act legal Romania assisted Louis Delhaize in the sale of Cora Romania to Carrefour following Competition Council’s clearance

act Botezatu Estrade Partners (act legal Romania) assisted Louis Delhaize in the sale of Cora Romania to Carrefour following clearance by the Competition Council. The transaction, initially subject to approval by the Competition Authorities, has now received the green light, allowing all parties involved to raise a glass of champagne in celebration of the successful completion of this deal.

The act legal Romania team was led by M&A Partner Laura Estrade, Real Estate Partner Mihaela Poșircă, and Competition Partner Stefan Botezatu, with strong involvement and full dedication of Counsel Iustina Sima, Managing Associate Ruxandra Liștea, Senior Associate Andrei Petre, and Associate Lorena Samoilă.

“I had full confidence that act legal Romania team would successfully drive this deal to completion. After working together for such a long time, we couldn’t have expected any other outcome. ‘Forward-thinking’ is not just a strapline for them; it’s their essence. Thank you, everyone!” stated Olivier André, General Counsel of Louis Delhaize Group.

“I’ve heard a joke that said “Why did the lawyer’s computer go to therapy after closing a deal? Because it had too many attachment issues!” – while we’re not sending laptops to therapy, we have been genuinely attached to this deal, or more accurately, to our client. Our longstanding cooperation and the successful completion of this landmark transaction are things we’re extremely proud of!” shared Stefan Botezatu, Managing Partner.

About the transaction

Cora Romania, owned by the Louis Delhaize Group, comprises 10 hypermarkets, 9 cora Urban stores, and employs over 2,010 professionals. This sale represents a noteworthy development within the Romanian food retail landscape.

Louis Delhaize’s exit from the Romanian market follows the sale and leaseback of seven Cora commercial centers in late 2021 and early 2022, transactions by which Cora sold its real estate properties and continued as tenant. act legal Romania, as the longstanding legal counsel to Louis Delhaize for Romania, provided its assistance in all these strategic transactions.

About act Botezatu Estrade Partners (act legal Romania)

act legal Romania is the local office of act legal, an international law firm with a presence in 11 European capitals. act legal is a one-stop shop, providing a full range of cross-border legal services to companies and investors who intend to enter the continental European markets or are already present in the region.

For more updates on the firm’s activity, you can follow its LinkedIn page.

Updated – Price capping and ongoing agreements in the context of Coronavirus Pandemic

What’s new? – The Presidential Decree No. 240/2020 no longer provides for price capping at the average prices of the three months prior to 16 March 2020. Additionally, in the event of a decrease in the prices of electricity and natural gas, on the regional markets, the Decree provides that the Government will take the necessary measures so that such decrease will be partially or fully reflected in the final price to consumers. However, Parliament Decision No. 4/2020 provides that the restriction of certain rights or freedoms can be ordered only by acts having the force of law.

What is maintained? The possibility of capped prices during the prolongation of the state of emergency for public utility services such as electricity and heat, gas, water, sanitation and fuels is maintained, along with all the measures adopted to enforce the first decree, unless the Presidential Decree no. 240/2020 provides otherwise.

Which price will be applied? Unless other capped prices or tariffs are regulated by the Government, the capped prices at the level existing on 29 March 2020 shall be applied, as provided by the Military Ordinance no. 4/2020.

What’s next? The provisions of the Presidential Decree are very likely to give rise to uncertainty and debate with respect to the capping of the final prices to consumers. It is unclear how the Government will interpret the concept of “regional markets (it should be regarded as referring to EU regional markets only ?) and which measures the Government will take in order to ensure a reflection of the decrease in prices on the regional markets in the final price.

Uncertainty also persists as to how the Government will be able to adopt the restriction of rights; it cannot be excluded that the Parliament intended for the Government to be able to adopt the restrictions only by means of GEO, not by Military Ordinance. In this case, any measures adopted by the Government may be subject to further amendments by the Parliament.

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Article posted on April 4, 2020:

What’s new? Capped prices for electricity and heat, gas, water, sanitation and fuels from 29 March 2020 until the end of the state of emergency. The capping means in this case that the prices cannot increase above the level existing on 29 March 2020, but they can decrease according to supply and demand. This measure was taken through Military Ordinance no. 4/2020.

Who’s affected? The Ordinance does not differentiate with regard to whom the capping measures will apply, meaning that all prices are capped. Therefore, the measure may be applied to producers, distributors, suppliers and end customers. This leads to a certain degree of confusion, since prices in energy are mostly formed on centralized markets such as the Day-Ahead Market (PZU), OPCOM, commodity exchanges, etc.

Which price will be applied? There are inconsistencies between the price caps established under Decree No. 195/2020 and the Military Ordinance. The possibility of price capping for certain goods and/or services was first introduced through presidential Decree No. 195/2020 for declaring the state of emergency in Romania on 16 March 2020. The decree considers the average prices for the three months prior to 16 March 2020. The price capping under the Military Ordinance considers the price levels applicable on the day of the Ordinance – 29 March 2020.

