News and Press - Lawyers Attorneys MTR Rechtsanwälte Germany - Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart https://www.mtrlegal.com/en/ News and Press releases of Lawyers Attorneys MTR Rechtsanwaltsgesellschaft mbH Germany Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart en MTR Rechtsanwaltsgesellschaft mbH Mon, 13 Jul 2020 13:14:14 +0200 Mon, 13 Jul 2020 13:14:14 +0200 TYPO3 news-205 Mon, 13 Jul 2020 09:26:51 +0200 International procedural law in cases involving cross-border litigation https://www.mtrlegal.com/en/news-and-press/detail/news/international-procedural-law-in-cases-involving-cross-border-litigation.html With the increasing internationalization of many areas of life, international procedural law is playing an ever more important role in legal disputes.

Globalization, internationalization, and European integration have transformed many areas of life. This is equally true for private life as it is for commercial life. Naturally, they have also had an impact on case-law dealing with cross-border litigation. We at the commercial law firm MTR Rechtsanwälte note that both a thorough understanding of international rules and regulations as well as expertise in the field of international procedural law are necessary in this context.

Internationalization has implications for nearly every field of law, whether it is concerned with regulating commercial and business relationships or private life, e.g. divorces in cases involving international marriages or inheritance matters with a foreign connection.

For the purpose of resolving cross-border disputes, whether domestic regulations or legislation from the other country applies is, of course, highly significant. The choice of jurisdiction may be important as well. International procedural law also attaches great importance to the service of documents. These can serve as the basis for initiating court proceedings or set in motion important time limits. By serving a document, the recipient is given the chance to acknowledge it and the sender is entitled to proof of said acknowledgment.

The service of judicial and extrajudicial documents within the European Union is governed by Regulation (EC) No. 1393/2007, the application of which is not limited to civil and commercial affairs but also extends to family matters and insolvency proceedings. Alternatively, the service of documents can take place according to the Hague Service Convention. Unlike Regulation (EC) No. 1393/2007, this requires the service of documents to be accompanied by a translation. In most cases, a translation of the complaint or petition is sufficient.

The coronavirus pandemic is expected to give rise to an increase in the number of international legal disputes due to business partners not being able to fulfill their contractual obligations. In this context, international procedural law assumes even greater significance, with the proper service of documents having a major impact on the course of litigation. Lawyers with experience in the field of international procedural law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/litigation/service-of-process.html

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Internationales ProzessrechtPressemitteilungen
news-203 Tue, 07 Jul 2020 18:55:06 +0200 Marc Klaas at MTR Rechtsanwälte ranked among “Best M&A Lawyers” https://www.mtrlegal.com/en/news-and-press/detail/news/marc-klaas-at-mtr-rechtsanwaelte-ranked-among-best-ma-lawyers.html The German business newspaper Handelsblatt has published its list of “Germany’s best lawyers in 2020,” featuring Marc Klaas at MTR Rechtsanwälte in the category “mergers and acquisitions.”

Each year, Handelsblatt identifies the best lawyers in various legal fields in collaboration with the U.S. publisher Best Lawyers. This distinction is one that lawyers particularly prize, as it shows that their skills and expertise are recognized and held in high esteem not only by colleagues at their own law firm but also those from other firms.

To determine who the “best lawyers” are, Best Lawyers conducts surveys asking lawyers about the reputation of their colleagues, including which of them from other law firms are particularly highly rated and which attorney they would recommend if they found themselves unable to accept a brief. Marc Klaas’ inclusion in Best Lawyers’ ranking for mergers and acquisitions thus represents a vote of confidence in not only Marc himself but also the entire team at MTR Rechtsanwälte.

At the same time, the work of an attorney, especially in the field of M&A, has undergone massive changes in recent weeks due to the coronavirus pandemic. Where once traveling across the world to stitch together and supervise deals locally was commonplace, this is now no longer possible due to COVID-19. Telephone and video conferencing have since replaced flights, hotel rooms, and conference halls as mainstays of working life. And yet it has been shown in times of crisis and restrictions on contact that it remains possible to serve clients with the same level of quality and intensity despite all the challenges.

The crisis surrounding the coronavirus has brought changes to the work of attorneys. Naturally, it has also left its mark on corporate mergers and acquisitions, though this sector too will experience an upturn in time.

Marc Klaas and MTR Rechtsanwälte are focused both during and after the pandemic on advising their clients in confidence and preparing for transactions, assessing the risks, and drafting watertight agreements.

For more information:

https://www.mtrlegal.com/en/legal-advice/ma.html

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M&APressemitteilungen
news-202 Fri, 03 Jul 2020 17:39:32 +0200 Real estate funds – Impact of COVID-19 https://www.mtrlegal.com/en/news-and-press/detail/news/real-estate-funds-impact-of-covid-19.html A lot of real estate funds were hit hard by the 2008 financial crisis. Today, many investors are faced with the question of how stable their holdings in real estate funds are given the crisis surrounding the coronavirus.

Real estate and real estate funds are considered by many investors to be a safe investment. Yet even this supposedly safe bet cannot weather crises unscathed. We at the commercial law firm MTR Rechtsanwälte can report that the 2008 financial crisis resulted in open-ended real estate funds, in particular, experiencing major financial difficulties, with investors suffering losses.

Today, open-ended real estate funds are structured differently, with a two-year holding period and a one-year notice period preventing investors from withdrawing major stakes in their holdings within a short timeframe. The coronavirus pandemic may nonetheless be a source of problems for real estate funds. The longer the crisis continues, the greater the risk of missing rent payments or vacancies. Properties may fall in value, with this ultimately impacting fund returns and profitability.

How, for instance, the commercial, catering, and hotel sectors will weather the coronavirus crisis remains to be seen. Insolvencies are to be expected. This may result in vacant stores and properties. Under such circumstances, it is doubtful whether the current rental prices can be maintained if there are fresh negotiations.

A decrease in the number of business trips together with greater adoption of technical solutions, such as video conferences, is also to be expected going forward. There would be a drop in the demand for hotel rooms.

