Do you have a handle on the rules on moving-in and moving-out inspections?
27 December 2022 If you, as a landlord, own more than one residential lease, you are covered by the rules on holding move-in and move-out inspections. Failure to comply with this means that you as the landlord lose your claim to repair the lease upon the tenant’s vacating, this also applies even if the tenant has defaulted on the lease. A great many rent board cases include the landlord’s eviction claim in connection with the tenant’s eviction, and if the formalities are not in place, the landlord has lost the case in advance, which unfortunately we see all too often. Settlement inspection The tenant must be summoned to a move-in inspection, however, there is no requirement for a written summons or requirement for the length of the tenant’s notice, as the tenant must be able to adjust accordingly in terms of time. It is our clear recommendation that the move-in inspection is always held at the same time as the keys to the tenancy are handed over. During the actual move-in inspection, the condition of the tenancy must be documented by drawing up a real move-in report. It may be a good idea to take pictures of the rental, as a supplement to the report. The move-in report must be handed over to the tenant during the inspection itself, and the tenant must acknowledge receipt of it. It is therefore not sufficient that e.g. send the report subsequently per email to tenant. If the report is prepared electronically, it must be sent to the tenant at the end of the inspection, and the tenant must acknowledge receipt of it immediately upon receipt. Only if the tenant does not attend or refuses to acknowledge receipt of the report, you have the option of subsequently sending it to the tenant, which must be done no later than 2 weeks from the move-in inspection. In practice, however, this exception has little meaning. The most important thing for you as a landlord is to prepare a correct and detailed report as well as secure documentation that the tenant has de facto received this during the actual move-in inspection. Evacuation view When the time has come for the tenant to move out, an eviction inspection must also be called and held. At the eviction inspection, the tenant must be summoned to the eviction inspection in writing with at least one week’s notice. In the event that the tenant does not attend the eviction inspection, it is important that the formalities surrounding the summons are complied with, as otherwise the eviction inspection cannot be validly held, and the deadline for holding it risks being missed. Invitations can be made per letter, email or SMS, depending on your agreement on digital communication and how you have communicated so far. It is important that you have documentation that the tenant has been duly summoned. After the tenancy has been terminated or terminated, it is possible for you and the tenant to enter into an agreement on a shorter notice for the eviction inspection. However, always remember to follow up such an agreement with a written notice, e.g. ”According to the telephone agreement, I hereby confirm our agreement on holding the eviction inspection[dato] , at[tidspunkt] ”. The eviction inspection must be held within two weeks of the tenant’s eviction (key handover), or from the time when you become aware that the tenancy has been vacated, e.g. upon notice from the tenant. During the eviction inspection itself, a written report must be drawn up – as with the move-in inspection – in which the condition of the tenancy at the time of eviction is indicated. Again, it is a good idea to supplement the report with pictures, especially of any damage to the tenancy for which the tenant is liable. It is essential that it is specifically stated which renovation works the tenant is responsible for, e.g. wallpapering and painting walls in the living room and bedroom, replacing a broken door in the kitchen, etc. It is not possible to make further claims than what is stated in the eviction report, unless there are hidden faults and defects which could not or should not have been discovered during the eviction inspection. Therefore, remember to bring everything with you. The tenant must – as when holding a move-in inspection – have handed over a copy of the eviction report at the inspection itself, and the tenant must acknowledge receipt of this. It is not sufficient that e.g. send the report subsequently per email to tenant. If the tenant does not attend the eviction inspection or refuses to acknowledge receipt, the report must be sent to the tenant in writing no later than two weeks from the inspection. The most important thing for you as a landlord is to prepare a correct and detailed report and secure documentation that the tenant has been summoned to the eviction inspection and has received a copy of the eviction report during the inspection itself. Alternatively, this has subsequently been sent to the tenant, due to the tenant’s failure to attend or if the tenant has refused to acknowledge receipt.
