SLOVENIA Law and Practice Contributed by: Vid Kobe and Peter Gorše, Schoenherr Slovenia
apply to LLCs. Rather, any transactions having ele- ments of financial assistance must be assessed from the perspective of capital maintenance and the group-of-companies rules ( koncernsko pravo ) (see 5.3 Downstream, Upstream and Cross-Stream Guaran- tees ). A permissible form of financial assistance, also appli- cable to JSCs, involves a merger between the tar- get company and the borrower that has pledged or offered to pledge the shares in the target as security for acquisition financing (in the form of a debt push- down). In such cases, protection of the interests of other stakeholders of the involved companies, such as creditors and employees, is ensured through a mechanism requiring the consent of the majority of creditors and employees for the merger to proceed. 5.5 Other Restrictions The most material restrictions in connection with the grant of guarantees and security in the context of (group) financing transactions are outlined in 5.3 Downstream, Upstream and Cross-Stream Guaran- tees and 5.4 Restrictions on the Target . Other relevant restrictions/limitations include: • issues/uncertainty regarding the “trust structures” typically involved in syndicated financing, as noted in 3.5 Agent and Trust Concepts – although it is market standard for parallel debt/joint and several creditorship provisions to be used in multi-lender constellations (with a view to facilitating a “security agency structure”), such structures lack definitive judicial precedent in Slovenia; • potential prohibitions or limitations on disposition with shares or assets (which are subject to transac- tion security) in the company’s articles of associa- tion; • equitable subordination rules in scenarios involving a lender that is also a shareholder of the borrower (including if it becomes such as a result of the transaction in question); and • claw-back rules within and outside the insolvency proceedings. If a workers’ council or a workers’ representative is established within a company, the company must
notify (and in certain cases, consult with) the respec- tive persons prior to “adopting a decision which could significantly impact (inter alia) the company’s com- mercial position, production organisation, or person- nel matters, or which would entail any corporate/ status changes with respect to the company”. While this is fact-contingent (and must be assessed on a case-by-case basis), the respective notification and consultation requirements are typically not triggered exclusively by a contemplated financing transaction. Costs related to a grant of security or guarantees in Slovenia typically comprise, in addition to legal fees, notarial costs, potential translation costs (notably where direct enforceability is agreed) and insignificant filing fees, and are generally not seen as a deterrent factor/limitation. 5.6 Release of Typical Forms of Security Formalities related to the release of security depend on the type of security established in a given case. From a legal perspective, the following applies (by way of simplification and in summary): • an accessory security (such as a pledge or surety- ship) automatically ceases to exist/is extinguished (by operation of law) upon full discharge of the secured obligations; • a non-accessory security (such as, by way of example, a fiduciary assignment of receivables and bank guarantees) may require a formal retransfer or similar act to “reverse” the establishment of security; and • in the case of a registrable security interest (eg, a mortgage, pledge over certain movables, or pledge over shares in an LLC) it is – notwithstanding the potential accessory nature of security – common to delete the relevant security from the registers, which requires certain additional steps (most nota- bly a formalised consent (deed of release) from the secured creditor/pledgee). In practical terms, the security is typically released by way of a (general) release agreement providing for: • the release of the obligors from any and all claims and liabilities under or in connection with the
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