Worldwide: EuroResource—Deals And Debt, March 2015

Last Updated: April 8 2015
Article by Corinne Ball

Recent Developments

Germany—On 6 March 2015, Germany passed a law that requires some of Europe's biggest companies to give 30 percent of seats on supervisory boards to women beginning on 1 January 2016. Currently, fewer than 20 percent of the seats on German corporate boards are occupied by women. In passing the law, Germany joined a European trend to legislate a much greater role for women in boardrooms. Norway was the first European nation to legislate boardroom quotas. It has since been joined by Spain, France and Iceland, all of which set their minimums at 40 percent. Italy has a quota of one-third, Belgium of 30 percent and the Netherlands a 30 percent target (albeit nonbinding). Britain has not enacted boardroom quotas into law, but a voluntary initiative (known as the 30% Club) has helped to substantially increase women's representation in boardrooms. In the United States, women's representation has grown slightly—up to 17 percent of board seats—without legislative mandates, although growth has been extremely slow.

Under the new law, approximately 100 of Germany's best-known companies must give 30 percent of their supervisory board seats to women beginning in 2016. The 30 percent mandatory quota applies to German companies listed on a regulated market (regardless of where they are listed) if they are subject to Germany's workers' parity co-participation regime, which generally applies to companies with at least 2,000 employees. Additionally, approximately 3,500 companies have a deadline of 30 September 2015 to submit plans to increase the share of women in boardroom positions (supervisory board and management board) and the two management levels below director level. In this respect, companies will be affected if they are either listed on a regulated market or are subject to Germany's workers' participation regime, which generally applies to companies with at least 500 employees.

The Netherlands—On 13 March 2015, the Dutch Supreme Court clarified the extent to which individual partners of a partnership are liable for partnership obligations. In its ruling (in Dutch), the Supreme Court concluded that each of the partners of a partnership (other than a limited partnership) are jointly and severally liable for all obligations of the partnership. The Supreme Court made no distinction between founding partners and those who subsequently join the partnership. This rule creates risk for partners who join the partnership after it was founded, as they will be held jointly and severally liable for debts that came into existence before they joined the partnership. The Supreme Court reasoned that Dutch law does not contain any restriction on the liabilities of partners in a general partnership for partnership debts. The lack of any such restriction, the court explained, offers creditors extra protection. By extension, the lack of any restriction on liability should also apply to new partners. Finally, the Supreme Court provided guidance for prospective partners. They should: (i) consider obtaining a guarantee from existing partners with respect to existing debt, (ii) reach an agreement with existing partners on an appropriate allocation of liability among all partners for existing debts; and (iii) obtain disclosure of all available financial information on the partnership prior to entering the partnership.

In a previous ruling handed down on 6 February 2015 and reported in the February 2015 issue of EuroResource, the Supreme Court held that the bankruptcy of a Dutch partnership no longer entails the bankruptcy of its partners as a matter of law. Instead, the Supreme Court explained, if a partnership is deemed bankrupt because it is insolvent (i.e., unable to pay its debts as such debts mature), insolvency proceedings with respect to individual partners should be commenced only if the individual partners are also insolvent.

Global—Argentina's economy minister announced on 3 March 2015 that "me-too" holdout bondholders who are seeking compensation for debt owed by Argentina since the country's 2002 default have lodged claims with the US District Court for the Southern District of New York for between US$7 billion and US$8 billion in the hope of gaining from Argentina's ongoing legal battle with hedge fund holdout bondholders. US District Judge Thomas Griesa said that he would deal with claims filed by 2 March 2015 on the same schedule as those of the hedge funds.

On 12 March 2015, Judge Griesa denied a request by Citibank N.A. ("Citibank") to vacate his 28 July 2014 order prohibiting Citibank from processing payments on certain Argentine law bonds. Citibank had argued that the bonds, which are denominated in US dollars but governed by local Argentine law, do not constitute "external indebtedness" and therefore should not be subject to the court's injunctions. In his opinion, Judge Griesa wrote that "the operative paragraphs of the Injunction do not speak in terms of 'external indebtedness,' and as a result, Citibank's participation in making payments on exchange bonds is prohibited". According to the judge, the "Injunction prohibits participants in the payment process from assisting the Republic in making payments on exchange bonds". 

In a 13 March 2015 response to Judge Griesa's 12 March 2015 ruling regarding future interest payments on the Argentine law bonds, Argentina's Minister of Economy Axel Kicillof stated that the order violates basic legal principles and that Judge Griesa's decisions "are not based on law" but reflect an "apparent bias against Argentina". The statement was posted as counsel to the holdout bondholders responded to a 12 March 2015 letter from Citibank seeking a stay of the ruling. 

On 16 March 2015, Judge Griesa denied Citibank's request for a stay of his 12 March 2015 ruling blocking the bank from processing US$2.3 billion in bond payments for the government of Argentina. Later that day, Citibank announced that its Argentine branch will exit the custody business following threats from the Argentine government. According to Citibank, it has been subject to repeated threats that the government of Argentina would revoke its operating license and bring civil and criminal charges if Citibank fails to pay holders of Argentine law exchange bonds.

On 20 March 2015, however, Judge Griesa approved a stipulation between Argentina's holdout bondholders and Citibank that conditionally authorises Citibank's Argentine branch to make interest payments scheduled for 31 March and 30 June 2015 on US$2.3 billion in Argentine law bonds. The judge also authorized Citibank to exit its custody business in Argentina.

Argentina's local market regulator, the Comision Nacional de Valores ("CNV"), implemented a temporary ban on Citibank Argentina's capital markets activity on 27 March 2015 as CNV reviews the deal Citibank reached with holdout bondholders regarding the 31 March 2015 coupon payment. Under the terms of Resolution 17,634, Citibank has been suspended from trading in the local capital markets and Caja de Valores has been appointed to replace Citibank Argentina as custodian for Argentine bond transactions. The suspension and other actions taken by the CNV do not affect Citibank's retail business in Argentina.


Jones Day advised XiO Group, an alternative investment fund based in London, Hong Kong and Shanghai, in connection with the fund's inaugural investment in the secondary leveraged buyout from Triton Partners of the COMPO EXPERT business, a leading supplier of specialty fertilizer products for professional applications. COMPO is the European market leader in high-quality specialty home and garden products. The COMPO EXPERT business is carved out of the COMPO group and consists of companies based in 18 jurisdictions, with two principal production sites in Germany and Spain as well as one logistical site in Belgium. Jones Day also advised on the financing and on the establishment of the Cayman, Dutch and German-based holding and acquisition vehicles.

Jones Day advised The Procter & Gamble Company in connection with its sale of the Rochas brand to Inter Parfums, Inc. Founded in 1925 as a fashion house that expanded into perfumery in the 1950s under the direction of Hélène Rochas, Rochas is both a high-end fragrance line and respected fashion house in Paris. The acquisition will be completed for an aggregate purchase price of US$108 million plus inventory.

Jones Day advised NEP Group, Inc, a US-based leading remote production, studio production, video display and host broadcasting company, in connection with its intended acquisition of the Mediatec Group. Mediatec is one of Europe's largest corporations in delivering integrated technical solutions for event and television productions, with activities across Europe (including Sweden, Finland, Norway, Denmark, Germany, Switzerland, Austria, the UK and Spain).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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