What’s next? The provisions of the Military Ordinance are very likely to give rise to uncertainty and debate with respect to the capping of the prices, since they stray from the provisions of the Presidential Decree for declaring state of emergency.

Price capping and ongoing agreements in the context of Coronavirus Pandemic

What’s new? Capped prices for electricity and heat, gas, water, sanitation and fuels from 29 March 2020 until the end of the state of emergency. The capping means in this case that the prices cannot increase above the level existing on 29 March 2020, but they can decrease according to supply and demand. This measure was taken through Military Ordinance no. 4/2020. </p>

Who’s affected? The Ordinance does not differentiate with regard to whom the capping measures will apply, meaning that all prices are capped. Therefore, the measure may be applied to producers, distributors, suppliers and end customers. This leads to a certain degree of confusion, since prices in energy are mostly formed on centralized markets such as the Day-Ahead Market (PZU), OPCOM, commodity exchanges, etc.

Which price will be applied? There are inconsistencies between the price caps established under Decree No. 195/2020 and the Military Ordinance. The possibility of price capping for certain goods and/or services was first introduced through presidential Decree No. 195/2020 for declaring the state of emergency in Romania on 16 March 2020. The decree considers the average prices for the three months prior to 16 March 2020. The price capping under the Military Ordinance considers the price levels applicable on the day of the Ordinance – 29 March 2020.

What’s next? The provisions of the Military Ordinance are very likely to give rise to uncertainty and debate with respect to the capping of the prices, since they stray from the provisions of the Presidential Decree for declaring state of emergency.

Process-related deadline calculation according to the 2nd COVID Act dated March, 22nd 2020

On March 20th 2020, Parliament passed the ‘2nd COVID Act‘, which contains, among other things, rules on the interruption of procedural deadlines. The law came into force on March 22nd 2020 and will expire at the end of December 31st 2020.

In judicial civil proceedings, all procedural deadlines are interrupted until the end of April 30th 2020 if the event triggering the deadline falls on or after March 22nd 2020 or if the deadline has not yet expired on March 22nd 2020. The relevant period shall start to run anew on May 1st 2020.

However, the court may declare in the respective proceedings that a period is not interrupted for the aforementioned duration. In such a case, the court shall at the same time fix a new appropriate period. This decision may not be appealed against. The interruption of the time limit shall not apply to proceedings in which the court decides on the legality of an upright deprivation of liberty under the Housing Act, the Home Residence Act, the Tuberculosis Act or the Epidemics Act, nor to time limits for performance.

COVID-19 – Decisions based on proper factual basis

The rapidly expanding Corona-19 pandemic puts significant pressure on companies of all sizes in each segment. Entrepreneurs, managing directors and board members have to make far-reaching decisions in the shortest possible time with considerable uncertainty about forecasting in a situation that has hitherto been completely unknown. It is clear that many decisions will not have the desired success; some will do even more harm than good in hindsight.

This also raises the question of civil or even criminal liability risks for decision-makers.

Now and in the upcoming months, many entrepreneurs and board members will have to make many atypical risk decisions. The object of their actions is not the ordinary course of business activity, which, in addition to new opportunities, also entails known and unknown risks. What is needed is action to reduce risks arising from a sudden and dynamic change in the business environment that is hardly predictable. The cushioning of these risks may require measures that were unthinkable a few days ago – from the termination of a transaction to the deferred investment to the temporary closure of plants or the application for state aid.

Business leaders operate in a black box in crisis management as well as politicians: whether the drastic measures are ultimately necessary and successful will only tell the future – but action must be taken now. Unlike politics, managers and entrepreneurs carry a significant personal liability risk. If they are wrong, they threaten not only existential consequences for the company, but also personal reputation and, at worst, loss of office, as well as tangible legal consequences.

As a result, corporate leaders find themselves in a dilemma where both options for action – immediate action and further waiting – are risky, and in which any decision made can prove to be wrong in retrospect. It would therefore be highly unfair to make the occurrence of legal consequences dependent on the outcome of the decision. In order to prevent this, the German corporate (§ 93 German Stock Corporation Act) and case law limits the risks of liability. A breach of due diligence is only due to “totally unacceptable action“.  For example, if the error is already obvious to an outsider, as in the case of insufficient collection and evaluation of information prior to a decision.

It is necessary, but also sufficient, for management to establish an ‘appropriate factual basis’ in the specific situation and for the decision-makers to assume this ‘reasonably‘ at the time of the decision. It does not matter whether a subsequent review concludes that the decision was in fact based on appropriate information or was to the benefit of the company.

These criteria, which are admittedly soft, give decision-makers in companies what they need most now: a sufficiently broad basis for decision-making.

We are happy to support you. Please contact us.

Corona crisis – “Don’t panic!” Correct customer communication in the financial sector

What exactly is the problem?

Crises that affect the capital markets have always led to short-circuit reactions among investors. Since stock exchanges have theoretically processed every piece of information the moment it ceases to be insider information, reactive action on the capital market is usually too late.