Greenwashing: New rules clarify the boundaries for when you can call something green
In this article, DreistStorgaard’s business team reviews the Danish rules on when a company is guilty of greenwashing . Today, many companies make a point of telling what they do in the ESG area, but you have to be careful that you don’t communicate something that actually goes against the rules of proper marketing. The problem is that some companies make themselves out to be greener than they really are, and are thus guilty of greenwashing . The new “quick guide” from the Consumer Ombudsman This is the focus area of the new guidelines, a so-called “Quick Guide”, which the Consumer Ombudsman has come up with [1] . At the same time, the Consumer Ombudsman is given more money; 7 million per year in the period 2022-2025, to combat illegal greenwashing. When companies communicate to the outside world, it is seen more and more often that they use words such as “environmentally friendly”, “we focus on reducing CO2” and “we are sustainable”. This gives the recipients the impression that they are dealing with a “green” company. But when are you really so “green” that you have to say so? The rules on misleading marketing The rules on misleading marketing are set out in §§ 5-6 of the Marketing Act and in § 13 [2] , and generally it follows that climate and environmental statements that are used in a marketing context (i) must be correct; (ii) must be clearly worded and (iii) must not omit material information. Not only that, you must also be able to document statements about facts, which means that such statements must be able to be investigated and either substantiated by statements from or confirmed by independent experts [3] . The Consumer Ombudsman distinguishes between ” general ” and ” specific ” statements, and the way in which the two types of statements must be handled are different. General environmental statements General statements are positive statements such as “green”, “climate friendly”, “environmentally friendly” and “sustainable” – and often give the impression that there is a positive environmental effect. As the Consumer Ombudsman says, ” all production will affect the environment/climate, it is therefore basically misleading to use this type of statement in marketing “. As a company, you may therefore only use these general statements in very special cases. The following criteria have been set in relation to the use of the general environmental statements: The product referred to must belong to the absolute best on the market . If several products are equally good, none may be mentioned in positive terms in relation to having an environmental profile. In continuation of section 1 it must be able to be documented that the product generally burdens the climate or the environment significantly less than similar products. The requirement for the documentation is that it must be based on a life cycle analysis [4] of the product and can be supported by opinions or studies from independent experts. If your product has obtained an official labeling scheme [5] , this may be called “more environmentally friendly”, “better for the environment” or the like without a life cycle analysis being carried out. When using general statements, where there is also information about a specific environmental benefit of a product which explains the general part of the statement, a life cycle analysis is not necessary if it is ensured that the general part of the statement is read together with the explanation. However, a number of additional requirements are made in these situations, including that: The environmental benefit must not only have marginal importance for the environment. The environmental benefit must not have resulted from activities that in themselves damage the environment. The climate or environmental benefit of the product must not be significantly reduced by environmentally harmful aspects of the product [6] . It must be a distinct environmental benefit that is not usually found in similar products. Concrete statements Strictly specific statements are a little easier to use, as neutral and concrete information about a product or company given in an objective manner, without emphasizing environmental or ethical considerations, will not normally be considered suitable to mislead consumers. But here, too, there are limits that you must be very aware of. If a product only meets environmental requirements, this must not be communicated as an environmental benefit. You must also remember to continuously assess the statements that have been circulated, and update these if they are no longer correct. It can, for example, happen due to technological breakthroughs, which mean that a product that was previously very environmentally friendly is no longer so. Communication on carbon footprint reduction Many companies are working to reduce their CO2 footprint, and when communicating about this, it requires special attention to stay within the framework that the Consumer Ombudsman has now set out: You can only say that you are trying to reduce your carbon footprint if this is expressed in the adoption of a concrete plan that has been verified by an independent third party. You must produce green accounts that account for achieved and future reductions, and you cannot use historical reductions in this connection. You can only say that you are carbon neutral if your emissions are zero . If compensation mechanisms are used, this must be explained in precise terms and these must be verified by independent third parties. When can you call yourself sustainable? One term in particular is often used in communication, the word “sustainable”. In the Brundtland report from 1987, which bears the title “Our Common Future”, sustainability is defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs “. According to the Consumer Ombudsman’s statement, it will be very difficult – without misleading – to call oneself or a product sustainable. The rule is that a sustainability claim must be based on a comprehensive life cycle analysis that – when health, social and ethical issues are also taken into account
Is your company compliant?
