Rothenburg ob der Tauber, Germany

Asset Deal in a German GmbH: Notarised Shareholders’ Resolution Needed?

By Dr Angelika Baumhof and Christian Pflaeger, Jakoby Dr. Baumhof

On 08 January 2019, the German Federal High Court of Justice (II ZR 364/18) ruled that an agreement about the sale of all or substantially all of the assets of a GmbH requires a shareholders’ resolution of approval; however, this resolution does not need to be notarised. Meanwhile the need for notarisation is basically argued in two cases. The first is if the asset deal leads to a direct or indirect dilution of the shareholders’ participation in the company. In such a situation it is argued that a notarised resolution of approval to an asset deal is required due to the seriousness of such measures. This derives from the leading Holzmüller decision of the German Federal High Court of Justice concerning stock corporation law.

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Budapest, Hungary

Actio Pauliana can be Initiated even in the Case of a Division

By Dr Attila Kovacs, Kovács Réti Szegheõ Attorneys at Law

The European Court of Justice interpreted for the first time Articles 12 and 19 of the Sixth Directive 82/891 (1) in its judgement Nr. C 394/18. The Court held that those articles do not preclude creditors of the divided company whose rights arose prior to the division and who did not avail themselves of the credit protection arrangements provided for in the national legislation, in order to establish that this division is null and void. The dispute in the base proceedings is between the creditors of the company being divided and the newly created company to which part of the assets of that company has been transferred. Those creditors, considering that the divestment company had lost most of its assets as a result of the division, filed an actio pauliana seeking annulment of the divestment document. However, creditors did not avail themselves of the opportunity to object to the division, as required by national law when transposing the Sixth Directive.

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Chicago, USA

An Operational View of Collateral Audits

By James P. Martin, Cendrowski Corporate Advisors LLC

Traditional collateral audits tend to focus on financial results and analytics, which provide a point-in-time snapshot of the organisation. Trend analysis of the data might indicate how reported results have changed over time, but a more valuable perspective is explanation of why the business is performing the way it is, and how it will perform in the future; this requires an operational view.

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Graz, Austria

Enforcement of Foreign Arbitral Awards in Austria

By Mario Kapp and Eva Pany, KAPP & PARTNER Rechtsanwälte GmbH

Arbitration is becoming increasingly important. It is the rule rather than the exception for international disputes. The reasons for this are obvious; in addition to the frequently mentioned advantage of greater flexibility compared to state court proceedings, the possibility of appointing specialised arbitrators, the shorter duration of the procedure, and, above all, the international enforceability of arbitration awards, are essential factors in why businessmen decide to conclude arbitration agreements. Both domestic and foreign arbitral awards are enforceable in Austria and are not complicated. Still, legal assistance is advisable to avoid potentially costly errors.

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Zagreb, Croatia

Closing a Legal Entity in Croatia

By Biljana Svaljek, Infokorp

Some projects are only designed to last a few years. Usually, in Croatia, a legal entity is established in order for a project to run smoothly or to receive government incentives. Since the annual financial statements have to be submitted even when there were no transactions, entrepreneurs should close the company when it is no longer needed. There are two ways of closing a legal entity that do not include filing for bankruptcy: the regular liquidation process and the shortened cessation of business activity without liquidation.

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New York, USA

Second Circuit Holds Bankruptcy Code’s Avoidance Provisions Apply Extraterritorially

By Leslie A. Berkoff, Moritt Hock & Hamroff LLP

On 25 February 2019, the Second Circuit Court of Appeals issued a decision in the case of Picard, trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (“Madoff Securities”). The trustee alleged that Madoff Securities fraudulently transferred property to certain foreign feeder fund customers, who subsequently transferred it to other foreign entities. The trustee sought to recover these funds from the appellees, contending that the transfers were avoidable as fraudulent conveyances pursuant to §548(a)(1)(A) of the Bankruptcy Code, and that they should thus be recoverable under §550(a)(2).

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Rothenburg ob der Tauber, Germany

Highest Court Ruling Saves Costs for Shareholders’ Approval in a German Limited Liability Company (GmbH)

By Dr Angelika Baumhof and Christian Pflaeger, Jakoby Dr. Baumhof - Wirtschaftsprüfer Steuerberater Rechtsanwälte

For a long time, it was uncertain whether a notarised shareholders’ resolution of approval is required in the case of a German limited company (GmbH) selling all or substantially all of its assets. It was clear that a shareholders’ resolution of approval is required, but not its form. On 08 January 2019, the German Federal High Court of Justice (II ZR 364/18) ruled that the legal provision § 179a AktG (German Stock Corporation Act) does not apply by analogy to German limited companies (GmbHs). Section 179a AktG stipulates that the sale of the business of a German stock company requires a notarised resolution of the meeting of the stockholders with not less than a majority of three fourths, otherwise the transaction is null and void.

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industrial area, Linz, Austria

Liquidation Procedures in Austria

By Raffaela Lödl-Klein and Mario Kapp, KAPP & PARTNER Rechtsanwälte GmbH

In addition to founding a company, the dissolution of a company should also be considered. In Austria there are two main procedures used to liquidate an Austrian company:

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