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11 July 2015: YVN's contribution to the International Comparative Legal Guide 2015

5 April 2013: Banking, Finance and Insolvency practices of YVN expand and move to a new office

31 January 2013: Receivables under public procurement contracts “not transferable by law”

26 June 2012: CJEU affirms the “list means what it says” concept, which was successfully defended by YVN in the CHERNORIZETS HRABAR trademark case

11 April 2012: The landmark MАGNUM trademark case (Nеstlé vs Unilеvеr) finally won by YVN

2 December 2011: One-sided jurisdiction clauses not enforceable in Bulgaria

30 April 2011: Five rules for the out-of-court foreclosure on pledged assets

15 September 2010: Assignment of future receivables null and void under Bulgarian law

3 December 2009: The Non-defaulting Party under an ISDA Master Agreement must lodge its claims in the insolvency proceedings

1 July 2009: Website of YVN

11 July 2015 International Comparative Legal Guide, a series of comprehensive guides that provide current and practical comparative advice on a range of practice areas

YVN is featured in the ICLG’s Ninth Edition, Corporate Recovery & Insolvency 2015, along with leading insolvency lawyers and industry specialists from a total of 35 jurisdictions worldwide. Our insight comprises brief and practical counsel on certain key issues that may arise from a company facing financial difficulties, including any formal procedures, the role of creditors and their claims, continuing the business and restructuring, all from the perspective of applicable Bulgarian and European law and legislation.

Researched by YVN’s insolvency and debt recovery department and compiled under the supervision of Mr Nenov and Mr Tsanov, two of our leading experts in the field, the article is aimed at giving its readers useful and most importantly, practical, easy-to-follow advice on what to expect when a company is facing insolvency. The information provided would, hopefully, be of use to professionals and practitioners alike, but it is also suited to the needs of company management executives and company employees, as it takes into account their role and participation in both insolvency and recovery proceedings.

You can access the full article here.

5 April 2013: Banking, Finance and Insolvency practices of YVN expand and move to a new office

The new home of the expanding Banking, Finance and Insolvency practices of YVN is located at 5 Bistritsa Street, just 150m from the main office of the firm. The renovated century old house is a registered culture monument. It has six spacious office rooms, two meeting rooms, a conference room and, what is especially important for the city centre, garage and parking facilities for 14 cars.

(see in Google maps)

 

31 January 2013: Receivables under public procurement contracts “not transferable by law”

It is quite common for the Bulgarian Contracting Authorities to delay the payment of the Contractors’ remunerations for months. Not only the Contractors are deprived of payment but they pay the 20% VAT on the invoices issued upon acceptance of the supplies, works or services and the Contracting Authorities reimburse the tax before having paid it. Yet the Contractors had a chance to receive financing by transferring or pledging their receivables under the performed public procurement contract.

With a mandatory judgment No.162 of 28 January 2013 on case 453/2012 the Supreme Court of Cassation however denied the possibility of assignment of the Contractor’s receivables. As a consequence the receivables cannot be pledged either – pursuant to art.162 LOC only transferable receivables can be pledged.

The judgment is grounded by the provision of art.43, para 1 of the Public Procurement Law which prohibits the amendments in public procurement contracts. The Court considers that the assignment of the receivables has the effect of a subjective novation, i.e. of amendment to the public procurement contract.

 

26 June 2012: CJEU affirms the “list means what it says” concept, which was successfully defended by YVN in the CHERNORIZETS HRABAR trademark case

The Court of Justice of the European Union announced its judgment in case C-307/10 (IP Translator) regarding the role of the class headings when used in the list of goods and services in a trademark application.

The Court ruled that the Trademark Directive “...requires the goods and services for which the protection of the trade mark is sought to be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on that basis alone, to determine the extent of the protection conferred by the trade mark”.

Three years earlier this concept was successfully defended by YVN before the Bulgarian courts in the hot dispute regarding the CHERNORIZETZ HRABAR trademark (Union of Bulgarian Publishers vs Atanas Panayotov).

 

11 April 2012: The landmark MАGNUM trademark case (Nеstlé vs Unilеvеr) finally won by YVN

By its final judgment No.5318 of 11 April 2012 on case 10085/2011 the Supreme Administrative Court resolved in favour of Nеstlé the dispute with Unilеvеr for the ice cream trademark MАGNUM.

The Court accepted our arguments for wrongly transposed provisions of the Trademark Directive and acknowledged the direct horizontal effect of the Directive. In particular the judgment stated that the use of the trademark in advertisement cannot be considered as use in commerce per se as wrongly defined in art.13, para 2 of the Bulgarian Trademark Law; applying the Directive and referring to the settled case law of the CJEU the Court decided that there was no effective use of the trademark MАGNUM by Unilеvеr. Further, the Court ruled that in the cases of International Registrations the relevant for the use 5-year term starts to run as of the date of the registration and not after the expiration of the one year period for issuing of a provisional refusal by the National Office.