The Data Protection Regulation and the Data Protection Act, which have been in force since 25 May 2018, provide for a new, significantly increased level of fines that must be effective and deterrent. With the regulation, it is also assumed that the Member States harmonize the sanctions for breaches of the data protection rules. In Denmark, it is the Data Protection Authority that, as the supervisory authority, controls the compliance of private and public authorities with the data protection rules. As far as the Courts’ processing of personal data is concerned, the task is left to the Danish Courts Agency. The Norwegian Data Protection Authority processes complaints and can, if necessary, initiate investigations on its own initiative. As part of the enforcement of the data protection rules, the Danish Data Protection Authority has been granted a number of powers. These powers are divided into investigative powers, corrective powers and approval and advisory powers. This article deals exclusively with the first two types of powers. As far as the investigation of the data processor’s compliance with the data protection rules is concerned, the Data Protection Authority can demand from the data processor any information that is of importance to its business – in other words, the Data Protection Authority can issue orders that the data processor must hand over information. Next, the Danish Data Protection Authority has access, without a court order, to the premises of the data processor, from which processing of personal data is carried out. If the Norwegian Data Protection Authority concludes that the data processor does not comply with the data protection rules, it is assigned a number of so-called corrective powers, of which warnings, criticism, various orders, prohibitions and fines are the most important. This article deals exclusively with fines for companies. When the Danish Data Protection Authority has to set a fine, this is generally done based on the considerations set out in the data protection regulation article 83. The fine must thus be effective, proportionate to the violation and have a deterrent effect. Based on the general principles that follow from the data protection regulation, the Danish Data Protection Authority has issued fine guidelines regarding both fines for natural persons and fines for companies. As far as fines for companies are concerned, it follows from the guidelines for the assessment of fines for companies that the Danish Data Protection Authority first determines the so-called basic amount, which is then adjusted on the basis of a number of elements: The Norwegian Data Protection Authority determines the basic amount The basic amount is adjusted based on the nature, seriousness and duration of the violation Additional aggravating or mitigating circumstances are included If the fine now exceeds the data protection regulation’s maximum, it will be adjusted down If there are good reasons for this, the fine can be adjusted due to the company’s ability to pay Since the calculation of the total fine is relatively complex, this article deals only with the general features of the calculation of the basic amount. In the calculation of the basic amount, the nature of the violation and the size of the company are taken into account. The Danish Data Protection Authority has published a number of decisions which can contribute to a more concrete understanding of the level of fines. You can find the published fine cases here. According to the data protection regulation, companies can be fined a maximum of up to: 75 million DKK (static fine ceiling) or 2% of the company’s total global turnover (dynamic fine ceiling), whichever amount is higher. The Danish Data Protection Authority has divided these violations into categories 1-3, where category 3 can result in the largest fine. 150 million DKK (static fine ceiling) or up to 4% of the company’s total global turnover (dynamic fine ceiling), whichever amount is higher. The Danish Data Protection Authority has divided these violations into categories 4-6, where category 6 can result in the highest fine. In addition to the powers to issue fines, the Danish Data Protection Authority is authorized to publish its statements and decisions. In practice, this means that the data processor’s errors can be published on the Danish Data Protection Authority’s website, from which anyone (including journalists) has access to the circumstances of the case and the Danish Data Protection Authority’s position on this. Concluding remarks The data protection rules can seem very confusing to many ordinary people. As stated above, lack of knowledge of the rules can have very large financial consequences as well as consequences for the publicity of your company. If you are in doubt as to whether your company’s processing of personal data is in accordance with the data protection rules, you can always contact DreistStorgaard Advokater. We are available for any questions you may have. You can contact us on phone 56 63 44 66 or by email kontakt@dslaw.dk.
