music clubs, offices, a medical center, and the Art Stations gallery and the office of the Art Stations Foundation by Grazyna Kulczyk. The complex also contains a sculpture park and a 5-star hotel. 

The property consists of 47,000 square meters of commercial premises, 4,750 square meters of office premises, 7,000 square meters of event, exhibition, and warehouse premises, and a parking lot. At present the largest tenants are H&M, Inditex Group, and LPP group, as well as some Polish designers. 

The Dentons team included Partner Pawel Debowski (Chairman of the firm’s European Real Estate Group), Partner Tomasz Stasiak, and Associate Iwona Huryn.

Editorial Note: After this article was published Hogan Lovells informed CEE Legal Matters that its team was managed by Partner Jolanta Nowakowska-Zimoch, working alongside Senior Associate Agata Jurek-Zbrojska. Senior Associate Agnieszka Badach-Sadlak supervised the project from the transactional side, and lawyer Katarzyna Bialek was responsible for all matters concerning regulations and corporate issues, as well as for the transaction finalization process. 

Nowakowska-Zimoch commented that: “We are honoured that we could support Deutsche Asset & Wealth Management on the acquisition of such a unique landmark as the Stary Browar in Pozna?; and were understandably pleased that Deutsche Asset & Wealth Management chose Hogan Lovells to be their legal advisor for this EUR 290 million transaction.”

Image Source: starybrowar5050.com

Schoenherr has advised the leading Austrian football club SK Rapid Wien (“Rapid”) and the crowd-investing platform CONDA on their crowd-investing Rapid InvesTOR project.

The project, which allows Rapid fans and other investors to participate in the financing of the football club’s new Allianz stadium in Vienna, is the first crowd-investing project with a simplified prospectus compiled according to Scheme F of the Austrian Capital Market Act (“KMG”). With an issue volume of up to EUR 3 million, Rapid InvesTOR is also the largest crowdfunding project to have been launched in Austria to date. 

The opening of the Allianz stadium — for which financing has already been secured independently of the crowd-investing project — is scheduled to take place in the summer of 2016.  

Through the website www.conda.at, fans of the football club and other crowdinvestors can make investments in the form of a subordinated loan in volumes starting from EUR 100. Depending on the term of the specific instrument they select to invest in, investors will be credited base interest rates of two to three percent per annum. In addition, bonus interest rate payments are possible, depending, inter alia, on Rapid’s sporting success in the international competitions organized by the Union of European Football Associations (UEFA).   

The Schoenherr team advising Rapid and CONDA consisted of Counsel Rita Wittmann and Attorney Hutan Rahmani.

The Dentons Real Estate team has advised LaSalle Investment Management on acquisition of Futura Park, a shopping center in Wroclaw, Poland — the first acquisition in Central Europe made on behalf of its Encore+ fund — from the IRUS European Retail Property Fund. Clifford Chance advised the IRUS Fund. The deal value is just over EUR 27 million.

Encore+ is a diversified, European real estate fund which has been successfully co-managed by LaSalle Investment Management and Aviva Investors for almost 10 years. 

The IRUS Fund is one of the largest private-capital pan-European retail property funds. It was raised in 2007 by NEINVER as a sector-specific fund focused on outlet centres. NEINVER is responsible for fund management, property acquisitions and disposals, and asset management. The IRUS Fund portfolio comprises a total of 11 outlet schemes, located throughout Spain, Portugal, Germany, Italy, and Poland.

Futura Park was built by Neinver Poland in 2008, and occupies 20,200 square meters of space, with a total of 1,200 parking places. According to Dentons, “it co-exists functionally and commercially with a neighboring outlet center and therefore the project required negotiating and setting various common arrangements for both centers, like management agreement, utilities’ delivery agreements, amongst others.” 

The Dentons team was led by Counsel Jakub Sobotkowski and Associate Anna Kokeli, both working under the supervision of Partner Piotr Szafarz.

The Clifford Chance team consisted of Partner Daniel Kopania, Counsel Bartosz Kaniasty, and Senior Associate Aleksandra Jach.

Image Source: futurapark.pl

Wardynski & Partners has advised a consortium of banks on the financing of PLN 185 million (approximately EUR 43.3 million) granted to the Work Service Group to be used both for refinancing of debt and for financing current activities of the company. Work Service was represented by Wroclaw-based law firm Wiewiorski in the deal.

The consortium of banks included BGZ Bank BNP Paribas, Bank Millennium, Bank Zachodni WBK, and Raiffeisen Bank Poland. 

Work Service — the largest provider of HR services on the Polish market — operates both in that country and 10 others: the Czech Republic, Slovakia, Russia, Germany, Turkey, Romania, Hungary, France, Belgium, Great Britain, and Switzerland. It is the first company providing personnel services to be listed on the Warsaw Stock Exchange.

The Wardynski & Partners team consisted of Partner Lukas Szegda, Legal Adviser Michal Kalicki, Lawyer Aleksandra Nalewajko, and Trainee Advocate Mateusz Tusznio. 

