BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
11. Activism 11.1 Shareholder Activism
tain outcome. The larger the damage (especially in a sizeable M&A transaction), the higher the likelihood of litigation, since the parties tend to accept the higher costs of those proceedings in such cases, yet, again, cases of M&A-related litigation in Bulgaria are very rare. 10.2 Stage of Deal Most litigations occur after closing. They are mainly connected with untrue representations and warranties, or with calculation of the price, in the cases in which adjustments may be applied. Potentially, a litigation is possible in case of breach of the pre-contractual obligations: in Bul - garia, parties (i) have the statutory obligation to conduct the negotiations in good faith, (ii) may enjoy exclusivity rights under a contract or (iii) may have their contractual non-disclosure right breached, yet given the complexity of the litiga - tion process these cases would be difficult to conduct. 10.3 “Broken-Deal” Disputes Only a few transactions failed due to the pan - demic and the lockdowns in Bulgaria in early 2020. Since such deal failures never became common, there are no notable lessons to be learned with regard to “broken deal” disputes in this period.
In Bulgaria, shareholder activism is not common. When it exists, it is focused on the selection of subcontractors of the company, related parties’ agreements, conflicts of interest of the managing bodies, protection of consumer rights and social responsibility. 11.2 Aims of Activists Activists may encourage a company to enter M&A transactions, if that will make the company more socially responsible. 11.3 Interference With Completion Shareholder activists may seek to interfere with the completion of announced transactions in Bulgaria, if this will help them to achieve their goals.
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