DreistStorgaard powers the work in the M&A area and advises in connection with capital fund transactions
DreistStorgaard has advised the owners of a group of electrical installers in Zealand, including A/S Aage Langkjær with headquarters in Skælskør, in connection with the sale to the Norwegian capital fund Credo Partners, which at the same time also buys El & Teknik in Næstved and El-Comp in Vordingborg. Credo Partners has recently sold the Norwegian company Konstel, which with 20 acquisitions of local electrical installers in 3½ years grew from NOK 400 to NOK 1.5 billion. in turnover, and is now trying to repeat the success in Denmark. DreistStorgaard has advised the owners of A/S Aage Langkjær and other sellers regarding all aspects of the transaction, including preparation of the sale, implementation of due diligence, internal structuring prior to the sale, employment law matters and negotiation of transaction documents. In some areas, DreistStorgaard has also had a coordinating role for all the sellers in the transaction, including in relation to the reinvestment made by the owners. The main shareholder in Aage Langkjær, Lars Juhler Kristensen, who continues in the role of day-to-day manager of the company, says:It is an exciting path we are embarking on together with Credo Partners and the other sellers. It will be exciting to develop something together. Throughout, we have had very good help from the team at DreistStorgaard, who with a “safe hand” have helped us navigate the transaction documents and get everything in place. You could count on things being under control”. Client partner at DreistStorgaard is Søren Storgaard and the team that has worked on the case also includes partner Nikolaj Juhl Hansen as well as Janne Brustad, Katja Skovlund Jensen, Pia Petersen and Helle Hindborg. Søren Storgaard says:Super-exciting case to work with. I really believe that there is a good rationale in the thoughts that Credo Partners has, and it will be exciting to follow our clients on the new journey. Thanks to my team, who have put in an excellent effort, even if it has sometimes been into the wee hours.” DreistStorgaard’s M&A team is currently busy with transactions in the SME segment, and the transaction is the third major one in 2023 for the team. Read more here . Nikolaj Juhl Hansen, who joined DreistStorgaard as a new partner on 1 November 2022, says: “We are extremely busy at the moment and do not feel any kind of slowdown in our M&A segment. We act for a number of Danish companies that are in the process of processes with foreign buyers, so the level of activity is high. It really is a fantastic team that is in place at DreistStorgaard and I really enjoy working with all the new colleagues. With more transactional news in the pipeline, 2023 is shaping up to be an exciting, if busy, year. El & Teknik was advised by Thomas Colstrup from Advodan in Næstved and Christian Schlüter-Wraa from Penta Advokater advised El-Comp. DreistStorgaard thanks everyone for a good and smooth collaboration. You can read Credo Partners’ announcement of the transaction here .
DreistStorgaard continues the transaction season in the hot mid cap M&A market
DreistStorgaard has advised the owners of Brandgruppen ApS in connection with the merger with American Jensen Hughes. Brandgruppen is a consulting engineering company specializing in certified fire consulting, and is one of Denmark’s leading companies in this area. Jensen Hughes, headquartered in Maryland, USA, is the absolute largest and leading consultant in the USA, Europe and the rest of the world within fire safety of all types of construction, construction projects and warehouses, etc. Jensen Hughes consists of over 1,500 specialists who work with fire safety and projects in over 100 different countries and are associated with over 300 professional committees within fire safety. Thomas Schleidt, Allan Anton Hansen and Nicholas Lavard Brogaard established Brandgruppen in 2021, and thus already become part of the world’s largest company in this industry. Thomas Schleidt says of the transaction: “Becoming part of Jensen Hughes contributes to even more ongoing development of our fire technical qualifications and knowledge. This gives us both the opportunity to raise the professional level in Denmark and an even greater basis for creating value for our strong, permanent and future customer relationships in Denmark”. Allan, Thomas and Nicholas agree about the collaboration with DreistStorgaard: “We have received really competent assistance from DreistStorgaard’s team. They have helped us navigate such a cross-border M&A transaction, where a large American company naturally has its own way of doing things. Quick reactions and a commercial attitude have made us feel completely safe”. Client partner at DreistStorgaard is Svend-Aage Dreist Hansen and the team that has worked on the case also includes partner Nikolaj Juhl Hansen as well as Casper Simonsen and Christina Egevang. Svend-Aage Dreist Hansen says: “We enjoyed working with the three partners in the Brand Group. Impressive to become part of the world’s largest in the market after being in business for less than 2 years. I definitely believe that Brandgruppen and Jensen Hughes will be very successful in Denmark. Thanks to the team for a great effort.” The hallways at DreistStorgaard’s M&A team are currently busy. Nikolaj Juhl Hansen, who at DreistStorgaard works a lot with cross-border cases, says: “We cannot sense any kind of slowdown in the mid-market M&A segment at all. These are companies with perhaps a little less complexity than in the larger deals, and there is a high demand for them. We have a number of customers who are in the process of foreign buyers, so the level of activity is high. Jensen Hughes is supported by the American capital fund Gryphon Investors, and this is another trend we see; that the capital funds are very active in add-on transactions via their portfolio companies.“ You can see DreistStorgaard’s news about advice in other M&A in 2023 here . Jensen Hughes was advised by the American law firm Nelson Mullins and Gorrissen Federspiel. Addere Revision advised Brandgruppen’s owners and financial advisor for Jensen Hughes was RSM. DreistStorgaard thanks everyone for a good and smooth collaboration. You can read Jensen Hughes and Brandgruppen’s announcements of the transaction here .
