2009 Overview

Despite the continued impact of the global financial crisis on the Hungarian economy, the firm had a very solid year overall, with an upsurge of work in certain key practice areas.

Corporate and Commercial, M&A

The firm provided corporate and M&A advice to and support for a wide range of clients, with such work including:

• advising a multinational hospitality consultancy on a joint venture with a North American partner for the reconstruction and refurbishment of a shopping centre, which included advice on the joint venture and contractor agreements
• advising a rail company on the spin-off of certain of its businesses in Hungary
• ongoing corporate advice to and support for various Hungarian subsidiaries of a global group, which included a cross-border acquisition of Swiss subsidiaries and the relocation of business activities

Corporate Restructuring and Insolvency

The demand for corporate restructuring work and advice on a wide range of insolvency matters remained strong. Such work included:

• advising a global commodities trader on company acquisitions as part of debt restructurings
• advising a multinational’s local production subsidiary in a debtor-initiated liquidation process
• commencement of a liquidation procedure for a manufacturing multinational against the Hungarian subsidiary of an international car-parts manufacturer, and the subsequent negotiation of a debt restructuring agreement 
• initiation of liquidation procedures for various clients, often with the subsequent negotiation of a debt restructuring agreement in which the liquidation was suspended as security for the debtor’s fulfillment of the repayment schedule 

Commercial Property/Real Estate

Despite the economic downturn, the firm continued to advise clients on a number of large-scale commercial and residential developments and in related litigation and arbitration, with several such developments opening in 2009. Such work included:

• advising the Hungarian subsidiary of a German-Austrian cosmetics retailer on a large-scale greenfield investment involving the construction of a distribution and commercial office facility in the vicinity of Budapest
• working on a zoning plan modification and zoning agreement for a large-scale development of a property development company, and also dealing with various tenant disputes
• providing an Iberian real estate company with transactional advice on a large-scale real estate acquisition
• acting for a leading CE property development group in the acquisition and sale of office buildings, as well as arbitration involving the termination of a large-scale construction agreement

Employment

The firm saw strong demand from clients in this key practice area. Such work included:

• structuring dismissals for a number of clients so as to avoid collective redundancies, communicating with trade unions and works councils, liaising with local authorities, and elaborating employment cost-cutting schemes, which included advice on temporary decreases in hours and salaries
• drafting standard employment contracts and advising on executive relocations, internal employment law policies, non-compete agreements and amendments to collective bargaining agreements
• advising on several large-scale labour law successions and collective redundancies

Tax

The firm continued to advise clients on a wide range of contentious and non-contentious taxation matters, with such work including:

• advising various international clients on group-financing vehicles, royalty-payment structures, shared service centres and various other activities
• successfully representing a global oil and gas company in litigation involving its local business support centre re: compliance with the VAT Directive
• successfully representing a Hungarian manufacturing company in a lawsuit with the Hungarian tax authority regarding workforce tax treatment
• representing the subsidiary of a multinational real estate development company in a lawsuit with the Hungarian Tax Authority re: corporate tax treatment, which was eventually withdrawn by the Authority

Dispute Resolution and Litigation

There was continued, strong demand from clients for representation in a wide range of matters before the Hungarian domestic, arbitral and other regular courts and competent authorities, including in insolvency mediation and formal insolvency proceedings. Such work included:  

• successfully representing a leading CE real estate development group before the ICC ICA in a construction matter, and representing various companies in the group in a domestic arbitration forum in various disputes arising from construction contracts, lease agreements etc.
• acting for an international real estate company in complex arbitration regarding the payment of the purchase price for a real estate project involving, inter alia, environmental matters
• representing a healthcare multinational in connection with various tenders in front of the Committee of the Public Procurement Council (Hungary)

Banking and Securities

The firm saw steady demand for advice in this area, particularly in refinancing matters, with highlights including:

• performing a legal audit of and issuing a legal opinion for three local financing companies of a CE banking group for the purpose of validating the companies’ front office and back office documentation and work-out procedures under the EC Capital Requirements Directive in order for the companies to be able to calculate their capital adequacy ratios according to the internal ratings-based (IRB) approach 
• ongoing advice to the Hungarian subsidiaries of a global financial leasing company on matters such as the preparation of its model contracts and specialised financing contracts, and e-commerce and data protection
• assisting a leading Central European real estate development group in the re-negotiation of a multi-million Euro credit facility and related collateral agreements for the complete refurbishment of a prestigious office building in Budapest

Antitrust/Competition

The firm continued to advise clients on a wide range of competition law matters, including:

• representing two private undertakings in a cartel procedure before the Hungarian Competition Authority
• ongoing advice to a diversified technology multinational on a variety of matters, including distribution, marketing policies and the avoidance of unfair practices. The firm also advised the client on the competition law aspects of a European-wide public procurement procedure
• ongoing advice to the Hungarian subsidiary of a German-Austrian cosmetics retailer on a variety of matters, including marketing policies and the avoidance of unfair practices