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Greenberg Traurig has advised Alior Bank on its agreement to acquire Bank BPH’s core business from affiliates of GE Capital. The agreement was signed on March 31, 2016. Alior Bank has valued Bank BPH’s core business at PLN 1.5 billion. Completion of the transaction is subject to fulfillment of conditions precedent, including consent of the relevant antimonopoly authority and approvals and clearances of the PFSA. The transaction is expected to be completed by the end of 2016.

The transaction will be conducted by the acquisition of the shares in Bank BPH through a public tender offer followed by demerger of the core business of Bank BPH into Alior Bank. The transaction is to be financed by a rights issue of Alior Bank.

“This is the second transaction, after Meritum Bank, in which Greenberg Traurig is representing us,” said Wojciech Sobieraj, the President of the Management Board of Alior Bank. “We highly appreciate our cooperation with the law firm and its role in establishing the innovative structure of the acquisition of Bank BPH. This is just the beginning of our cooperation, the demerger of Bank BPH and the offering of Alior Bank shares are ahead of us.”

The Greenberg Traurig team is led by Senior Partner Lejb Fogelman, Partner Stephen Horvath from the London Office, and Partner Lukasz Pawlak.

Greenberg Traurig did not reply to an inquiry about counsel for GE Capital on the deal.

Amendments to the Austrian Code of Criminal Procedure bring substantial improvements to defendant’s rights, but also facilitate the public authorities’ access to confidential bank data.

We have prepared a series of Legal Insights to inform you about these amendments: (i) Part 1 – Amendments regarding the Attorney Client Privilege (published on 31 March); (ii) Part 2 – Improvements to Defendant’s Rights (published on 11 April); and (iii) Part 3 – New Rules regarding the prosecution authorities’ access to bank data (published on 14 April).

1. The Attorney-Client Privilege – A Fundamental Right

Art 6 sec 3 para c ECHR stipulates the fundamental right of every defendant charged with a criminal offence to defend himself in person or through legal assistance. An indispensable prerequisite to efficiently execute this right is to communicate openly and without restrictions with the attorney about a case. The ECHR constantly acknowledges this privileged relationship between an attorney and his client in its rulings.

In Austrian criminal law, this fundamental right is specified through art 157 sec 1 para 2 and art 157 sec 2 of the Austrian Code of Criminal Procedure (“ACCP”): All attorneys have the right to refuse to testify as witnesses about all information which was disclosed to them in their function as counsel to the defendant. Thus, the refusal right covers information that was disclosed to the attorney in his function as counsel to the defendant (i) by his client; (ii) by a third party; (iii) or in any other way. In order to avoid undermining this fundamental refusal right, art 144 and 157 sec 2 ACCP prohibits any kind of circumvention of this refusal right, eg by confiscating the attorney’s documentation, data storage measures and notes about the mandate or by questioning the attorney’s employees. Evidence obtained in violation of art 144 and 157 sec 2 ACCP is void by law.

2. Current Situation

Until now the Austrian Supreme Court argued that art 144 and 157 ACCP applies to attorneys (and other person subject to professional confidentiality) only. In other words, the defendant himself or third parties were not protected by art 144 and 157 sec 2 ACCP. Consequently, correspondence which was kept outside the attorney’s office or accommodation, for example in the defendants office or e-mail account could be searched, seized and confiscated by the prosecution authorities. As absurd as this may sound in the year 2016, this resulted in severe limitations of attorney-client communication ie, clients had to be advised to refrain from e-mailing their attorneys regarding criminal law advice or from keeping any opinions or memorandums in their office.

Even though this practice did not remain unchallenged, as notable scholars as well as the Austrian Bar Association repeatedly called for a better protection of attorney-client privileged information, the Supreme Court refused to change its line of argument. Now it will finally have to, as Austria has implemented the Directive 2013/48/EU on the right of access to a lawyer in criminal proceedings.

3. The Amended Provisions of the ACCP – Full Protection of Attorney Client privileged Communication

The new sec 157 of the ACCP, which enters into force on 1 November, 2016, now clearly stipulates that any documents or information disclosed (i) to the attorney by the defendant; or (ii) from the attorney to the defendant; (iii) for the purpose of obtaining or giving legal advice or developing a defense strategy may not be seized, regardless of whether the information is in the possession of the attorney or the defendant himself. In practice this means:

In the event of a house search the defendant (either a natural person or in case of charges against a corporate entity, the entity itself), may object to the seizure of privileged communication and request that all such communication is sealed and separately stored with the court.