Crypto asset service providers
Crypto-assets are becoming more and more common, and they are an expression of the rapidly growing digitization and globalization in the technological and financial fields. However, they have so far been subject to very limited regulation, which is why they attract a lot of interest from a legal angle, especially for companies that intend to operate within the area. Financial regulation in Denmark is generally characterized by retail regulation, which is largely based on EU regulation. This also applies in the area of crypto asset services. The EU and the European supervisory authorities have long focused on crypto-assets and their impact on the financial system, and in 2018 the EU adopted the 5th Money Laundering Directive for e.g. ‘virtual currency’. The purpose of the directive was to meet the risks that were immediately associated with the use of virtual currencies, whereby the actors in the field were covered by the scope of the money laundering regulation. In January 2020, the directive was implemented in the Danish Money Laundering Act, which thus expanded the scope of the law to also include a number of providers of crypto asset services in the future, cf. section 2 below. Since then, the EU has accordingly put forward proposals for the Market in Crypto-Assets (MiCA) regulation in 2020, which creates an independent, supranational regulatory regime for crypto-assets in the EU, cf. section 3 below. 1. VASP registration Under the Money Laundering Act, companies that offer a number of crypto-asset services must be registered with the Danish Financial Supervisory Authority as a Virtual Asset Service Provider (VASP), if the services are offered commercially. The Danish Financial Supervisory Authority defines a VASP as ” Companies that offer services with the exchange, transfer, issuance and storage of virtual currencies. ” Covered by the Money Laundering Act and registration with the Danish Financial Supervisory Authority are then companies that: Provides exchange between virtual currencies and fiat currencies, Provider of virtual wallets (An entity that provides services to protect private cryptographic keys on behalf of its customers for the purpose of storing, storing and transferring virtual currencies), Provides exchange between one or more types of virtual currency, Provides virtual currency transfer, and Issuing virtual currencies (e.g. Initial Coin Offering, “ICO”) Companies must be registered if they wish to offer one or more of the activities mentioned above, if the company is not already under the supervision of the Danish Financial Supervisory Authority in relation to other legislation. Furthermore, registration must only take place if the activity is carried out for business purposes, even if the activity is not the company’s main activity. Commercial means that the activity is offered to third parties (“customers”) or that the activity has such a scope that it constitutes a not insignificant part of the company’s turnover. If, on the other hand, it is simply a matter of individual business dispositions that have a natural connection to the company’s main activity, the company does not have to be registered, e.g. companies’ ongoing placement of surplus liquidity, where the purpose is passive asset management. The provider is then obliged to carry out risk assessment and know-your-customer procedures (KYC), and is also subject to the supervision of the Danish Financial Supervisory Authority, including a number of investigation, listing and notification obligations. Members of the company’s management and beneficial owners must also be assessed as fit-and-proper in connection with the registration request before the company can be registered with the Danish Financial Supervisory Authority. 2. MiCA In addition to the mentioned amendment to the Money Laundering Act, which now regulates a number of providers of crypto-asset services, crypto-assets are not independently regulated, which is why they basically fall outside the Danish financial regulation. This has meant that, for a number of years, providers of crypto-asset services have found themselves in a legal gray zone, where it has been doubtful which rules – if any at all – should apply, including whether a crypto-asset should be interpreted so that it is covered by the previous regulation. However, due to new EU legislation, the Danish FSA may soon supervise companies that work with cryptocurrency and technology, as the EU legislature is currently adopting a pan-European regulation of the market for cryptocurrencies with the regulation Market in Crypto-Assets (MiCA), which they have been working on since 2019. MiCA aims to 1) create uniform rules for players in the European market for cryptoassets and related services, 2) support innovation and fair competition, 3) ensure adequate consumer and investor protection as well as market integrity, and 4) ensure financial stability. MiCA’s scope of application is broad and thus aims to affect the entire industry and not just the players who either deal with or offer cryptocurrency. According to MiCA, crypto asset services may only be offered by companies that (i) is domiciled in the EU, and (ii) has been granted permission as a provider of crypto asset services by the relevant supervisory authority, which in Denmark will be the Danish Financial Supervisory Authority. Crypto asset services are defined in MiCA as one or more of the following activities: Escrow and management of crypto assets on behalf of third parties Operation of a trading platform for crypto