SWEDEN Law and Practice Contributed by: Niklas Sinander, Elin Carlsson, Axel Schelén and Björn Wendleby, Harvest Advokatbyrå
(SFS 2005:551)) shall acquire shares in the company or any parent company in the same group. This finan- cial assistance prohibition generally does not cover refinancings or security take-ups involving the target company and that are made some time (market stand- ard is somewhere between approximately 30 and 90 days) after the acquisition of the target company has been completed. 5.5 Other Restrictions Please see 4.2 Other Taxes, Duties, Charges or Tax Considerations . 5.6 Release of Typical Forms of Security Release mechanisms are generally governed by the relevant security agreement, together with a general release clause typically included in an intercreditor agreement. Intercreditor agreements governing the release of assets pledged under Swedish law gen- erally grant the security agent a discretionary power to release the relevant security, as automatic release clauses may negatively affect the perfection of the relevant security interest. Release of Security Over Monetary Claims Release clauses in relation to security over monetary claims – such as insurance proceeds, claims under material contracts and similar – usually require the security agent, on behalf of the lenders, to notify the relevant debtor of the security release. Release of Security Being Held in the Possession of the Pledgee Release clauses in relation to pledged assets that have been perfected by way of coming into the pos- session of the pledgee usually require that the pledgee return the relevant asset to the pledgor. This applies to (for instance) non-electronic business mortgage certificates, non-electronic property mortgage certifi- cates and share certificates. Release of Security Registered in a Certain Register Release clauses in relation to security that has been registered in a certain register usually require that a de-registration of such security interest be made in the relevant register. This applies (for instance) to electronic business mortgage certificates, electronic
property mortgage certificates, as well as shares and other securities registered with a securities depositary. 5.7 Rules Governing the Priority of Competing Security Interests Parties involved in a Swedish loan financing generally address competing security interests by way of enter- ing into a subordination agreement or an intercreditor agreement, in which a contractual priority between different lenders or groups of lenders may be created. Such agreements are generally based on LMA stand- ards. A duly perfected security interest in relation to a cer- tain asset will generally have priority ahead of other claims, such as third-party creditors or a bankruptcy receiver in the pledgor’s bankruptcy. However, statu- tory claw-back periods must be considered in this regard; see 7.1 Impact of Insolvency Processes . Reference should also made to 7.2 Waterfall of Pay- ments for an overview of the priority between credi- tors in the event of a bankruptcy. 5.8 Priming Liens Third-Party Security Interests In some cases, third-party security interests can be created by operation of law. A retention of title over certain goods and assets can result in a seller of such goods or asset having a better priority than a secured lender. A valid retention of title must (among other requirements) be created prior to the relevant goods or asset having been transferred. Also, if the buyer of the goods or assets is permit- ted to consume or sell the goods or assets, this may negatively affect the validity of the retention of title. Certain movable property remaining in the possession of the seller may have priority ahead of other creditors if the sale has been duly registered with the Swedish Enforcement Authority ( Kronofogdemyndigheten ).
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