As a next stop the court will order the defendant to specify and explain which documents are privileged. This statement and the sealed documents will then be reviewed by the court, which will decide which documents are privileged and must be returned to the defendant, and which documents may be reviewed by the public prosecution authority. This decision of the court can be appealed by the public prosecution authority as well as the defendant.

Given the narrow wording of the new provision and the great resistance of the Supreme Court and the prosecution authorities against the amendment, it remains to be seen how this provision will be handled in practice. The fear is that the new “right” will be interpreted as restrictively as possible, eg by a refusal to extend the protection (i) to information that was not prepared by the attorney himself but received from a third party, for instance a legal expert, and later handed over to the defendant and/or (ii) to information that is not in the hand of the defendant but a third party ie, his wife, colleague or business partner. This is a concern.

Please contact us for further details on these developments. We will be delighted to guide you through the new provisions and their implications for your attorney –client communications.

By Klara Jaros, Attorney at Law, Schoenherr

Vienna-based Alexey Amvrosov, until recently the Head of Legal of IBM Russia/CIS, took on the additional role of Lead Counsel (which, according to Amvrosov, is also called an “IBM Competence Area Leader”) for the IBM Global Business Services organization in Central and Eastern Europe.

IBM Global Business Services is the professional services division of IBM, including management and strategy consulting, systems integration, and application management services. It is the world’s leading and largest consulting organization. Its roots go almost 25 years back.

Amvrosov first joined IBM in March 2005 as a Senior Attorney for Central & Eastern Europe, Middle East, and Africa and was appointed to the role of Head of Legal for IBM Russia/CIS in July 2011. Before that he worked as a Senior Associate for Norton Rose, as an Associate with Noerr Stiefenhofer Lutz (now Noerr LLP). He started his legal career with Punder, Volhard, Weber & Axster (now Clifford Chance LLP) in Moscow. 

Amvrosov sat down with CEE Legal Matters in 2014 at IBM’s headquarters in Vienna to talk about his job at the time. Read the full interview here.

DLA Piper has advised HB Reavis on its sale of Vaci Corner Offices to a group of investors represented by Zeus Capital Management. CMS advised the buyer and Lakatos, Koves & Partners assisted UniCredit Bank in its financing of the deal.

The deal, which was announced on March 31, 2016, was described by HB Reavis as “the first major office transaction in the Hungarian real estate market in 2016, as well as a milestone in the successful business development of HB Reavis in Hungary.”

Completed in 2014, Vaci Corner Offices comprises of 21,150 square meters of office space. The building is BREEAM “Excellent” certified, and had “almost full occupancy” at the end of 2015. Tenants of Vaci Corner Offices include 3 subsidiaries of the MVM Group, as well as CRH Hungary, Sony Europe, Mylan, Intrum Justitia, and GlobeNet and Statlogics (both part of the Asseco Group). HB Reavis also relocated its own Hungarian headquarters to the building.

Commenting on the deal, Lila Pateraki, Director of Investments at Zeus Capital Management, said: “The acquisition of Vaci Corner Offices fits perfectly with the investment strategy of our newest investment platform targeting Central East and South East Europe. This is our first transaction in the Budapest market and we are pleased to have acquired one of the prime office buildings in the promising Vaci Corridor submarket. The property is ideally positioned to benefit from the real estate market’s upswing and we are confident it will perform exceptionally well for our investors.” 

“Vaci Corner Offices is a high quality office scheme, with a great tenant roster – both factors that contributed to a successful deal closing in record time,“ added Marian Herman, Chief Financial Officer of HB Reavis. “We are pleased, though not surprised, by the high levels of interest for Vaci Corner Offices, which came from both renowned international and domestic investors, and we are delighted to ultimately divest the building to Zeus Capital Management. We take pride that our building has attracted new foreign equity to the Budapest market and we anticipate an exciting year in the region. Looking forward, we plan to launch a 130,000 square meters project in Budapest, continuing this new chapter of major commercial real estate developments in our CEE portfolio.” 

