The Legal 500

The mergers (incl. takeovers) and de-mergers (spin-offs and splits) as well as the share transfers and business (going concern) transfers are regulated on a general level by the Commerce Act.

What is the relevant merger control legislation? Is there any pending legislation that would affect or amend the current merger control rules described below?

I. General Rules The Bulgarian Public Procurement Act provides for several types of procedures that can be used by the procuring entities for the award of public contracts. Those procedures are:

VOLUNTARY TENDER OFFER TO DELIST A COMPANY. SQUEEZE-OUT AND SELL-OUT. PRICE OF A TENDER OFFER.

by Damian Simeonov, Partner

Until August 2011 the Bulgarian criminal law had not covered bribes or other unlawful means of influencing the course or outcome of sport competitions. But the new sport crime legislation foresees punishments of up to 10 years imprisonment and up to a EUR 15,000 fine, depending on the gravity of the offence.

Antitrust law

Types of vertical restraint

Legal objective

Responsible authorities

Jurisdiction

Finally, after two years of active involvement of Penkov, Markov & Partners - Attorneys at Law, as assigned by the American Chamber of Commerce in Bulgaria and with the participation of the Bulgarian Chamber of Commerce and Industry, the Bulgarian Industrial Association and the Confederation of Employers and Industrialists in Bulgaria, in drafting and development of proposals for amendments to the regime of commercial registration, directed at overcoming the omissions and inconsistencies in the current legislation, our efforts were crowned with success, as with the newest legislative amendments most of the NGOs suggestions were adopted.

For many years, for known and unknown reasons, and in gross inconsistency with EU requirements, the state has (not) been dealing with the betterment of the investment climate and in particular, with the development of this sector. Its actions have been rather shy and non-transparent for citizens and the relevant branch organizations and other non-governmental organizations showing interest in the issue alike.

Development of market relations and diversification of involvement in economic life have increasingly raised questions about different aspects of the participation of non-profit organizations, such as associations, foundations, etc. in economic activities.

1 Recent Developments in European Product Liability – Ian Dodds-Smith & Alison Brown, Arnold & Porter (UK) LLP 1
2 The EU General Product Safety Regime – John Meltzer & Rod Freeman, Hogan Lovells International LLP 5
3 Update on U.S. Product Liability Law – Sara J. Gourley & Sherry A. Knutson, Sidley Austin LLP 13
4 International Electronic Discovery – Nicole B. Boehler, Carroll, Burdick & McDonough International LLP 19

The Hague Convention abolishing the Requirement of Legalisation for Foreign Public Documents (the Convention)[1], signed in 1961 and having the purpose to ease the recognition of documents from one contracting party/state in another, entered into force for Bulgaria on 30^th April 2001.

During recent years the question of the admissibility of temporary agency work contracts between two legal persons has been raised ever more frequently.

A radical amendment to the Bulgarian Commercial Act has been recently introduced. The minimum capital amount required for the registration of a Limited Liability Company in Bulgaria has been decreased from BGN 5,000 to the symbolic amount of BGN 2. In other words one can register a company with a capital of EUR 1 only.

This article focuses only on cases of commercial transactions for transfer of registered shares and the right to acquire them, respectively. Cases of transferring bearer shares, as well as dematerialised shares, will not be a matter of review in this article. Irrefutably, the transfer of shares is a commercial transaction as defined by the Commerce Act. However, in order for the title over the registered materialised share to be validly transferred to the new transferee, a unilateral statement of will should be made by the transferor by way of an endorsement. The endorsement, itself, is not a component of the factual elements contained in the contract for purchase and sale of a given registered share but constitutes a separate formal abstract transaction.

A practical insight to cross-border Mergers and Acquisitions.

The recent changes in the Bulgarian Investment Promotion Act (amend. as of 2nd of June, 2009) that are in compliance with the requirments under the Regulation (EC) No 800/2008 facilitate the implementation of significant investment projects in Bulgaria. Prior to the recent legislative changes promotional measures used to be applied to investment projects in the following economic sectors only:(a) Industrial sectors: manufacturing industry and production of electricity from renewable energy sources; and (b) Service sectors: high technology activities in computer technologies, research and development, as well as education and human health care.

The Bulgarian public M&A market remains underdeveloped. The key reasons for this are the insufficient development of the securities market itself and the insignificant free float of public companies on the stock exchange (about 22% of the equity, on average). The limited free float means low market liquidity and makes it virtually impossible to accumulate considerable holdings in a company through offers to minority shareholders.

The main Bulgarian law regulating public procurement matters is the Public Procurement Act (PPA), in force as of 1 October 2004 adopted by the Bulgarian Parliament (promulgated in the official Bulgarian State Gazette, issue 28 of 2004, as amended from time to time).

Bulgaria has made a priority for itself the building of an information society as a basis for a modern and efficient economy of knowledge that encourages innovation and competitiveness. Building an information society is among the main targets of the Lisbon Strategy of 2000 where it is seen as a tool for creating more jobs and improving the social standing of citizens. Providing such services is considered a national and a European priority with a significant social charge.

A specificity in Bulgarian legislation is the existence of a trade representation office outside scope of the Commerce Act, and namely representation as set out in the Investment Promotion Act. This often leads to conflicting interpretations and lack of understanding with regard to the representation office’s exact status.

A practical insight to cross-border Cartels & Leniency

The primary legal act regulating bankruptcies and reorganisations of commercial companies is the Law on Commerce. Certain businesses, however, have their own specific legislation on the matter: bankruptcies and reorganisations of banks are regulated by the Law on Bank Insolvency; insurers – by the Insurance Code; and pension funds and pension fund managing companies – by the Social Security Code.

Despite the fact that the Bulgarian public M&A market has grown substantially in 2007, it still remains underdeveloped. The key reason for this is the insufficient development of the securities market itself and the insignificant free float of public companies on the Stock Exchange (about 21% of the equity on average). The limited free float entails low market liquidity and the virtual impossibility of accumulating considerable holdings through offers to the minority shareholders.

High growth rates and the development of Bulgarian market stimulate the progressively increasing number of mergers and acquisitions. Bulgaria's accession to the European Union is an additional stimulus spurring M&A dealings, regardless of the developments on global financial markets.

The need for ensuring free trade on the Community market has called for providing the companies trading on the European internal market with the freedom to reorganize at the Community level, while safeguarding their freedom to move their business operations and head office from one Member State to another and thus operate freely within the EU. This has been achieved through the establishment of a new legal form for the existence of undertakings, i.e. the European company or, as it is called in Latin, Societas Europaea /SE/.