Within a short period of time, these developments would have an effect on real estate funds as well. A lot of these funds include investments in hotel, catering, and office buildings. Decreasing rental income or vacancies could put the profitability of funds at risk.

Repercussions of the coronavirus crisis also cannot be ruled out for the private housing market. Real estate funds should anticipate the possibility of decreasing rental income in this sector as well.

For anyone investing in real estate funds, this means their hopes of a reasonable rate of return might not be realized and that their investment is by no means as safe as it was portrayed at the time of their consultation. That being said, investors are entitled to receive adequate investment advice. This includes information about the risks associated with the investment in question, especially as regards the risk of the investment being written off.

Failure to provide this information may give rise to claims for damages. Lawyers with experience in the field of capital markets law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/capital-markets-law/real-estate-funds.html

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ImmobilienfondsPressemitteilungen
news-200 Thu, 02 Jul 2020 08:52:00 +0200 Commercial Agency Law: COVID-19, Commission & Contract Design https://www.mtrlegal.com/en/news-and-press/detail/news/commercial-agency-law-covid-19-commission-contract-design.html The coronavirus crisis marks the beginning of difficult times for many commercial agents. It also raises a number of legal issues in connection with commission payments, claims for compensatory adjustment, etc.

Despite the effects of the coronavirus pandemic, commercial agents can still maintain contact with their clients via telephone, email, etc. Personal contact in the form of one-to-one meetings in familiar environments, on the other hand, is no longer feasible in most cases. This, of course, makes the work of commercial agents more difficult. Additionally, clients may shy away from new orders or cancel existing ones due to the uncertainty surrounding the coronavirus crisis.

We at the commercial law firm MTR Rechtsanwälte note that this not only has the potential to expose commercial agents to economic hardship, it also raises legal issues in relation to their clients.

To assist in weathering the economic storm whipped up by the coronavirus, commercial agents can, of course, check whether they might be eligible to benefit from measures included in the German government’s aid packages. Another possible avenue is to take a closer look at the legal relationship with their clients. If there is a lack of orders, how will this affect commission payments and claims for compensatory adjustment? Are commercial agents obligated to generate a specific volume of orders? Can they invoke force majeure citing the coronavirus crisis? In answering these questions, it is a good idea, in particular, to closely review the commercial agency agreements as well as the rights and obligations of the commercial agent, but also to analyze the company.

Of course, this is true not just in times of crisis but in general. The commercial agency agreement should set out the fundamentals in as much detail as possible. Commercial agents are entitled as a matter of principle during the term of the contract to receive commission payments for all the business deals and transactions that can be attributed to their activity. They may also be entitled to claim compensatory adjustment if the company maintains the business contacts facilitated by them even after the commercial agency agreement has come to an end. In this context, it is particularly important to consider international commercial agency law.

Commercial agents also ought to always be mindful of the issue of pseudo-self-employment. This status may apply to a commercial agent if they continuously work full-time or exclusively for one company.

Lawyers with experience in the field of commercial agency law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/commercial-law/commercial-agency-law.html

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PressemitteilungenHandelsvertreterrecht
news-197 Wed, 24 Jun 2020 15:33:53 +0200 Commercial tenancy law – The devil is in the detail https://www.mtrlegal.com/en/news-and-press/detail/news/commercial-tenancy-law-the-devil-is-in-the-detail.html There are a number of material differences between commercial tenancy law and tenancy law as it applies to private sector housing. The way in which leases for commercial premises are formulated is therefore a matter of particular importance.

Commercial tenancy law is not a field of law unto itself. As in the case of residential tenancy law, it is regulated by the provisions of the German Civil Code (Bürgerliches Gesetzbuch, BGB) dedicated to tenancy law. That being said, these reflect the legislature’s primary focus here on residential tenants and their protection, since they frequently find themselves in a weaker position in relation to landlords. By contrast, the landlord and tenant are assumed to be on an equal footing in commercial tenancy law. Consequently, neither party enjoys special protection. We at the commercial law firm MTR Rechtsanwälte note that this makes drafting detailed contracts all the more important.

At the same time, commercial tenancy law provides for extensive contractual freedom. The parties are responsible for individually addressing their respective rights and obligations in the lease. However, neither party is allowed to be unduly disadvantaged. Moreover, the principle of transparency needs to be observed. The content of clauses within the general terms and conditions is subject to review. Clauses that are ambiguous and opaque are often found to be void.

The level of contractual freedom afforded to the parties nonetheless grants them considerable leeway in drafting contracts, a key aspect of which is the contractual term. It is common for leases for commercial premises to be concluded for a fixed term. Particularly for the tenant, the commercial premises may be of great economic importance. That is why renewal clauses – including those that are unilateral – generally ought to be incorporated. However, in cases involving permanent contracts, it may be advisable to agree to notice periods that deviate from statutory provisions. For landlords, on the other hand, it is important to have arrangements in place for adjusting the rent.

Another important aspect is that both parties have a legal right to terminate the lease for good cause. What constitutes good cause ought to be set out in the contract as a matter of urgency. Having said that, ceasing commercial activity or experiencing economic hardship does not constitute good cause.

Many commercial leases are also currently being affected by the crisis surrounding the coronavirus. The legislature has determined that landlords are not allowed to terminate leases from April 1 to June 30 of 2020 on the basis of rent arrears. This is conditional on the coronavirus crisis being responsible for the tenant’s inability to pay rent. It should be noted, however, that the obligation to pay rent continues to apply. The payments will have to be made at a later date.

Lawyers with experience in the field of commercial tenancy law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/real-estate-and-property-law/commercial-law-of-tenancy-and-lease.html

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Gewerbliches MietrechtPressemitteilungen
news-195 Mon, 22 Jun 2020 09:14:00 +0200 Family law: Benefits of a prenup https://www.mtrlegal.com/en/news-and-press/detail/news/family-law-benefits-of-a-prenup.html A prenuptial agreement may not be romantic, but it does afford protection to spouses and allow all the major issues – including, of course, financial matters – to be clarified when times are good.