The usual advice in stock market crises such as those triggered by the current corona crisis is therefore always the same: “Don’t panic!” Consequently, private wealth managers usually advise their clients to be patient and prudent in times of crisis. This advice is correct, but there are numerous legal stumbling blocks that you should avoid when communicating with your clients and choosing your course of action.

What do you need to do now?

Carefully review your clients’ portfolios in light of the current situation on the capital market, taking into account various future scenarios. Pay particular attention to compliance with agreed investment limits, loss thresholds, investment guidelines and customer wishes. If you identify a need for action, do not act against your own advice: “Don’t panic!”, so this also applies to you.

Choose your communication with your clients carefully. Obtain instructions from your customers if necessary.

If there are several options for action, make your choice carefully and document it in detail.

What are the risks for you?

In investor protection processes, investors always bring up the same arguments again and again when investments prove to be loss-making in retrospect:

  • “I did not understand the product, but blindly trusted my advisor’s advice”
  • “If I had known that my investment strategy would have this effect, I would have chosen another”
  • “I only chose this investment strategy because my advisor told me that it had to be designed in this way for efficient advice”
  • “My counselor advised me to do this”
  • “Despite the crisis, my advisor has not carefully informed me of its possible consequences”

The result is not only lengthy and therefore costly investor protection proceedings, which are usually conducted through several courts and therefore over many years. In the worst case scenario, clients may also claim damages, as a result of which they would ultimately have to pay for the losses caused by the Corona crisis.

What other risks exist?

There are also considerable regulatory risks in the medium and long term.

Particularly after the subprime crisis in the years from 2007 onwards, the regulatory and supervisory authorities spent almost 10 years drawing conclusions for the financial industry, some of which are still being implemented today. Even “investor protection lawyers” have jumped on this bandwagon and have covered the financial industry with lawsuits.

Not least because internal and external processes, documentation guidelines and the information and reporting systems of numerous private wealth managers were not adequate, a very consumer-friendly legal system has emerged, which has cost the financial industry billions. The regulatory authorities have derived numerous measures from this, which have been reflected in MiFID and MiFID II, for example.

The corona crisis has the potential to have an even more serious impact on the real economy and thus on investors than all crises in the past 50 years. If this potential has a corresponding regulatory impact, the financial industry will also face some regulatory challenges in the coming decade.

What can we do for you?

We have many years of experience in defending numerous investor protection lawsuits and the first test case in the financial services sector. In addition, we know what you need to pay attention to in your daily business due to our consulting practice. In addition, we communicate with the regulatory authorities on an equal footing and can also proactively influence them.

We make this accumulated know-how available to you in the well-known quality and speed, even in times of “Don’t panic!”

When communicating with your customers, customer advisors and external sales staff, we ensure that it is not only comprehensible but also legally sound.

When selecting the right courses of action and developing internal and external processes and documentation guidelines, we ensure that your records, procedures and decisions are legally sound.

Finally, we are happy to coordinate with the regulatory authorities in order to agree on packages of measures and to reduce or, in some cases, completely eliminate intervention by the authorities “ex officio”.

Please do not hesitate to contact us!

COVID-19 – Energy and Competition / State aid: Review of the main measures provided by the state of emergency decree

The state of emergency was instituted in Romania for a period of 30 days as of 16 March 2020 (i.e. the date when Decree No. 195/2020 establishing the state of emergency in Romania was published in the Official Gazette).

We have included below a short review of the main measures provided by the state of emergency decree from an energy and competition / state aid perspective:

  1. The Government may adopt measures to support the economic operators in the areas affected by COVID-19;
  2. Beneficiaries of European funds affected by the emergency measures provided in the state of emergency decree may decide, together with the managing authorities / intermediary bodies, to suspend the financing agreements;
  3. The Ministry of Economy, Energy and Business Environment may issue, upon request, to the economic operators whose activity is affected in the context of COVID-19, certificates attesting the emergency situation, based on supporting documents;
  4. Measures will be provided to ensure continuity in supply, respectively extraction, production, processing, transport, distribution, supply, maintenance and repair, of resources and raw and / or semi-processed materials necessary for the proper functioning of the national energy system, as well as ensuring the continuity of operation of the energy system and all public utility services;
  5. The validity of documents issued by the public authorities that were to expire during the state of emergency is maintained;
  6. During the state of emergency, prices for medicines and medical equipment, for foods of strict necessity and for public utility services (electricity and heat, gas, water supply, sanitation, fuels, etc.) can be capped, within the limit of the average price of the last 3 months before declaring the state of emergency;
  7. During the state of emergency, it is forbidden to declare, commence or carry out collective labour conflicts within the units of the national energy system, operating units from nuclear sectors, continuous fire units, health and social assistance units, telecommunications, radio and public television, rail transportation, units ensuring public transport and sanitation of towns, as well as supplying the population with gas, electricity, heat and water.