SLOVENIA Law and Practice Contributed by: Markus Bruckmüller, Klemen Radosavljević and Matej Kraner, Wolf Theiss Attorneys-at-law
Bank Guarantee A bank assumes an obligation towards the recip- ient of a bank guarantee (the beneficiary) to fulfil a third party’s obligation if it is not fulfilled by the time it is due, provided that the conditions set out in the guarantee are met. The guarantee must be issued in writing. It can be an abstract/ independent guarantee, in which case the guar- antor is obligated to pay the beneficiary upon demand, regardless of its relationship with the debtor or whether the debt is overdue. There is a limited exception to this in the case of an unfair calling. 6.2 Restrictions See 5.4 Restrictions on Upstream Security and 5.6 Other Restrictions . 6.3 Requirement for Guarantee Fees A guarantee fee is not required under Sloveni- an law, but rather it is subject to an agreement between the parties, although it may be neces- sary to comply with the applicable capital main- tenance rules. Under the Companies Act, if a company is in financial distress, any shareholder loan granted to it is treated as an equity contribution in the event of subsequent bankruptcy or compulsory settle- ment proceedings (ie, an equity-replacing share- holder loan). These provisions apply to direct shareholders of limited liability companies and to shareholders of joint-stock companies whose voting rights exceed 25%. Repayment of an equi- ty-replacing shareholder loan is prohibited in the event of insolvency. There are similar rules regard- ing security interests provided by a shareholder to their company’s creditors while the company 7. Lender Liability 7.1 Equitable Subordination Rules
dure has been initiated, the parties, may agree that the real estate is sold through a bilateral agreement rather than in a public auction.
6. Guarantees 6.1 Types of Guarantees
Guarantees are commonly used as a form of security in the context of financing transactions. In Slovenia, there are two main types of guaran- tees: a surety ( poroštvo ) and a bank guarantee ( bančna garancija ), which is typically drafted as “unconditional or first demand” guarantee (ie, abstract (bank) guarantee). A bank guarantee is specifically regulated and provided for in the Obligations Act ( Zakon o obligacijskih razmerjih (ZOR)), whereby surety is regulated under the Obligations Code ( Obligacijski zakonik (OZ)). Surety In a suretyship agreement, the guarantor prom- ises the creditor that it will fulfil the debtor’s valid and outstanding obligations should the debtor fail to do so. There are two types of surety: ordi- nary (eg, the surety’s obligation is subordinate to that of the debtor) and “joint and several” (eg, surety is jointly and severally liable with the debtor). The basis of suretyship is an agreement. This may be a written agreement or a statute (law). In order to create a suretyship obligation, the guarantor must have full legal capacity and there must be a written suretyship agreement. The subject matter of a suretyship may be any type of obligation. Most often, suretyship is pro- vided for a monetary obligation. Primarily, sure- tyship is an accessory obligation. When the main obligation ceases, the suretyship obligation also ceases. The surety’s liability may not exceed that of the principal debtor.
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