We at the law firm MTR Rechtsanwälte admit that when couples are planning to tie the knot, separation is unlikely to be at the forefront of their minds. A prenuptial agreement is perceived by many brides and grooms-to-be as unromantic, but it is in fact a key component of planning for the future. If it proves unnecessary, all the better; if, however, it does prove relevant, the couple will have been able to clarify all the major issues early on while they were still on good terms. It is also possible to enter into an agreement after the marriage has taken place.

Recent years have seen drastic changes to society and traditional roles. Family law has not always been able to keep pace with these changes. In the absence of a prenuptial agreement, the marriage is subject to the standard statutory rules. Aspects such as the equalization of accrued gains, separation of property, alimony, and visitation rights can be addressed individually in the prenuptial agreement. The aim is to achieve a fair distribution among the spouses such that they both find themselves in a stable financial situation.

A prenuptial agreement can have far-reaching consequences, with its impact extending from the equalization of accrued gains, to maintenance and pension entitlements, through to succession. For this reason, a prenuptial agreement should always be fair and not unduly disadvantage either spouse, otherwise the agreement is contra bonos mores and therefore null and void, as in the case that came before the Oberlandesgericht (OLG) Oldenburg (Az.: 3 W 21/17 (NL)).

In the case in question, the wife had waived the equalization of accrued gains and a portion of her husband’s pension entitlement in the notarized prenuptial agreement. In addition, her right to maintenance was severely restricted. Following the death of her husband, she nonetheless asserted a claim for equalization of accrued gains that succeeded before the OLG Oldenburg.

The wife was said to have been unduly disadvantaged by the prenuptial agreement and her predicament exploited. The court noted that at the time she was an apprentice at the workplace of her husband – a man twenty years her senior – and also heavily pregnant. It went on to state that she must have anticipated that the marriage would not have taken place were it not for the agreement. Moreover, she was said to be at a significant disadvantage vis-à-vis her husband in terms of life experience and education at the time. The OLG declared the prenuptial agreement null and void, ruling that the couple had been living under the matrimonial property regime according to which accrued gains are held in joint ownership.

Lawyers with experience in the field of family law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/private-clients/family-law.html

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FamilienrechtPressemitteilungen
news-193 Mon, 15 Jun 2020 21:16:00 +0200 Compliance – Preventing economic loss https://www.mtrlegal.com/en/news-and-press/detail/news/compliance-preventing-economic-loss.html Compliance is an important topic not only for large corporations but also small and medium-sized enterprises that want to avoid breaking the law and incurring penalties as a result.

Compliance with contractual provisions and legislation is a key issue for every business, irrespective of its size. Businesses need to make sure that each of their employees consistently complies with the law. We at the commercial law firm MTR Rechtsanwälte note that efficient compliance management systems can ensure that violations are not committed by anyone from within the company.

It is particularly in difficult economic times that those in charge of companies will take any action to potentially save the business. The ongoing coronavirus pandemic has shed light on the speed with which a company can find itself in dire straits, even through no fault of its own.

Germany’s federal government has come up with a range of extensive support measures for businesses. Those seeking to benefit from these measures and apply for assistance must make sure that the information is accurate and complete. Anyone making false claims renders themselves liable to prosecution for potentially committing fraud, or more specifically subsidy fraud.

Of course, an effective compliance management system is essential not only during times of crisis but at any given time, and all the more so in the case of businesses that operate internationally and maintain cross-border business relationships. These businesses also need to comply with international regulations and are at greater risk of violating laws.

With small and medium-sized enterprises also increasingly operating internationally, the issue of compliance continues to grow in importance for them as well. Effective compliance management systems ensure that contractual provisions and statutory regulations are complied with and that no violations are committed by employees from within the company. However, such a system also needs to be tailored to a business’s specific needs and the various positions within the workplace lest it undermine the strengths of the company, such as, for instance, its flexibility.

A key point when it comes to compliance is understanding that it is not primarily concerned with surveillance and monitoring but instead mainly with preventing the business from incurring economic losses.

Lawyers with experience in the field of corporate criminal law can advise on implementing an effective compliance management system.

For more information:

https://www.mtrlegal.com/en/legal-advice/corporate-criminal-law/compliance.html

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CompliancePressemitteilungen
news-191 Fri, 12 Jun 2020 09:12:26 +0200 BFH: Only legacies and gifts from legal father enjoy privileged status https://www.mtrlegal.com/en/news-and-press/detail/news/bfh-only-legacies-and-gifts-from-legal-father-enjoy-privileged-status.html The legal father and the biological father may not be the same person. This has tax implications, as only legacies and gifts from the legal father fall under tax bracket I, the most favorable tax bracket.

A child or stepchild who inherits from his legal father will come under tax bracket I, the more favorable tax bracket. This also applies to gifts. We at the commercial law firm MTR Rechtsanwälte note that tax bracket I offers significant advantages over tax bracket III. A 75,000 euro legacy is subject to a 7 percent tax rate, whereas the latter figure is as high as 30 percent if tax bracket III is applied. There is also a large disparity between the tax allowances. Tax bracket I provides for a tax allowance of 400,000 euros for children, while the figure is only 20,000 euros for tax bracket III.

However, placement in the more favorable tax bracket I only happens in the case of legacies or gifts from the legal father. If the biological father is not the same person as the legal father, the less favorable tax bracket III applies to the legacy or gift in question. That was the verdict of Germany’s Federal Fiscal Court – the Bundesfinanzhof (“BFH” for short) – in a ruling from December 5, 2019 (Az. II R 5/17).

In the instant case, the plaintiff was the biological but not the legal father. He gave his biological daughter a gift of 30,000 euros and requested that the tax office apply the more favorable tax bracket I to her case. This was rejected, and the subsequent legal action ultimately failed at second instance before the Bundesfinanzhof.

