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.
Noteworthy
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).
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