DENMARK Law and Practice Contributed by: Morten Krogsgaard and Lennart Meyer Østenfjeld, Moalem Weitemeyer
• After closing, the acquisition vehicle grants security over the shares of the target. • The remaining security to be provided (eg, security granted over the shares and all the assets of each company within the acquired group) is entered into within an agreed time- frame from the closing date. 5.2 Form Requirements Security Interests in Acquisition Finance Transactions In acquisition finance transactions, the security interest is created under a pledge agreement or assignment agreement. These agreements govern various aspects, including the creation of the security interest, undertakings required to ensure the enforceability of the security and enforceability provisions. There are no specific form requirements, except in respect of perfec- tion. For more details see 5.3 Registration Pro- cess . Multiple Lenders In cases involving multiple (and changing) lend- ers, the concept of trust or parallel debt is not recognised. The security rights are therefore held individually by the lenders and managed by an agent in an “agent” capacity. The agent must name all parties they are acting for in case of enforcement. To mitigate these practical challenges, rules were introduced a decade ago allowing the appoint- ment of a security agent to act as both agent and representative ( fuldmægtig og repræsent- ant ). The security agent is entitled to exercise all rights and remedies under and in line with the agreement, either in its own name or in the name of any of the lenders. For these rules to apply, provisions to this effect must be included in the facility agreement or
intercreditor agreement that appoints the secu- rity agent. Mortgages Mortgages are created in the Danish Land Reg- ister ( Tingbogen ) and the Personal Property Register ( Personbogen ), which are national digi- tal registers and are maintained and operated by the Registration Court ( Tinglysningsretten ). Creation and signing Mortgages are created and signed online in the system using a mandatory form document, which allows limited ability for special provisions. Identification of movables Movables mortgaged individually must be identi- fied and described unambiguously in the mort- gage deed to be registered and enforceable. 5.3 Registration Process Process to Register or Perfect Security Interests in the Danish Market There is no general requirement (or possibility) to register security interests created over Danish assets or by a Danish obligor. However, there are certain perfection steps that need to be com- pleted. These are as follows: • shares: notice must be sent to the pledged company; • dematerialised shares: notice must be sent to the custodian bank; • bank accounts: notice must be sent to the account bank; • receivables (including rights under contracts and insurance policies): notice must be sent to the receivables debtor; and • mortgages over real property, movables (including Danish IPR), vehicles and floating charges: a mortgage deed must be created in the relevant register, which is subsequently
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