The court held that the division of tax brackets according to section 15 para. 1 of the German Estate and Gift Tax Act (Erbschaftsteuer- und Schenkungsteuergesetz, ErbStG) is fundamentally informed by sections 1589 et seqq. of the German Civil Code (Bürgerliches Gesetzbuch, BGB) concerned with lineage and kinship, noting that a distinction is made here between the legal and biological father. The BFH went on to point out that only the legal father has responsibilities vis-à-vis the child, such as paying child support, and that a child is only entitled to inherit and claim the statutory share in relation to their legal father. The court ruled that this justified the privileged position of the legal father in terms of being placed in tax bracket I for the purposes of estate and gift tax, and that if this were also to apply to the biological father, this would put children whose biological and legal father are the same person in a better financial position.

Biological fathers ought to think about making optimal use of tax allowances in connection with legacies and gifts to their children. Lawyers with experience in the fields of trusts and estates law and tax law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/inheritance-tax.html

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ErbschaftssteuerPressemitteilungen
news-189 Mon, 01 Jun 2020 11:34:42 +0200 Changes to German stock corporation law due to COVID-19 – Virtual general meetings https://www.mtrlegal.com/en/news-and-press/detail/news/changes-to-german-stock-corporation-law-due-to-covid-19-virtual-general-meetings.html The impact of the coronavirus pandemic extends to German stock corporation law. To ensure that businesses remain capable of functioning effectively, stock corporations can now also hold virtual general meetings.

The general meeting is a key governing body within a German stock corporation that facilitates communication between the executive and supervisory boards and shareholders. Its primary function is to adopt resolutions. The German Stock Corporation Act (Aktiengesetz, AktG) provides that general meetings require personal attendance. The stock corporation’s governing bodies and shareholders or their representatives are supposed to convene in person, discuss issues, and pass important resolutions.

With the coronavirus still at large, it is virtually impossible to hold a general meeting that requires physical attendance. A number of corporations have postponed their 2020 annual general meeting indefinitely. This has resulted in important resolutions being shelved and a delay in dividend payments.

To ensure that businesses remain capable of functioning effectively despite the severe restrictions on gatherings due to the coronavirus pandemic, we at the commercial law firm MTR Rechtsanwälte can report that Germany’s federal government has made it possible for stock corporations to hold virtual general meetings.

Pursuant to a resolution of the executive board and subject to the approval of the supervisory board, a general meeting can be held online without the need for the shareholders to be physically present. This does not require an amendment to the articles of association. In addition, the notice period for calling a general meeting has been shortened from 30 to 21 days.

The executive board will also be able to arrange advance payments on the net profit, and the eight-month deadline is to be extended so that it will be possible for the general meeting to be conducted during the financial year.

Shareholders will only be able to participate electronically in the virtual general meeting. The plan is to enable them to exercise their voting rights through electronic participation or postal voting. A virtual general meeting nevertheless entails severe restrictions on shareholders’ rights. For instance, they lose their right to have the executive board respond to their questions and have to submit questions two days before the meeting. In this way, shareholders lose their right to information and, at the same time, the scope for challenging resolutions of the virtual general meeting is severely restricted.

The crisis surrounding the coronavirus has thus led executive and supervisory boards as well as shareholders into completely uncharted territory, which unsurprisingly raises legal issues. Lawyers with experience in the field of stock corporation law can advise stock corporations’ governing bodies and shareholders alike.

For more information:

https://www.mtrlegal.com/en/legal-advice/capital-markets-law/stock-corporation-law.html

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AktienrechtPressemitteilungen
news-185 Mon, 18 May 2020 09:57:28 +0200 Applying to register a trademark with no intention of using it – Abuse of injunction suits and damages claims https://www.mtrlegal.com/en/news-and-press/detail/news/applying-to-register-a-trademark-with-no-intention-of-using-it-abuse-of-injunction-suits-and-damag.html Anyone seeking to register a trademark should actually intend on using it. According to a ruling of Germany’s Federal Supreme Court, the Bundesgerichtshof (BGH), holding a trademark with the sole intention of asserting claims against third parties represents an abuse of the law.

It is only the proprietor of a trademark who benefits from trademark protection, i.e. only he may make use of the trademark. We at the commercial law firm MTR Rechtsanwälte note, however, that if the proprietor has no intention of using the trademark, then he no longer benefits from trademark protection.

Anyone sitting on trademarks with no serious intention of using them other than for the purposes of asserting injunction suits and damages claims against third parties in the event of trademark infringements is abusing the law and acting contrary to good faith. That was the verdict of the BGH in a ruling from October 23, 2019 (Az. I ZR 46/19).

In the instant case, the plaintiff had registered an EU trademark for lighting equipment, among other things, featuring the name of a well-known artist. The plaintiff is also the proprietor of eleven other EU word and figurative marks, each of which bears the names of famous artists.

The plaintiff issued the defendant with a formal warning for putting a lamp up for sale featuring the name of the artist in question, albeit in a different style from the registered trademark. The defendant reacted to the formal warning by withdrawing all offers for the lamp and issuing a cease-and-desist declaration backed by sanctions for contempt. A few weeks later, the plaintiff noticed that two past offers for the lamp could be viewed on a trading platform under two products codes. These offers could only be found by searching specifically for the respective product code. The plaintiff subsequently demanded that a contractual penalty be applied to the defendant for failing to ensure that the two offers had been deleted.

The action was unsuccessful, including before the BGH as the court of final instance. The court held that the plaintiff could not appeal to contractual rights arising from the cease-and-desist declarations, noting that the plaintiff had registered the trademark in dispute with no serious intention of using it other than for the purposes of inundating anyone using the sign with injunction suits and damages claims. The BGH went on to state that the plaintiff had abused its formal legal status as a trademark proprietor and acted contrary to good faith.

Lawyers with experience in the field of trademark law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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IP RechtPressemitteilungen
news-180 Thu, 30 Apr 2020 14:38:21 +0200 COVID-19 – Bundestag gives green light to multi-billion-euro aid package https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-bundestag-gives-green-light-to-multi-billion-euro-aid-package.html On March 25, 2020, Germany’s lower house of parliament, the Bundestag, approved a multi-billion-euro aid package to manage the economic impact of the coronavirus crisis and gave the green light to the supplementary budget.