The Wiewiorski team representing the Work Service Group was led by Marcin Wojtasik, with Trainee Attorney Paulina Jeziorska “playing a key role,” according to the firm, alongside other lawyers from the Wiewiorski Banking & Finance Team. 

While Slaughter & May was global counsel to General Electric and Hogan Lovells was global counsel to Alstom on the former’s EUR 12.4 billion purchase of the latter’s power and grid businesses, a number of CEE firms and solo practitioners advised on local matters as well.

GE’s acquisition of Alstom’s energy business was finalized on November 2, 2015, and brings together two of the world’s biggest manufacturers of power plant hardware. The acquired businesses will be reorganized together with GE’s existing power generation business (GE Power & Water) as GE Power, headquartered in Schenectady, New York, USA. Of the EUR 12.35 billion sale price, EUR 9.7 billion was transferred to Alstom, with the remainder being reinvested by Alstom in GE/Alstom joint ventures, plus other corrections. Following the acquisition the remainder of the Alstom group refocused entirely on rail transport activities, and acquired GE Signalling. 

On behalf of General Electric, Tuca Zbarcea and Asociatii advised on the Romanian law aspects of the deal — consisting primarily, according to the firm, “in structuring, adjusting and implementing the necessary stages for takeover of target companies in Romania.” The firm’s team was led by Deputy Managing Partner Stefan Damian, who was supported by Managing Associate Horia Ispas, and Senior Associate Sergiu Cretu, among others.

PeliFilip represented Alstom on the deal in Romania, with a team consisting of Partner Monica Iancu and Senior Associate Eliza Baias.

In Croatia, lawyer Zrinka Knezic from the Porobija & Porobija law firm advised General Electric, while sole practitioner Tamara Musnjak-Spisic advised Alstom.

In Poland, Alstom was advised by a Hogan Lovells Warsaw team consisting of Partner Marek Wroniak and Associates Grzegorz Barszcz and Mateusz Mazurkiewicz.

In Turkey, Alstom was advised by Managing Partner Hikmet Kasaroglu and Associate Gulfem Erciyas from the Kasaroglu law firm.

Editor’s Note: After this article was published CEE Legal Matters learned that a Zepos & Yannopoulos team consisting of attorneys Takis Kakouris and Ioanna Poulakou advised GE on the acquisition in Greece, while a WKB Wiercinski Kwiecinski Baehr team consisting of Partners Ben Davey and Jacob Jedrzejak and Lawyer Adrian Michalak advised GE in Poland.

DLA Piper has advised the British company Crown Agents on a UAH 750 million (approximately EUR 30 million) agreement with the Ministry of Health of Ukraine (MOH) related to the procurement of medicines under a special, state-finance program.

The program is called “Support of healthcare measures under individual state programs and comprehensive measures of the programmatic nature (ECPCC 23014100).” Crown Agents was specified in Ukrainian procurement law as one of the organizations the Ministry of Health could engage for the state procurement of medicines and medical products under its approved programs.

The DLA Piper team supporting Crown Agents from the stage of initial negotiations up to the signing of the agreement was led by Legal Directors Alla Kozachenko and Illya Sverdlov, with support from Associate Tetyana Zamedyanskaya, all working under the supervision of Managing Partner and Head of Corporate and M&A, Margarita Karpenko.

Karpenko commented on the deal: “We are very happy to have helped Crown Agents sign such a milestone agreement and are confident that their knowledge of world-leading best practice will take procurement procedures in Ukraine to a new level.”

When contacted by CEE Legal Matters for more information, DLA Piper said it was unaware of other advisors to MOH on the transaction.

White & Case has advised a consortium of banks that included Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs International, Santander GBM and Societe Generale Corporate & Investment Banking on the issuance by PZU Finance AB (publ) of registered bonds of a total nominal value of EUR 350 million.

The Wistrand law firm provided Swedish advice to PZU Finance AB, with Allen & Overy advising the company on English and Polish matters.

According to White & Case, the bonds were issued on October 16, 2015 and bear interest at the fixed rate of 1.375 percent per annum. Interest on the bonds will be paid once a year and they will be redeemed on July 3, 2019. The bonds were listed on the regulated market of the Irish Stock Exchange on the basis of an issue prospectus approved by the Central Bank of Ireland. The bonds were assimilated with a previous bond issuance made by PZU Finance on July 3, 2014 and create a single series of bonds with a nominal value of EUR 500 million. White & Case also advised on the previous bond issuance.

The White & Case team advising on the transaction was led by Warsaw-based Partner Marcin Studniarek and included London-based Partner Doron Loewinger, Warsaw-based Associates Michal Petz and Magdalena Chalas and London-based Associate Catherine Andrews.

The Allen & Overy team advising PZU Finance consisted of Partner Piotr Lesinski and Senior Associate Lukasz Walczyna. 

The Wistrand team consisted of Partner Monica Petersson and Counsel Ulf Forsman.