SLOVENIA Law and Practice Contributed by: Vid Kobe and Peter Gorše, Schoenherr Slovenia
notice to the debtor and pledgor, through an organ- ised market (eg, stock exchange) or, to the extent the shares are not publicly traded, through a public auc- tion. Due to a lack of (publicly available) practice and ambiguous wording of the law, it remains unsettled in practice as to what extent the shares may be sold via private (non-auction) sale – eg, on the basis of a prior appraisal of value by a competent expert. Movables Similar considerations to those for shares apply for enforcement over movables (business equipment and inventory) pledged by way of a non-possessory reg- istrable pledge. In addition to a pledge, a common security interest with respect to movables under Slovenian law rep- resents fiduciary transfer of title. In this context, the law (inter alia) provides for – by way of exemption to the general rule – the possibility of a secured creditor appropriating the movable assets, which is without prejudice to its right to an out-of-court sale. Real Estate As a general rule, mortgages over real estate are enforceable via court. By way of exemption, a mort- gage (established after 2016) may be enforceable by way of a quasi-private sale effected by a notary pub- lic, provided that certain conditions are met. These broadly include: • the mortgage agreement being concluded (i) in the form of a directly enforceable notarial deed and (ii) by and between certain eligible creditors (eg, a bank or other credit institution) and certain eligible borrowers (eg, a company classified as a small, medium-sized or large company); • the secured claim being due and payable; and • an absence of prior entries in the land register preventing the sale of the relevant real estate (eg, annotation of a dispute regarding the legal title or of a priority order for acquisition of legal title). IP Rights While an agreement on out-of-court enforcement of a pledge over IP rights is in principle possible, such enforcement might prove to be difficult because of a lack of established practice in this respect and/or of
established and widely accepted valuation methods for IP rights. Receivables A secured creditor holding a security over receivables may either enforce the assigned/pledged receivables or sell them out of court (subject to the foregoing). In the case of security over bank accounts, the banks may require certain additional steps (such as know- your-customer checks, a special power of attorney and a validly filled-out payment order) to be taken to comply with a secured creditor’s instructions regard- ing the enforcement of collateral. Some other notable points of interest on the topic of enforcement include the following. Direct Enforceability As noted in the foregoing, due to the general require- ment that an enforcement title must exist for court enforcement, the loan and/or security documents may be concluded or confirmed in the form of a directly enforceable notarial deed, facilitating court enforce- ment without the need to obtain prior judgment. Whether or not direct enforceability is agreed in a spe- cific transaction depends on commercial agreement, whereby translation costs and/or the number of par- ties to the relevant documents play a significant role. Right to Appropriation As a general rule, Slovenian law prohibits agreements between a security provider and secured creditor (concluded prior to maturity of secured obligations) based on which the creditor would be allowed to appropriate the assets constituting a transaction security in the event of default. By way of exemption, the secured lender’s right to appropriation is recog- nised and upheld by law in certain cases, most nota- bly in the case of: • financial collateral established pursuant to Directive 2002/47/EC of the European Parliament and of the Council on financial collateral arrangements; • fiduciary assignment of title (over movables); and/ or • bankruptcy proceedings where, in certain lim- ited scenarios (notably when the relevant collat- eral cannot be sold in the context of bankruptcy
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