The crisis surrounding the coronavirus is hitting the economy hard. Not wanting to leave businesses and the self-employed to fend for themselves in responding to its economic impact, the federal government has come up with an extensive package of protective measures. On March 25, 2020, the Bundestag approved the supplementary budget and freed up 156 billion euros in financial resources. An economic stabilization fund worth 600 billion euros was also adopted, with this even overruling the debt ceiling. While it is equally necessary for Germany’s upper house of parliament, the Bundesrat, to give its approval on March 27, this is seen as a certainty.

Larger businesses will be able to benefit from the federal government’s comprehensive 600-billion-euro support package. The government wants to provide important guarantees to businesses and even take companies either wholly or partially into public ownership if necessary. Should it come to that, the plan is for the companies to be privatized again at the end of the crisis. However, it is by no means possible for every business to receive assistance under this support package, it only being intended for businesses with high turnover and at least 250 workers. Smaller firms that play a key role in relation to infrastructure may also potentially be covered.

Other small firms and the self-employed, on the other hand, can expect to receive direct grants. A total of 50 billion euros has been allocated for this purpose, with the money to be channeled through the federal states.

Moreover, it is possible to take out a loan with the German state-owned development bank, the KfW, which has prepared various programs. Businesses can also apply, for instance, for tax relief and a deferral of tax payments.

All these measures are designed to maintain companies’ liquidity to ensure that they weather the coronavirus crisis. Of course, there are many other pressing legal issues that need to be addressed in addition to the much-needed financial assistance. What happens if it is not possible to render contractual performance? Can social security contributions be deferred? What are the implications of the coronavirus pandemic for capital markets, and what action can banks, stock corporations, foundations, and family offices take to counter this?

We at the interdisciplinary commercial law firm MTR Rechtsanwälte are able to serve as a single point of contact for expert advice and solutions on how best to respond to the coronavirus crisis.

For more information:

https://www.mtrlegal.com/en/legal-advice/corona.html

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CoronaPressemitteilungen
news-179 Thu, 30 Apr 2020 14:32:26 +0200 COVID-19 and changes to business law https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-and-changes-to-business-law.html Germany’s lower and upper houses of parliament have passed the federal government’s package of measures designed to tackle the crisis surrounding the coronavirus and assist others in overcoming its economic impact.

The coronavirus pandemic is having a substantial impact on the overall economy. The Gesetz zur Abmilderung der Folgen der COVID-19-Pandemie (Act to Mitigate the Effects of the COVID-19 Pandemic) introduces major legal changes. We at the commercial law firm MTR Rechtsanwälte can report that these changes also affect business law.

The scope of the measures ranges from short-time allowance (Kurzarbeitergeld), loans and rescue funds, to changes to insolvency law and company law. In addition to preserving the business and jobs as well as ensuring liquidity, it is necessary for companies’ decision-making capacity to be maintained.

To ensure that important decisions can still be taken in times of crisis, the federal government has also strengthened the capacity of businesses, cooperatives, homeowners’ associations, as well as other associations, to act and make decisions. Moreover, stock corporations will now be able to hold virtual annual general meetings.

To ensure that companies remain able to act and make decisions, the legislation provides for new ways of conducting annual general meetings in stock corporations (Aktiengesellschaft, AG), commercial partnerships limited by shares (Kommanditgesellschaft auf Aktien, KGaA), mutual insurance companies (Versicherungsvereins a.G., VVaG), and European companies – also known as a “Societas Europaea” (SE for short) – shareholders’ meetings in limited liability companies (GmbH), general meetings and representatives’ assemblies in cooperatives, and members’ meetings in associations. In the case of the AG, KGaA, and SE, for instance, it will be possible to participate in the annual general meeting online without the need for authorization pursuant to the articles of association. The legislation also allows annual general meetings to be held remotely.

Furthermore, it will be possible to reduce the notice period to 21 days. The board of directors will be able to arrange advance payments on the net profit, even in the absence of provisions to this effect in the articles of association.

The annual general meeting is to be held within the financial year, which represents an extension to the previous eight-month deadline. Since virtual annual general meetings without compulsory attendance are uncharted territory, the risk of legal challenges will be largely excluded.

The plans also feature comparable measures to facilitate virtual meetings and decision-making mechanisms that take place outside of meetings for associations and cooperatives.

Germany’s Federal Financial Supervisory Authority, the BaFin, is also revising its supervisory role in response to the circumstances brought about by the coronavirus pandemic, including, for example, with regards to the disclosure of financial circumstances when grading creditworthiness, as well as with respect to obligations pertaining to conduct and information in securities trading.

Lawyers with experience in the field of business law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/business-law/corona-and-business-law.html

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Corona und WirtschaftsrechtPressemitteilungen
news-175 Mon, 27 Apr 2020 12:00:19 +0200 Contract law and force majeure amidst the coronavirus crisis https://www.mtrlegal.com/en/news-and-press/detail/news/contract-law-and-force-majeure-amidst-the-coronavirus-crisis.html Many contracts cannot be performed due the coronavirus crisis. This raises the issue of liability, with “force majeure” taking center stage.

The coronavirus pandemic is hitting the economy hard. There are a number of reasons why it may no longer be possible to perform contracts, including broken supply chains, events being cancelled, or the inability to maintain normal production and provide services. This raises the issue of liability, with force majeure taking center stage in a lot of cases.

Of course, the first question is how does one define force majeure? According to a ruling of Germany’s Federal Supreme Court, the Bundesgerichtshof (BGH), from May 16, 2017, force majeure is constituted by an external event with no operational connection that cannot be avoided even by exercising the utmost care that can reasonably be expected (Az.: X ZR 142/15). This does not mean, however, that contracts automatically become obsolete because of the crisis surrounding the coronavirus. We at the commercial law firm MTR Rechtsanwälte note that it ultimately comes down to the specific contractual provisions in individual cases and whether they include clauses dealing with force majeure.

But even if force majeure clauses have been contractually agreed, this does not necessarily mean that the provisions in question also cover pandemics, quarantines, etc. As such, it is necessary to examine whether the contractual arrangements are relevant.