assets Exchange between crypto asset and fiat currency Exchange between crypto-assets and other crypto-assets Execution of orders relating to cryptoassets on behalf of third parties Location of crypto assets Receiving and transmitting orders relating to crypto assets on behalf of third parties Advice on crypto-assets In MiCA, a distinction is also made between three subcategories of cryptoassets: Asset-based tokens (ART), the purpose of which is to maintain a stable value by referring to the value of several fiat currencies (legal tender such as Danish kroner), one or more commodities (e.g. copper), one or more cryptoassets (e.g. Bitcoin) , or a combination thereof. E-money token (EMT), whose primary purpose is to act as a means of payment. The intention is to maintain a stable value by referring to a fiat currency (legal tender). All other crypto-assets that
Repossession of sold goods that have been handed over to the buyer due to non-compliance with the (payment) agreement
Even if the buyer defaults on the payment of an item, according to the provisions of the Sales Act, the seller does not have the option to cancel the purchase and demand the return of the item once the item has been physically handed over to the buyer. A special exception to this, however, applies in the situation where the seller has taken a reservation of title. A retention of title is a clause that can be included in a purchase agreement for the sale of any (movable) item, including for example a car, a boat, a house or something else entirely. A sale with retention of title implies that the buyer only owns the goods when the conditions in the purchase agreement have been met. In other words, the purpose of the retention of title is that the seller can take back the sold item if it turns out that the buyer subsequently does not comply with the purchase agreement. Even if the buyer owes money to other creditors, the retention of title also ensures that the creditors do not thereby get their receivables back in the sold item. Form requirements: There are a number of conditions that must be met before the retention of title is valid. In this connection, a distinction is made between consumer and business purchases. Consumer purchase means a purchase that a consumer makes from a trader. The following conditions apply here: The retention of title must be included in a signed purchase contract, where it is clearly stated which goods are subject to retention of title. The requirement for clarity implies that the seller cannot, as a rule, reserve the right of ownership of the goods by a provision in his general terms and conditions of business and delivery. The retention of title must be agreed upon at the latest when the sold item is handed over. A stamp on the invoice after handing over the goods to the buyer is therefore not sufficient. The total purchase price must exceed DKK 2,000. Here is understood the sum of a payment and the total costs in connection with the credit purchase. A fixed installment plan must be agreed upon. The retention of title cannot therefore take place in accordance with an agreement with a variable loan amount. The seller must pay at least 20% of the cash price at the latest when the goods are handed over. Here is understood the price for which the item could have been purchased against cash payment from the seller. Business purchases are purchases where both buyer and seller act as part of their business. The conditions for a valid retention of title are largely the same as in consumer purchases, but where there is no requirement that the seller must be in full payment for at least 20% of the cash price at the latest upon handing over the goods. In addition to the conditions listed above, a so-called “security deed” can also be attached to the item. The security deed is the action (deed) that is carried out to ensure that the seller’s right is protected against the buyer’s creditors or contract purchasers regarding the sold item. As a general rule, no security deed is attached to a retention of title, whether it is a consumer or business purchase. A significant exception to this, however, is in particular motor vehicles, where the retention of title must be registered in the vehicle register in order to obtain protection against the buyer’s creditors and contract purchasers. The repossession: If it can subsequently be established that the buyer unfortunately does not fulfill the conditions of the purchase contract, including in particular the payment, the seller can request the return of the sold item with the help of the bailiff, if the conditions stated above are met. When calculating his receivables in the bailiff’s court, the seller can include: The unpaid part of the claim less credit costs for the unused part of the credit period default interest, and necessary costs of the repossession, including collection costs, court fees and other court costs awarded by the bailiff If the buyer pays the overdue services, arrears interest and any costs before the item sold has been taken back, the seller cannot take the item back. If you want help in connection with the purchase and sale of goods with retention of title, our office is available to provide advice. We help you, regardless of whether you are a buyer, seller or a third party. By lawyer Dennis Brixen Brandt
Generational change in times of crisis
