Aviso Legal

Our Ref: 17896480
Your Ref: 251760
Mr. Jaan Albrecht
CEO of AG AUSTRIAN BANK
Salzachtalstraße 2, 5400 Hallein

Dear Mr. Albrecht
Loans to SPANISH COMPANY
Thank you for your letter of 15th of October, addressed to Mr. Levan Maisuradze, in which you requested legal advice on loans to debtor - SPANISH COMPANY. The legal advice is set out below.
1. Necessity of opening Insolvencyproceedings
We consider that it will be in best interests of your company to open the insolvency proceedings against debtor – Spanish Company – urgently. In our opinion your company should open the proceedings against the parent company, not the subsidiary. By opening insolvent proceedings your company will be able to satisfy its demands to the debtor and avoid complications.
Reason for this answer:On the basis of the information you provided, we can conclude that if you do not open insolvency proceedings urgently, it may threaten your financial interests. For instance, the debtor may waste its assets, get new debts. In addition, we could not find any legal basis to open insolvency proceedings against subsidiary company. Because, the company is in a good financial shape, despite the factthat parent company is insolvent. The subsidiary is separate subject of law and the approach should be consequently separate.
2. Applicable law
In your letter you is noticed, that your bank has loans to Spanish Company. First of all we should define the applicable law to find the best legal solutions of your problem. We are of the view that on your case applies EC Regulation – (EC) No 1346/2000 of29 May 2000 on insolvency proceedings (Regulation) and national legislations of Spain, Germany, France and Georgia about insolvency proceedings.
Reason for this answer:
Article 1(1) of the Regulation which defines the scope of the regulation states, that
This regulation shall apply to collective insolvency proceedings which entail the partial or total divestment of a debtor and theappointment of a liquidator.
And under Article 1(2)
The regulation shall not apply to insolvency proceedings concerning insurance undertakings, credit institutions, investment undertaking which provide services involving the holding of funds or securities for third parties, or to collective investment undertakings.
European Court of Justice states:
“The wording of Article 1(1) of the Regulation showsthat the insolvency proceedings
to which it applies must have four characteristics. They must be collective
proceedings, based on the debtor's insolvency, which entail at least partial
divestment of that debtor and prompt the appointment of a liquidator” (see Judgment of 2.5. 2006 – case C-341/04, Para. 46)
In our case this regulation applies because:
(a) If your company follows our adviceprovided above and opens the insolvency proceedings it will be ‘collective insolvency proceedings which entail divestment of a debtor ‘for the reasons of Article1 (1).
(b) This proceedings will not fall into the exclusions provided by Article 1(2), because, this proceedings are not concerning ‘insurance undertakings, credit institutions’, the debtor SPANISH COMPANY produces mobile phones andis not ‘credit institution’ or ‘investment undertaking’ for the reasons of Article 1(2)
In addition in our case is relevant national Spanish legislation, considering the fact that every legal aspect is not covered by the abovementioned regulation and leaves margin of appreciation for the national legislature. The Spanish legislation is relevant because we should open proceedings in Spain asarticle 4.1 of the Regulation provides that:
“Save as otherwise provided in this Regulation, the law applicable to insolvency proceedings and their effects shall be that of the Member State within the territory of which such proceedings are opened”.
Therefore, all the issues which are not covered by the Regulation should be decided under the Spanish legislation, particularly Insolvency Act (Ley...