In the absence of relevant clauses, the issue of whether force majeure comes into play can also turn on which country’s national laws apply. This is particularly important in cases involving international contracts.

German law provides for the exclusion of the obligation to render performance pursuant to section 275 of the German Civil Code (Bürgerliches Gesetzbuch, BGB) if it is impossible for the obligor or any other person to render performance as agreed, or if performance would entail unreasonable effort. However, the fact that it is impossible must not have been either intentionally or negligently caused by the obligor.

The UN Convention on Contracts for the International Sale of Goods (CISG) often applies in the case of international contracts. It requires the obligor to demonstrate that nonperformance is due to an event beyond their control.

The coronavirus raises many questions, including in relation to contract law. Experienced lawyers can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/commercial-law/corona-and-contract-law.html

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Corona und VertragsrechtPressemitteilungen
news-173 Fri, 24 Apr 2020 15:52:19 +0200 Tax relief in response to the coronavirus crisis https://www.mtrlegal.com/en/news-and-press/detail/news/tax-relief-in-response-to-the-coronavirus-crisis.html Germany’s federal government has drawn up various measures in an attempt to mitigate the economic impact of the coronavirus pandemic, including tax relief measures.

The crisis surrounding the coronavirus is hitting businesses, freelancers, and the self-employed hard and – aggravated by tax liabilities – undermining their economic viability. We at the commercial law firm MTR Rechtsanwälte can report than the federal government’s plans include tax relief measures to ensure that businesses, freelancers, and the self-employed are able to maintain liquidity and that they do not come under additional strain from tax liabilities. Among the main features is the option to apply for an interest-free deferral of tax payments.

Many businesses are seeing orders either partially or completely dry up as a result of the coronavirus crisis, making it all the more difficult for them to meet their tax obligations. The German Federal Ministry of Finance, the Bundesfinanzministerium, has come up with a comparatively unbureaucratic solution. If businesses cannot afford their tax payments because of the economic impact of the coronavirus pandemic, the payments due this year can be limited, and it is normally possible to have them deferred interest-free. An application needs to be submitted to the relevant tax office by December 31, 2020.

The authorities are obliged to refrain from making their approval of deferral applications conditional on overcoming high barriers. Taxpayers are nevertheless required to demonstrate that the coronavirus crisis is having a direct economic impact on them. It is not necessary to declare the extent of the damage or loss. Thanks to this measure, income tax, corporation tax, and sales tax can be deferred interest-free.

Additionally, it is possible to adjust the level of advance payments on income tax, corporation tax, and trade tax. Applications to adjust advance payments are also submitted to the relevant tax office. The advance payments will be adjusted downward if it is clear that the taxpayer’s financial performance is deteriorating due to the coronavirus pandemic.

Furthermore, enforcement measures for overdue tax liabilities will be suspended until the end of the year. Statutory late payment fines accrued during this period will be waived. This measure also applies to income tax, corporation tax, and sales tax.

Lawyers with experience in the field of tax law can advise businesses, freelancers, and the self-employed.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/corona-and-taxes.html

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Corona und SteuerrechtPressemitteilungen
news-171 Wed, 22 Apr 2020 15:09:45 +0200 Deferral of social security contribution due to the coronavirus crisis https://www.mtrlegal.com/en/news-and-press/detail/news/deferral-of-social-security-contribution-due-to-the-coronavirus-crisis.html Employers are obligated to pay social security contributions for their employees. With the outbreak of the coronavirus, they now have the option to defer these contributions.

Many businesses are seeing orders dry up as a result of the crisis surrounding the coronavirus, yet nothing has changed on the cost front. Wages, salaries, and social security contributions for employees need to be paid. This is particularly challenging when experiencing liquidity shortages. We at the commercial law firm MTR Rechtsanwälte can report that employers therefore have the option to defer social security contributions.

Failure to pay social security contributions for employees on time normally leads to surcharges being imposed for late payment. The cause of late or nonpayment is irrelevant. The application of the surcharge is determined solely by the deadline being missed, even if only by one day. However, with the spread of the coronavirus pandemic, it is possible under certain circumstances to defer social security contributions as a way of easing the burden on the business.

A press release dated March 25, 2020 from Germany’s National Association of Statutory Health Insurance Funds, the GKV-Spitzenverband, stated as a complement to the extensive support measures implemented by Germany’s federal government that it would also be possible under certain circumstances for statutory health insurance funds to temporarily defer social security contributions.

The current plan, according to the press release, is for deferral to be limited to the months of March and April, and for it to only be an option if all other support measures within the federal government’s package of measures have been exhausted.

It will therefore be necessary in the coming weeks to keep a close eye out for when and how quickly businesses struggling financially due to the coronavirus crisis will be able to take advantage of the support measures legislated for by the federal government. If the assistance will not be available to businesses until it is too late, the arrangements for the deferral of social security contributions might also be extended.

Social security contributions can be deferred if prompt payment would cause the business significant hardship, e.g. in the form of serious cash flow problems. The employer needs to be able to demonstrate this.

No interest or surcharges for late payment are due in the event of a deferral. The contributions must be paid at a later date. For this reason, employers should first prioritize other options as a means of weathering the crisis, such as applying for permission to introduce reduced working hours. Lawyers with experience in the fields of labor and employment law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/employment-law/corona-deferral-of-social-security-contributions.html

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Corona Stundung von SozialbeiträgenPressemitteilungen
news-170 Wed, 22 Apr 2020 15:00:00 +0200 COVID-19 – Restrictions on landlords’ right of termination https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-restrictions-on-landlords-right-of-termination.html The spread of the coronavirus has now also led to restrictions on the right to terminate rental agreements. These apply to both private and commercial rental agreements.

If, on two consecutive occasions, a tenant falls behind on rent payments or defaults on a substantial portion of the rent, the landlord is entitled to issue extraordinary notice terminating the rental agreement. We at the commercial law firm MTR Rechtsanwälte can report that significant restrictions have since been applied to this right of termination in response to the coronavirus pandemic. These are aimed at protecting businessmen and traders, among others, in this time of crisis.