From the financing side, Gabor Peto, Director of Real Estate Financing, UniCredit Bank Hungary, concluded: “We are glad to be partner in this transaction. When we enter into a project financing we always focus on long term sustainability. Vaci Corner Offices is secured by the excellent accessibility of the property, the diversified tenant mix, the environmentally responsible construction quality and the professionalism of the participants.”

The DLA Piper team advising HB Reavis consisted of Partner Gabor Borbely and Junior Associate Barbara Csaszar working on the financing side, with Senior Associate Szilard Kui taking the lead on real estate and transaction matters. 

On the buyer side, the CMS team was led by Partner and Head of Real Estate Gabor Czike, assisted by Senior Counsel Jozsel Varady and Lawyer Laszlo Jokay on the property side. Financing aspects of the deal were managed by CMS Partner and Head of Banking and Finance Erika Papp and Senior Counsel Csongor Tompa.

The LKT team advising Unicredit on real estate matters was led by Partner Attila Ungar, while Partner Szabolcs Mestyan’s team handled financing aspects. 

Image Source: vacicorneroffices.hu

AVS Law Office has advised on the recently built “Mixing Building” plant of Tigar Tyres doo — a Serbian subsidiary of the Michelin Group.

The new building, which covers 22,000 square meters and represents a total investment value of EUR 40 million (with equipment and machinery) became operational on March 24, 2016 and represents the last phase in an investment cycle of Tigar Tyres named “Big Tiger,” which amounts to a total value of EUR 215 million. The goal of the cycle was to increase production from 8 million tires per year to 12 million. 

The AVS Law Office team advising on the construction of the new building was led by Founder and Managing Partner Mirko Vasilic, assisted by Partner Milica Steljic. 

Hande Karakulah, the Turkey-based Head of Legal for Avon, has increased the geographical scope of her already-regional role, and has assumed the title of Legal Director TMEA (Turkey, Middle East, Africa).

Karakulah first joined Avon as its Head of Legal Turkey in December 2011. Her role took on a regional dimension in June 2015 when he became the Head of Legal Turkey & North Africa Middle East. Prior to joining the cosmetics company, she was a Legal Counsel in charge of commercial, operations, and compliance matters with British American Tobacco, a company that she joined in July 2007. Earlier still, she was a Partner with the ADMD Law Office.

Commenting on her appointment, Karakulah told CEE Legal Matters that she is “very happy to get the opportunity to learn and grow with the new expanded geography.”   

Egorov Puginsky Afanasiev & Partners has successfully defended the interests of Ecosoyuz LLC in the Chamber on Economic Disputes of the Russian Supreme Court in a dispute regarding a contract of vessel chartering.

The firm’s lawyers drafted a cassation appeal against lower court decisions which had denied Ecosoyuz’s attempts to recover rent of over RUB 122 million paid for winter storage of a floating crane required for cargo handling at the port of Sabetta, on the Yamal Peninsula.

According to EPAM, “loss of use of the vessel during the winter navigation period has occurred as a result of misconduct by the charterer: delayed return of the crane, non-compliance with the its operation rules, and ignoring the climatic conditions of the area of use.”

After reviewing EPAM’s appeal, the Judicial Chamber of the Russian Supreme Court cancelled all previous judicial decisions and sent the case for retrial.

The EPAM team representing Ecosoyuz was supervised by Partner Valery Eremenko, and consisted of Counsel Vera Rikhterman, Senior Associate Julia Bobrova, and Junior Associate Dmitry Mileshin.

Sorainen’s Belarus office has assisted the RE/MAX real estate company on the expansion of its real estate franchise to Belarus.

According to a Sorainen press release, the firm “provided full-scope advice on franchising regulation in Belarus, and supported [the] franchisee in registration of the agreement with the local patent authority.” In addition, the firm reported, “currently Sorainen’s team advises the client on the ongoing matters of franchise development in Belarus.”

The firm’s team in Belarus included Partner Maksim Salahub and Associate Nadezhda Fomenok.

Allen & Overy has advised the Riverside Company on its agreement to sell Budapest-based Diatron Group (Diatron) to STRATEC Biomedical AG of Germany.  

