Kirkland & Ellis represented Croatian food and retail group Agrokor d.d. ("Agrokor") in the successful completion of its groundbreaking two-year restructuring process. With the implementation of the creditor settlement on April 1, 2019, the new holding company Fortenova Group took over the operative parts of Agrokor, which are now controlled by the former creditors as new shareholders. The former parent company will be wound up together with the remaining subsidiaries in due course.
With a debt volume of approximately €6 billion, Agrokor's restructuring was the largest in Europe in 2017/18. With a significant share of Croatia's gross domestic product, Agrokor and its subsidiaries employ more than 53,000 people in 20 countries. As a major employer and food producer/supplier/retailer, Agrokor's resolution was of critical importance to the CEE economy. The Croatian government passed an emergency law (the "Law on Extraordinary Administration Proceedings for Companies of Systemic Importance") in order to address the scale and complexity of the situation.
Agrokor's restructuring plan under the new law is the first of its kind. It may form a precedent for laws on the reorganization of systemically important companies in other countries.
Kirkland advised on all aspects of the restructuring, which involved raising new money and a complex debt for equity swap under an unprecedented insolvency regime. This included a super-senior debtor-in-possession financing, the preparation of a settlement plan (which included a debt for equity swap of creditor claims against more than 30 group companies and the transfer of the group's business to a new structure), and the transfer of the debtor-in-possession financing into the Fortenova Group by means of an English law scheme of arrangement.
In England and Wales, Kirkland obtained full recognition of the Croatian proceedings under the Cross-Border Insolvency Regulations 2006 (in the first contested application of its kind), and in the U.S., recognition and enforcement of the Croatian proceedings and restructuring agreement under Chapter 15. These cases addressed several issues at the forefront of international insolvency law and foreign recognition jurisprudence.
The largest creditors of Agrokor include the Russian Sberbank and certain U.S. funds, followed by the Russian VTB Bank and BNP Paribas.
The Kirkland team was led by: Leo Plank, Wolfram Prusko, Kon Asimacopoulos, Partha Kar, Elaine Nolan, Adam Paul, Brad Weiland, Marlene Ruf, Josef Parzinger, Hannah Crawford, Abigail Pidgen, Ben Ward and Daniel Rudewicz (restructuring); Ashley Young and Karen Ford (debt finance); William Burke, Tim Volkheimer and Achim Herfs (capital markets); Sarah Jordan, Matthew Sinclair-Thomson, Jordan Goater and James Parkinson (antitrust & competition); and Sarah Klein, Marcus Thompson and Michael S. Casey (government, regulatory & internal investigations).