schoenherr in europe 5th cis local counsel forum | minsk where are the distressed assets? –talk...
TRANSCRIPT
schoenherr in europe
5th CIS Local Counsel Forum | Minsk
Where are the distressed assets?
– Talk to banks/leasing companies or search by industries (eg everyone in real estate development or household appliances is more or less distressed)
What to do when we find them?
– If operational business is profitable, negotiate a substantial haircut with the banks and buy it - this brings you again to the banks...
flip answer
Which industry sectors are said to provide the most opportunities for distressed investors in 2010?
closer look
Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010
5th CIS Local Counsel Forum | Minsk
Which European countries are said to produce the greatest opportunities for distressed investors in 2010?
closer look cont‘ed
Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010
5th CIS Local Counsel Forum | Minsk
Have European restructurings reached their peak already?
restructurings
Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010
5th CIS Local Counsel Forum | Minsk
What are the greatest challenges to achieving restructuring?
restructurings cont‘ed
Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010
5th CIS Local Counsel Forum | Minsk
What forms of financial restructurings are said to be the most prevalent in 2010?
restructurings cont‘ed
Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010
5th CIS Local Counsel Forum | Minsk
5th CIS Local Counsel Forum | Minsk
Pros
Exclusivity agreement possible Preservation of existing contracts
(supply/customer agreements, licensing agreements, lease agreements etc)
No negative impact on the market/ customers
Time
Cons
Assumption of liabilities by the acquirer
No privileged reorganisation measures (termination of contracts and employees)
Risk of unlimited assumption of unknown liabilities (Due Diligence)
Risk of challenge of transactions Seller´s liability risks Price
Acquisition prior to insolvency
austrian case studyacquisition of businesses prior to or after their insolvency?
5th CIS Local Counsel Forum | Minsk
Pros
Limitation/exclusion of acquirer‘s liability
Privileged restructuring measures with respect to existing contracts and employees
Risk of assumption of unknown liabilities excluded or limited
No risk of challenge of transactions Price
Cons
Lack of exclusivity (sale to the best bidder)
Additional players (insolvency courts, insolvency administrator/ liquidator, creditors)
Loss of essential contracts possible (termination rights)
Loss of key employees Negative market impact Costs of insolvency proceedings Time
Acquisition following opening of insolvency proceedings
austrian case studyacquisition of businesses prior to or after their insolvency?
5th CIS Local Counsel Forum | Minsk
Subject to applicable procedural law acquisition of a business subject to insolvency proceedings may be subject to challenge/invalidation if the sale of the business is disadvantageous for the businesses‘ creditors
Mitigation of challenge/invalidation risks:
- Expert opinion on valuation of business
- Lapse of procedural remedies for challenge (subject to applicable procedural law)
- Establishment of a restructuring concept by the purchaser
- Trustee/escrow structure
austrian case studyacquisition of businesses prior to or after their insolvency?
5th CIS Local Counsel Forum | Minsk
When are directors of the borrower under the obligation to file for insolvency?
2.Establishing a strategy for restructuring
Austria
- borrower’s directors must file for bankruptcy without undue delay upon insolvency (=illiquidity or over-indebtedness), but within 60 days at the latest
- borrower’s directors may file a restructuring plan, including a status (assets/liabilities) and finance plan (stating how the next 90 days of the going concern and the settlement of preferential claims will be achieved) and apply for restructuring proceedings
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austrian case studyacquisition of businesses prior to or after their insolvency?
5th CIS Local Counsel Forum | Minsk
contact information
Gudrun StanglManaging Partner (Bratislava)
T (Vienna): +43 1 534 37 267
T (Bratislava): +421 2 571 007 21
Thank you!
5th CIS Local Counsel Forum | Minsk
Legal advisor to Ernst & Young
Advising the Administrators (Ernst & Young) of the Nortel Networks on its world wide
restructuring and the administration of its European
entities in Austria, Czech Republic, Slovakia, Poland,
Romania and Ukraine.
Telecom 2009
Merger of Immofinanz with Immoeast
EUR 8 billion
Legal advisor to Immofinanz
Real Estate 2010
Sale/Nationalisation of Kommunalkredit Bank AG to
Republic of Austria
Legla advisor to Volksbanken AG
Banking 2008
highlight deals
5th CIS Local Counsel Forum | Minsk
Sale by Immofinanz of WIPARK GmbH
Legal Advisor to Immofinanz
Real Estate 2009
Legal advisor to ÖVAG
Banking 2009/10
Acquisition of distressed Eybl Austria and its
subsidiaries in Slovakia and Romania
Legal advisor to Prevent DEV GmbH
Automotive 2009
Sale of ÖVAG’s participation in Volksbank Wien AG,
Ärztebank AG and Immobank AG
EUR 210 million
highlight deals