Plan the generational change in good time, especially in times of crisis The general recommendation for generational change is to always start the preparations well in advance. With the right transfer structure, you can save both money and, not least, trouble. In the event of a planned change of generations, you can make use of various transfer methods, including: Transfer by gift (in whole or in part). Transfer in connection with restructuring. Transfer with tax succession (acquirer enters the tax position of the owner). Many of the reasons that are usually at play when considering restructuring your company also apply, of course, even if there are times of crisis. It may be because a generational change awaits, because you want to separate an activity with a high risk, or because you want a better structure in the company. In certain cases, the crisis can concretely increase the need for or desire to restructure. Tax matters Tax succession at company and shareholder level may be preferable to transfer taxation. Especially in times of crisis, it should be considered together with one’s adviser whether it would be advantageous to make the restructuring taxable. If there is a need to restructure as part of the generational change, the lower values will reduce the need for the restructuring to take place tax-free. If the restructuring is not to take place tax-free, the restrictions that a tax-free restructuring would otherwise entail can be avoided. Eg. will be able to save a lot of time for carrying out the generational change if the holding requirement can be avoided for 3 years after a tax-free restructuring. Risky business The crisis can also change the assessment of what constitutes a risky company, and thus increase the focus on separating companies into several different independent units. If you have clear expectations in good time that one business branch will do well, while another business branch is challenged in terms of earnings, an early restructuring will be able to separate the two businesses and thus remove the risk of the unhealthy business dragging down the healthy business . If you want the restructuring to take place tax-free, it is important to be in good time so that there are no large deficits or losses that are lost in connection with the restructuring. If a company is under pressure from the economy, so that the company’s existence is threatened, the owners may want to consider whether, through a reconstruction, it is possible that the healthy part of the company’s business can continue. If the crisis is so serious that the company’s existence is threatened, it is rarely a good idea to carry out restructuring tax-free – especially if the profits found during the restructuring can be deducted from otherwise unused losses that will be lost in a tax-free restructuring. In these cases, it will often be most appropriate to sell the healthy part of the company to a new company. Depending on how serious the company’s situation is, such a reconstruction must also keep an eye on the insolvency law rules. The ownership structure Changes in ownership structure, e.g. in connection with the transfer of a company to the next generation, requires thorough preparation, not least in times of crisis. In the case of a generational change, the ownership structure can be changed at once or in several stages. The different forms of generational change all have both advantages and disadvantages and therefore require careful consideration. Here, it is important to consider both the economy, tax, law and the management aspects thereof. Need advice? If you need advice about the change of generations and the tax matters, contact us for a non-binding chat about how we can assist in ensuring the best possible transfer from one generation to the next. You can contact us on phone 5663 4466 or by email kontakt@dslaw.dk .
DreistStorgaard Advokater is busy in the energy area and is strengthening the energy team
In recent months, DreistStorgaard has advised on several transactions in the energy field. In December, we assisted with the sale of Viking Energi A/S to Kosan Gas A/S, which is owned by the American UGI International group – read more here. Most recently, in January, we assisted the sellers of Ringsted Biogas ApS with the sale to BioCirc ApS, which with Ringsted Biogas ApS adds a fifth biogas plant to the portfolio. BioCirc ApS is a joint venture between the asset manager Maigaard & Molbech and European Energy. The sale of Ringsted Biogas ApS was made in collaboration with Boje & Ladekjær, who, among other things, mention the transaction here . Recently, DreistStorgaard has added significant new resources and skills to the energy team, i.a. partner Martin Skovbjerg, who came from the law firm Magnusson. Before that, Martin has a past as long-standing global chief legal officer at the Danish energy sector company Welltec, which makes high-tech solutions for the industrial sector, including oil, gas and geothermal, as well as experience from Rolls Royce Industrial Power. Martin therefore has extensive experience with the energy sector’s legal and tax matters as well as transactions in this industry, incl. financing. In addition, the other partners in DreistStorgaard’s M&A team, Svend-Aage Dreist Hansen, Søren Storgaard and Nikolaj Juhl Hansen, have extensive experience in the energy field and have assisted clients in this area for a number of years. Nikolaj Juhl Hansen has worked in the energy area both at Magnusson and the English law firms Travers Smith and Eversheds Sutherland, where he was part of the global energy team. DreistStorgaard’s managing partner Svend-Aage Dreist Hansen says: “The energy area has long been an important business area for us; both with a general focus on the green transition