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“There haven’t been any large shifts in the legal landscape recently if we’re talking about legal offices, teams moving, exits, and so forth,” says Schoenherr Partner Miriam Simsa. “The general situation seems to be that established players have things pretty much in control and that there is not a lot of room for new entries. Yet it is fair to say that the spin-offs have been increasing their market share over the last few years.”

Cash pooling is a staple of corporate treasurers as an efficient way to allocate liquidity and reduce financing costs within a group of companies. Despite its commercial importance, neither Austrian statutory law nor the Austrian Supreme Court has provided any guidance as to whether cash pooling is permissible under Austrian law – in particular whether it is compatible with Austria’s strict capital maintenance laws.

Bond financing has recently become quite popular in the Czech Republic and companies often finance their business needs by issuing corporate bonds instead of the more usual credit financing. Obviously, the popularity of corporate bonds is also associated with the greater willingness of investors to buy them. Bonds are perceived by the general public as a safe and conservative investment instrument. Nevertheless, recent market developments show that corporate bonds issued by private companies may not always be a safe investment, as evidenced, for example, by the insolvency of online fashion store Zoot, which funded its expansion by issuing bonds.

No doubt we all agree that a good lawyer should not only have extensive legal knowledge and experience, but should also constantly monitor the market. In reviewing the state of the Czech legal market over the past six months, I would like to point out several issues I personally find interesting or important.

In September 2018 Schoenherr Partner Thomas Kulnigg advised crowd-investing company Conda AG on the digitalization of its shares, allowing the registered shares to be managed via blockchain technology. The project represented the first-ever digitalization of shares linked to digital tokens in an Austrian joint stock company. The tokens were digital units that were mined exclusively by Conda on a blockchain (dis-tributed ledger technology) protocol and then given to company shareholders. When a shareholder trans-fers a token to another person, the transfer is recorded in the blockchain and, on that basis, the transfer is also registered in Conda’s share ledger. The transfer of a token is thus the equivalent of a share transfer.

Each member of an elected body pursuant to Section 159 (1) of Act No. 89/2012 Coll., Civil Code ("CC") is obliged to act with due managerial care. These are typically executive directors or members of the board of directors or supervisory board. In practice, questions often arise about what happens when they breach this duty of care and whether their liability can be limited.

In its decision of 18 September 2019, the Austrian Higher Administrative Court ("VwGH") found that the operation of an electric filling station does not constitute the operation of an electricity company and is thus subject to the rules of the Austrian Trade Act ("GewO").1

Be prepared – Know what's coming: Two new Directives – Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services ("Digital Content Directive"), and Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods ("Sale of Goods Directive") – will have a major impact on the provision of digital content and on the sale of goods. We have therefore started a special bi-weekly edition of our Legal Insights service dedicated to providing you with the most relevant legal information on those Directives.

Schoenherr at a Glance

Schoenherr is a leading full-service law firm providing local and international companies stellar advice that is straight to the point. With 14 offices and 4 country desks Schoenherr has a firm footprint in Central and Eastern Europe. Our lawyers are recognised leaders in their specialised areas and have a track record of getting deals done with a can-do, solution-oriented approach. Quality, flexibility, innovation and practical problem-solving in complex commercial mandates are at the core of our philosophy.

Firm's website: www.schoenherr.eu