 

2 December 2011: One-sided jurisdiction clauses not enforceable in Bulgaria

Arbitration clauses with unilateral option to litigate are very common in loan agreements, especially in those governed by English law. By Judgment of 2 September 2011 on case 1193/2010 the Supreme Court of Cassation declared such clauses void and not enforceable. Here is an excerpt from the judgment:

“The interpretation of the jurisdiction clause implies that the right stipulated in favour of the lender in case of a dispute with the borrowers to determine the tribunal before which to exercise its right of claim is of the category of the potestative subjective rights (transforming rights). Specific for the potestative right is that it allows one person at his will unilaterally to alter the legal rights of another person or group of persons. To this right corresponds the legal obligation of the person or persons to suffer the effects of the exercise of transformation right. The potestative right derives from a particular set of facts and it can occur only under the rule of law, but not under a contractual obligation, as is the case. The foregoing considerations lead to the legal conclusion that a jurisdiction clause by which in violation of the law one of the parties is given the opportunity to unilaterally choose tribunal to which to refer the resolving of the dispute under a particular contractual relationship is void under the provision of article 26, paragraph 1, first proposition LOC.”

When stating that the clause violates the law the Court does not quote the specific provision of the law, to which the clause contradicts. In contrast to the French law, for example, the Bulgarian law has no rule about conditions potestative; the word “potestative” does not appear in any legal act – either law or a secondary legislation.

The judgment is not issued in cassation proceedings and therefore it is not mandatory. Nevertheless, the judgment indicates the existence of a high risk of invalidation of the one-sided jurisdictional clauses. To avoid such risk the parties (lenders) should switch to exclusive jurisdiction clauses (arbitration or prorogation) in their contracts with Bulgarian counterparties.

 

30 April 2011: Five rules for the out-of-court foreclosure on pledged assets

By Judgment No.40 of 13 April 2011 on case 448/2010, which is issued on the ground of art.290 of the Civil Procedure Code and is mandatory for the lower instances, the Supreme Court of Cassation defined a comprehensive set of 5 specific obligations, which the pledge creditor under a registered pledge should perform before the sale of the pledged assets:

1. To procure an appraisal of the market value of the assets, to be used as indication of the price which might be achieved at the sale;
2. To announce the sale by means, guaranteeing the informing of the persons who are interested in the purchase, where the announcement should contain sufficient specific data about the assets;
3. To wait for a reasonable term (within the statutory 6-month term) after the announcement for receiving offers by potential buyers;
4. To conclude the sale agreement with the candidate who has offered the highest price, observing the mandatory requirement under art.37, para 2 LRP for payment of the full amount of the price;
5. If the pledgor wishes so, to allow to him to actively participate in the search of a buyer.

By analogy with the public auctions the minimum reasonable term for collection of offers should be one month, provided that the achieved highest price is at least equal to the market price defined by the appraiser’s report. For sale at a lower price the term should be extended and a second announcement might be required.

This judgment fills a gap in the law and the definition of clear rules would be useful for both the pledge creditors and the pledgors.

 

15 September 2010: Assignment of future receivables null and void under Bulgarian law

Judgment No.32 of 9 September 2010 on case 438/2009 of the Supreme Court of Cassation rendered null and void all transfers of future receivables.

With reference to art.99, para 2 of the Law on Obligations and Contracts (LOC) the Court defines the existence of the receivables as a statutory precondition for the validity of the assignment. As a second argument the Court denies the identifiability of the future claims.

The effect of the judgment on the anyway modest factoring financing in Bulgaria is to be seen. It should be noted that based on express statutory provisions future receivables can be securitized by a special purpose investment company (“АДСИЦ”) and can be secured by pledge, mortgage or personal guarantee (suretiship). Future receivables and a floating pool of receivables may also be pledged under the Law on Registered Pledges (LRP) - art.4, para 2 of the law.

 

3 December 2009: The Non-defaulting Party under an ISDA Master Agreement must lodge its claims in the insolvency proceedings

With its Judgment No.170 of 30 November 2009 on case 5/2009 the Supreme Court of Cassation gave guidance for the unification of the case law on the questions:

• is the set-off within the bankruptcy proceedings possible after the expiration of the deadline for lodging the claims if the creditor has missed to lodge the active claim;

• is the set-off within the bankruptcy proceedings possible in the cases where the active claim is not liquid (i.e. it is objected by the receiver).

The judgment answered the questions stating that: (i) if the creditor has missed to lodge the active claim within the statutory 3-month term for lodging the claims this claim is precluded and the set-off is not anymore possible, and (ii) the set-off cannot produce its legal effect if the active claim is not liquid.

This judgment is mandatory for the lower instance courts. Since there is no Bulgarian close-out netting legislation the judgment also affects the parties under the ISDA Master Agreements.

In line with the interpretation given by the Supreme Court of Cassation the set-off statement addressed to the receiver should be made as early as possible after the institution of the insolvency proceedings. Absent an express acknowledgement by the receiver of the effect of the set-off (netting), all claims must be lodged prior to the deadline for lodging the claims.

Should the Non-defaulting Party under an ISDA Master Agreement fail to timely lodge its claims all those claims will be precluded, while the claims of the Defaulting Party (both the negative Close-out Amounts and the Unpaid Amounts owing to the Defaulting Party) will remain due and payable. The Bulgarian law securities are accessory, thus they will extinguish simultaneously with the secured claims of the Non-defaulting Party.

1 July 2009: Website of YVN

After years of hesitations we have finally decided to launch a corporate web site of our law firm.

The client-lawyer relationship is always a strictly personal one and Internet is not the medium through which such a relation can be established. Nevertheless we understand that we have to present some basic information about us to our partners, clients and prospective new colleagues.

On this page we will soon commence publishing interesting news and legal alerts. So, please, come here again...


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