and of course on the energy crisis, which as a result of the war in Ukraine has led to a sharp increase in the number of cases in this area. It is therefore fantastic that we now have a team of highly experienced people who can help our clients navigate the development and operational phases as well as assist with transactions. It is an area that we expect a lot from in the coming years”. The energy area at DreistStorgaard The team has extensive knowledge, experience and competences to be able to advise precisely within the Energy area, and advises e.g. in connection with: Development and construction of plants, operation and maintenance within wind power, gas, P2X, biogas, district heating, geothermal energy and oil & gas pipelines Drafting and commenting on FIDIC contracts Contract management in relation to ongoing compliance with FIDIC or other relevant regulations, assessment and negotiation in relation to bidding, financing, M&A and investment transactions, disputes, Assessment of transactions and public procurement in the energy sector in relation to FDI rules and international sanctions Assessment of communication in relation to the greenwashing rules ( Article on Greenwashing ) IP protection (protection and enforcement of trademarks and patents, as well as other forms of technology protection) Technological development projects, incl. Sponsored and Joint Venture development projects Environmental permits and planning legislation Port rental projects (onshore support operations) Health & Safety Offshore (Health & Safety Offshore) Standard contracts Risk management Tax matters If you need advice in the area of energy, do not hesitate to contact us on telephone 5663 4466 or send an email to kontakt@dslaw.dk .
When can a developer cancel a construction agreement when AB18 has been agreed?
In 2018, the General Conditions for Works and Deliveries in Construction and Construction (also called AB) were revised and in 2019 it entered into force as AB18. In connection with the revision, several new paragraphs were added and others were clarified. A construction agreement is usually a very burdensome agreement for the parties, which partly involves many hours of work and a lot of money. It is precisely for this reason that it is important that the parties pay special attention to their rights and duties. This may be a contributing factor to the fact that many business operators in contracting relationships choose to enter into the agreement on AB terms. It ensures uniformity and transparency in rights and obligations, right from tender to handover and a good amount of time afterwards. Crunch in the relationship As in all types of contractual relationships, major challenges of one kind or another can arise within contracts, which make one of the parties want to get out of the agreement. As a starting point, it must be said that it is often in the interest of all parties to try to resolve conflicts amicably without canceling the agreement, which the AB terms also encourage. Sometimes situations can arise that mean that the only reasonable way out is to cancel the agreement. However, it is not entirely clear in which situations one enjoys this right and the consequences of an incorrectly made decision can be great. The developer’s right to terminate a construction agreement The developer has the right to terminate a construction agreement if one of four conditions is met. The four conditions can be summarized as follows: Delay in the execution of the work of considerable disadvantage Other delay of decisive importance The lack of quality of the work and a justified belief that the contractor will not be able to remedy the deficiencies satisfactorily Other material breach Although it seems like four simple conditions, it is far from practical. It can be difficult to say with certainty whether a point in the contractual relationship falls under one of these conditions. It must be said that it depends on specific assessments from case to case. What is fixed is; If the moment concerns a financial disadvantage, a client does not have the right to terminate the contractual relationship if the client can be satisfied in another way, e.g. through security provided or similar. The consequence of canceling the agreement If a developer rightfully cancels the agreement, his compensation claim against the other party could contain several parameters. It could, for example, be costs for completing the contract, costs for conversion of work already carried out and in glaring cases where the work already carried out is of such poor quality that it is not usable, the client will be able to demand repayment of the contract sum already paid. On the other hand, the consequence for a client who withdraws unjustifiably is that the other party will be able to claim his loss covered by not being able to complete the work minus any savings, i.e. after so-called negative contractual interest. A wrong decision can therefore be costly. Counseling When a developer can cancel a construction agreement can be difficult to determine and have major financial consequences if you make the wrong choice. It therefore requires careful consideration and not least a thorough review of the legal basis. We advise in all parts of the contract’s lifetime, both in good times, but not least when challenges and disputes arise between the parties. Do not hesitate to contact us for an informal chat about how you can best deal with disagreements and disputes. Contact us on phone 56 63 44 66 or by email kontakt@dslaw.dk. By solicitor Nicolai Christiansen