The German federal government’s aid package includes restrictions on landlords’ right of termination. It currently provides that landlords cannot terminate rental agreements in the period from April 1 until June 30 of 2020 based on rental arrears. However, this is conditional on the tenant not being able pay the rent because of the crisis surrounding the coronavirus. Possible justifications for nonpayment of rent include reduced working hours, the temporary closure of shop premises or the workplace, or a decline in the number of orders as a result of the coronavirus crisis.

Notwithstanding this, the obligation to pay rent generally continues to apply. In the case of arrears of payment from the period between April 1 and June 30 of 2020, the landlord is merely not entitled to issue notice of termination for a period of 24 months. Termination based on these rental arrears only becomes an option if the tenant is still in default of payment after June 30, 2020.

The measure is designed to prevent businesses and traders from losing their premises and land because of the crisis and thus being divested of a key component of their commercial activity. It may be extended if the period ending in June 2020 is insufficient.

This measure does not mean that landlords are generally unable to terminate rental agreements. For instance, arrears of payment from before April 1, 2020 can still justify termination. Moreover, any option to terminate a rental agreement that is based on laws or regulations and does not require a justification remains unaffected. This may be relevant, for example, in cases involving indefinite tenancies for land and commercial premises.

Landlords, on the other hand, are not protected from payment defaults due to the coronavirus, which means they themselves may be at risk of defaulting on payments and have to seek help.

Lawyers with experience in the field of commercial tenancy law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/real-estate-and-property-law/commercial-law-of-tenancy-and-lease/corona-and-commercial-tenancy-law.html

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Corona und gewerbliches MietrechtPressemitteilungen
news-169 Wed, 22 Apr 2020 14:50:54 +0200 COVID-19 – Employers can apply for permission to reduce working hours to get through the crisis https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-employers-can-apply-for-permission-to-reduce-working-hours-to-get-through-the-crisis.html Businesses can introduce short-time work as a means of weathering economic hardship caused by the coronavirus crisis. Germany’s federal government has therefore moved to relax the conditions for applying for short-time allowance.

With supply shortages and empty order books among its consequences, the crisis surrounding the coronavirus is placing a massive burden on businesses and threatening jobs. Short-time work and short-time allowance can help firms to maintain liquidity and secure jobs. We at the commercial law firm MTR Rechtsanwälte can report that in view of the rapid spread of the coronavirus, the federal government has decided to significantly relax the conditions for applying for short-time allowance and for permission to introduce reduced working hours.

In order to support businesses, the existing rules governing short-time work have been made less strict with retroactive effect from March 1, 2020. This means that businesses are already able to apply for permission to introduce reduced working hours in response to the coronavirus crisis.

The new arrangements enable businesses to apply for short-time allowance if ten percent of the workers at a workplace are affected by a loss of work due to the coronavirus crisis. Previously, the loss of work needed to affect one third of employees. Of equal importance to employers is that they will be fully reimbursed for the social security contributions they pay for their workers. Short-time allowance can also be claimed for temporary workers.

Employers must submit the application for short-time allowance to the local employment office where the operational headquarters is located. Its approval is conditional on the normal working hours being significantly restricted. This is likely to come about during the coronavirus crisis as a result of, for example, supply shortages, government measures, and orders that are cancelled or fail to materialize.

As a rule, the following conditions must be met when applying for short-time allowance: there needs to be a substantial loss of work together with a loss of wages, i.e. there needs to be a so-called “unabwendbares Ereignis” (unavoidable event). This includes, e.g., official measures adopted in response to the coronavirus crisis. The loss of work must therefore be unavoidable, but also temporary. Moreover, at least one employee needs to be employed at the workplace. The loss of work must be reported in writing to the local employment office during the month in which the reduced working hours were introduced. Employers may also need to observe collectively agreed arrangements, agreements with the works council, and clauses in employment contracts that address short-time work.

Lawyers with experience in the fields of labor and employment law can advise employers on matters relating to short-time work as well as other legal issues in connection with the coronavirus crisis.

For more information:

https://www.mtrlegal.com/en/legal-advice/employment-law/coronavirus-and-short-time-work.html

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Corona und KurzarbeitPressemitteilungen
news-166 Mon, 20 Apr 2020 11:16:03 +0200 Avoiding insolvency during the coronavirus crisis https://www.mtrlegal.com/en/news-and-press/detail/news/avoiding-insolvency-during-the-coronavirus-crisis.html Businesses whose existence is threatened by the crisis surrounding the coronavirus are to be lent a helping hand. Germany’s lower house of parliament, the Bundestag, has legislated for the suspension of the obligation to file for insolvency.

Businesses on the brink of insolvency, i.e. unable to pay or overindebted, must file for insolvency as soon as possible, but at the latest within three weeks. This obligation is now being relaxed in order to avoid a deluge of insolvencies in the midst of the coronavirus crisis. We at the commercial law firm MTR Rechtsanwälte can report that the Bundestag has approved a temporary suspension of the obligation to file for insolvency until September 30, 2020 with retroactive effect from March 1, 2020.

It should be noted, however, that suspension of the obligation to file for insolvency is conditional on a given company’s economic difficulties being attributable to the crisis surrounding the coronavirus. There is assumed to be a causal relationship between the coronavirus pandemic and the onset of insolvency if the business was still solvent on December 31, 2019.

A business is considered to be insolvent if it is no longer able to pay its bills, loans, or wages. It is deemed to be overindebted if the debts exceed the total value of the business. In both cases, the business is on the brink of insolvency and, depending on its corporate form, the managing director or executive board is obliged to file for insolvency as soon as possible. A delay in filing for insolvency may render those responsible liable to prosecution. Thanks to the suspension of the obligation to file for insolvency until September 30, 2020, businesses have more time to consolidate as well as potentially take advantage of other government support measures or loans from Germany’s state-owned development bank, the KfW.