Baker & McKenzie advised Stratec on the transaction, which is expected to close soon. CMS Cameron McKenna advised UniCredit Bank on financing provided to the Diatron Group.

The Riverside Company is a global private equity firm focused on making control and non-control investments in growing businesses valued at up to EUR 400 million. Since its founding in 1988, Riverside has invested in more than 420 transactions. The firm’s international portfolio includes more than 80 companies. Riverside invested in Diatron — which develops, manufactures, and markets compact hematology analyzers for the human medical and veterinary markets — in late 2005, and according to a Riverside press release, it “worked extensively to grow the company organically, through new product development and via international expansion. Riverside also completed the add-on of MetroLab in 2008, delivering new products, capabilities and customers.”

“We’re proud of the work we’ve done to help Diatron thrive during our ownership,” said Riverside Partner Michael Weber. “Riverside supported Diatron to become a true global leader by adding clinical chemistry and reagents to its product offering, opening a U.S. subsidiary and receiving key FDA approval for several product groups, and earning a strong customer base.”

“Diatron was a good, specialized company that we helped to become bigger, more global and more capable,” said Riverside Senior Operating Partner Fabio Pesiri. “During our hold, Diatron centralized production into a cutting edge facility that incorporated lean processes and the latest technology. These, and other operational efforts, helped Diatron more than triple its turnover since Riverside’s acquisition.”

Working with Weber and Pesiri on the transaction for Riverside were Vice President Matthias Fink, Senior Associate Simon Joha, and Senior Legal Counsel, M&A and Tax Peter Parmentier. Balazs Tahy, strategic advisor, also, according to Riverside, “played a key role in the exit process.” 

The Baker & McKenzie team advising Stratec was jointly led by Budapest Partner Pal Takacs and Munich-based Partners Gerald Schumann and Marcus Meese. Other members of the team included Budapest-based Associate Erzebet Szalay, Luxembourg-based Partner Torsten Schmitt and Associate Nawal Sabsibo, and Munich-based Partners Benjamin Koch and Norbert Muckl.

The CMS team advising UniCredit Bank on what CMS describes as “a unique, cross-border, euro-based and highly complex dividend recap financing of Diatron Group,” which involved four jurisdictions: Hungary, Luxembourg, Switzerland, and the United States. CMS also advised UniCredit as outgoing bank with respect to the release under the refinancing. The firm’s team was led by Budapest-based Partner Erika Papp and Senior Counsel Csongor Tompa, assisted by London-based lawyer Linda Al Sallami and colleagues from other CMS offices, including Partner Vivian Walry and Junior Associate Julien Gerique in Luxembourg and Partner Stephan Werlen and Associates Dominique Gemperli and Daniel Burkhard in Switzerland.  

Image Source: diatron.com

Fort’s Tallinn office has advised EfTEN Kinnisvarafond II in its EUR 24 million acquisition of Talinn’s Magistral shopping center from Citycon. The Teder Law Firm advised Citycon on the deal.

The grocery-oriented Magistral shopping center is located in the Mustamae district of Tallinn — the city’s second largest, situated five kilometers from the city center. According to the Citycon website, the shopping center “offers a complete local service to its neighbourhood,” and attracts approximately 10,700 customers on weekdays and 8,700 on weekends.

The EfTEN Real Estate Fund II is mainly directed to institutional investors and following the acquisition of Magistral, the fund’s current volume of assets is over EUR 100 million.

Fort advised EfTEN “in all stages of the transaction, including conducting the legal due diligence,” and “advised our client in drafting and negotiating the acquisition documents and preparing the notice of concentration.” The firm’s team was led by Partner Minni-Triin Park, and included Partner Kuldar-Jaan Torokoff and Senior Associate Margus Koiva. In the past year Fort has also represented EfTEN Real Estate Fund III AS on its acquisition of the Saules Miestas Shopping Center in Lithuania (as reported by CEE Legal Matters on August 21, 2015) and its acquisition of the Ulonu Business Centre in Vilnius (as reported by CEE Legal Matters on January 11, 2016), as well as on EfTEN Kinnisvarafond AS’s acquisition of a B-class office building in Vilnius (as reported by CEE Legal Matters on December 14, 2015).

The Teder Law Firm team advising Citycon on the Magistral sale was led by Partner Pille Pettai.

Image Source: citycon.com