[Berlin/Cologne, ] Creditors of HETA ASSET RESOLUTION AG (HETA) entered into a lock-up agreement on Tuesday 15 December 2015. The parties to this agreement hold and/or control debt instruments amounting to about EUR 5.11 billion.
The basis for the agreement is the supplement to the Austrian Financial Market Stability Act (FinStaG) that took effect on 6 November 2015. As adopted, § 2a FinStaG creates the legal conditions for a tender offer to be made to the creditors of HETA to repurchase debt instruments and contains a so-called cram-down mechanism that prejudices a minority of creditors rejecting the repurchase offer. Under this cram-down mechanism the claims of a minority creditor who refuses the repurchase offer are treated economically as if that creditor had accepted the repurchase offer. The approval of two-thirds of all of the creditors covered by the repurchase offer is a precondition for the validity of a repurchase offer and is a trigger for the cram-down mechanism.
In the lock-up agreement the contracting parties undertook to refrain from accepting any FinStaG repurchase offer that does not result in full satisfaction of their claims. Accordingly, the parties to the lock-up agreement assume that any repurchase offer that is under par value will fail, since the debt instruments covered by the lock-up agreement in the amount of EUR 5.11 billion likely amount to more than one third of all of the HETA debt instruments.
The par investor pool, consisting of 14 well-known investors from Germany and other European countries, participated in this agreement and was advised by GÖRG Partnerschaft von Rechtsanwälten mbB in the accompanying negotiations. The par investor pool holds debt instruments asserted against HETA in the amount of about EUR 1.5 billion. The spokesperson for the pool is Dexia Kommunalbank Deutschland AG, which holds a claim amount of EUR 395 million and is the largest single creditor in the pool.
The creditors (banks, in particular mortgage-lending institutions, insurers, asset managers and public corporations), which are organised in the pool under a pool agreement, hold about EUR 1.5 billion in notes and debt instruments issued by HETA (or its predecessor) in the years 2002 to 2007. Alongside HETA, the Province of Carinthia and/or Kärntner Landesholding are liable for the claims of the creditors on the basis of a statutory liability guarantee.
GÖRG already oversaw the formation of the creditors into a pool and together with the Austrian law firm DORDA BRUGGER JORDIS Rechtsanwälte GmbH, Vienna, advised the creditors on the collective defence of their rights in Austria in “objection” proceedings brought there against the moratorium imposed by the Financial Market Authority on 1 March 2015. GÖRG also acted for the par investor pool to bring an action for payment against HETA in the amount of about EUR 940 million before the Frankfurt Regional Court on 15 July 2015.
Advisors to the par investor pool
GÖRG Partnerschaft von Rechtsanwälten mbB
Dr. Roland Hoffmann-Theinert, Partner, Banking/Lead, Berlin/Frankfurt
Dr. Christian Bärenz, Partner, Restructuring, Cologne
Dr. Yorick Ruland, Partner, Banking, Cologne
Dr. Anne Laspeyres, Associate, Restructuring, Cologne
Dr. Christoph Kunze, LL.M., Associate, Banking/Corporate, Berlin
Cooperation partner in Austria DORDA BRUGGER JORDIS Rechtsanwälte GmbH, Vienna
Dr. Andreas Zahradnik, Partner, Banking
Dr. Bernhard Müller, Partner, Business Adminstrative Law
Mag. Christian Schöller, Associate, Banking/Restructuring