2. schoenherr in europe

3. 5th CIS Local Counsel Forum | Minsk  Where are the distressed assets? –Talk to banks/leasing companies or search by industries (eg everyone in real estate development or household appliances is more or less distressed)  What to do when we find them? –If operational business is profitable, negotiate a substantial haircut with the banks and buy it - this brings you again to the banks... flip answer

4.  Which industry sectors are said to provide the most opportunities for distressed investors in 2010? closer look Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010 5th CIS Local Counsel Forum | Minsk

5.  Which European countries are said to produce the greatest opportunities for distressed investors in 2010? closer look cont‘ed Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010 5th CIS Local Counsel Forum | Minsk

6.  Have European restructurings reached their peak already? restructurings Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010 5th CIS Local Counsel Forum | Minsk

7.  What are the greatest challenges to achieving restructuring? restructurings cont‘ed Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010 5th CIS Local Counsel Forum | Minsk

8.  What forms of financial restructurings are said to be the most prevalent in 2010? restructurings cont‘ed Source: Merger Market, European Distressed Debt Market Outlook 2010, January 2010 5th CIS Local Counsel Forum | Minsk

9. Pros  Exclusivity agreement possible  Preservation of existing contracts (supply/customer agreements, licensing agreements, lease agreements etc)  No negative impact on the market/ customers  Time Cons  Assumption of liabilities by the acquirer  No privileged reorganisation measures (termination of contracts and employees)  Risk of unlimited assumption of unknown liabilities (Due Diligence)  Risk of challenge of transactions  Seller´s liability risks  Price Acquisition prior to insolvency austrian case study acquisition of businesses prior to or after their insolvency?

10. 5th CIS Local Counsel Forum | Minsk Pros  Limitation/exclusion of acquirer‘s liability  Privileged restructuring measures with respect to existing contracts and employees  Risk of assumption of unknown liabilities excluded or limited  No risk of challenge of transactions  Price Cons  Lack of exclusivity (sale to the best bidder)  Additional players (insolvency courts, insolvency administrator/ liquidator, creditors)  Loss of essential contracts possible (termination rights)  Loss of key employees  Negative market impact  Costs of insolvency proceedings  Time Acquisition following opening of insolvency proceedings austrian case study acquisition of businesses prior to or after their insolvency?

11. 5th CIS Local Counsel Forum | Minsk  Subject to applicable procedural law acquisition of a business subject to insolvency proceedings may be subject to challenge/invalidation if the sale of the business is disadvantageous for the businesses‘ creditors  Mitigation of challenge/invalidation risks: -Expert opinion on valuation of business -Lapse of procedural remedies for challenge (subject to applicable procedural law) -Establishment of a restructuring concept by the purchaser -Trustee/escrow structure austrian case study acquisition of businesses prior to or after their insolvency?

12. 5th CIS Local Counsel Forum | Minsk When are directors of the borrower under the obligation to file for insolvency? 2.Establishing a strategy for restructuring  Austria -borrower’s directors must file for bankruptcy without undue delay upon insolvency (=illiquidity or over-indebtedness), but within 60 days at the latest -borrower’s directors may file a restructuring plan, including a status (assets/liabilities) and finance plan (stating how the next 90 days of the going concern and the settlement of preferential claims will be achieved) and apply for restructuring proceedings 12 austrian case study acquisition of businesses prior to or after their insolvency?

13. 5th CIS Local Counsel Forum | Minsk contact information Gudrun Stangl Managing Partner (Bratislava) T (Vienna): +43 1 534 37 267 T (Bratislava): +421 2 571 007 21 E: g.stangl@schoenherr.at

14. Thank you!

15. 5th CIS Local Counsel Forum | Minsk Legal advisor to Ernst & Young Advising the Administrators (Ernst & Young) of the Nortel Networks on its world wide restructuring and the administration of its European entities in Austria, Czech Republic, Slovakia, Poland, Romania and Ukraine. Telecom 2009 Merger of Immofinanz with Immoeast EUR 8 billion Legal advisor to Immofinanz Real Estate 2010 Sale/Nationalisation of Kommunalkredit Bank AG to Republic of Austria Legla advisor to Volksbanken AG Banking 2008 highlight deals

16. 5th CIS Local Counsel Forum | Minsk Sale by Immofinanz of WIPARK GmbH Legal Advisor to Immofinanz Real Estate 2009 Legal advisor to ÖVAG Banking 2009/10 Acquisition of distressed Eybl Austria and its subsidiaries in Slovakia and Romania Legal advisor to Prevent DEV GmbH Automotive 2009 Sale of ÖVAG’s participation in Volksbank Wien AG, Ärztebank AG and Immobank AG EUR 210 million highlight deals