Businesses on the brink of insolvency are normally not permitted to make any further payments. Requirements are now set to be relaxed even for payments made after the onset of insolvency. This includes making it easier for businesses to maintain their commercial relationships. While creditors are also entitled under normal circumstances to file for insolvency in relation to a business, this right is restricted as well. Insolvency proceedings will only be opened if the grounds for doing so predate March 1, 2020. The restrictions on creditors’ rights are initially limited to three months, whereas the suspension of the obligation to file for insolvency lasts until September 30, 2020. However, the latter may be extended until March 31, 2021.

Lawyers with experience in the field of insolvency law can advise businesses.

For more information:

https://www.mtrlegal.com/en/legal-advice/company-law/restructuring-insolvency/corona-and-insolvency-law.html

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Corona und InsolvenzrechtPressemitteilungen
news-164 Fri, 17 Apr 2020 12:53:09 +0200 COVID-19 – Obligation to file for insolvency to be suspended https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-obligation-to-file-for-insolvency-to-be-suspended.html Germany’s Federal Ministry of Justice has made plans to suspend the obligation to file for insolvency due to the coronavirus. The measure is designed to protect businesses that have gotten into difficulties as a result of the pandemic.

A company that becomes insolvent or overindebted must file for insolvency without undue delay. We at the commercial law firm MTR Rechtsanwälte note that if there is good reason to believe that the grounds for insolvency can be redressed, filing for insolvency can be put on hold for a maximum of three weeks.

It is to be expected that the coronavirus pandemic will threaten the survival of many companies and workplaces, as well as the economic livelihood of many self-employed individuals. These businesses will also be receiving financial support from the federal government. However, it may be while before the measures are implemented and the funds are actually at the disposal of those concerned. That is why Germany’s Federal Ministry of Justice and Consumer Protection is making arrangements for the suspension of the obligation to file for insolvency. The aim is to protect businesses that are experiencing financial difficulties as a result of the coronavirus.

The federal justice minister, Christine Lambrecht, explained in a press release that the measure is meant to prevent businesses from having to file for insolvency simply because the assistance legislated by the federal government does not arrive in time. She went on to state, citing information made available by the Federal Ministry of Justice, that because the regular three-week filing period is too short in view of the circumstances, it is now being suspended until September 30, 2020.

It should be noted, however, that the suspension of the obligation to file for insolvency is conditional on the grounds for insolvency being attributable to the coronavirus pandemic. In addition, there must be a reasonable prospect of the business recovering by applying for state aid, or after emerging from serious financing or restructuring negotiations. Plans for the measure to be extended envisage a revised deadline of no later than March 31, 2021.

Failing to file for insolvency in due time is a criminal offense. Suspending the obligation to file for insolvency would lower the risk and buy time. Since the grounds for insolvency need to be attributable to the crisis surrounding the coronavirus, managing directors and board members would be well advised to clearly document all transactions and events.

Lawyers with experience in the field of insolvency law can advise businesses, freelancers, and the self-employed to ensure proper compliance with the legal requirements.

For more information:

https://www.mtrlegal.com/en/legal-advice/company-law/restructuring-insolvency.html

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Restrukturierung InsolvenzPressemitteilungen
news-161 Thu, 16 Apr 2020 13:46:10 +0200 COVID-19 & Commercial Law – Nonperformance of contracts in times of crisis https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-commercial-law-nonperformance-of-contracts-in-times-of-crisis.html The coronavirus pandemic is putting a strain on economic relations throughout the world. In many cases, it is either no longer possible to perform contracts as agreed or performance is completely impossible.

The coronavirus pandemic is having a significant impact on national and international business relations, it no longer being possible in many cases to perform contracts as agreed due to the coronavirus crisis. This has led to the increased prominence of the term “force majeure”. However, it cannot be invoked in every instance of defective contractual performance. The coronavirus has not generally rendered contracts obsolete. We at the commercial law firm MTR Rechtsanwälte note that the parties often have a right to insist on contractual performance.

First, it is necessary to establish why it is not possible to render performance as stipulated in the contract. In view of the crisis surrounding the coronavirus, possible factual grounds include supply bottlenecks and liquidity problems. However, the reasons may also be directly attributable to statutory directives designed, for example, to prevent the spread of the epidemic.

Each contracting party is initially obliged to do everything in their power to render performance as stipulated in the contract. Failure to meet this obligation may entitle their contractual partner to, for instance, withdraw from the contract or claim damages due to nonperformance.

Force majeure then potentially comes into play. If one or more contracting parties is unable to render performance because of the coronavirus, the parties can potentially be partially or fully released from their contractual obligations. Another possibility is that the pandemic gives rise to frustration of contract, thus rendering it impossible to fulfill the contract, though this needs to be assessed on a case-by-case basis given the complexity of contracts. The coronavirus cannot serve as a blanket justification for nonperformance.

Of course, contractual nonperformance may have substantial financial implications for the other parties to the contract. For this reason, it then also needs to be established whether obtaining financial resources as part of the German federal government’s aid package is an option, or whether recourse should be had to loan offers from Germany’s state-owned development bank, the KfW.

It is essential in each individual case to have the specific circumstances examined by lawyers with experience in the field of commercial law.

For more information:

https://www.mtrlegal.com/en/legal-advice/commercial-law/corona-and-commercial-law.html

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Corona und HandelsrechtPressemitteilungen
news-158 Wed, 15 Apr 2020 15:34:15 +0200 Short-time work during the coronavirus crisis – Applicants obliged to provide accurate information https://www.mtrlegal.com/en/news-and-press/detail/news/short-time-work-during-the-coronavirus-crisis-applicants-obliged-to-provide-accurate-information.html Germany’s federal government has put together a comprehensive aid package to compensate for the economic impact of the coronavirus crisis. This includes making it easier to apply for short-time allowance – referred to as “Kurzarbeitergeld” (or “KUG” for short).

Short-time allowance can provide rapid relief to businesses, enabling them to weather the economic storm whipped up by the COVID-19 coronavirus. Germany’s federal government has therefore made it easier to access short-time allowance with retroactive effect from March 1, 2020. This should allow businesses to better cope with the crisis and maintain jobs.

The provision of short-time allowance is conditional on the loss of work affecting 10 percent of the workers at a given workplace. Prior to the current crisis, the figure was one-third. Employers will be fully reimbursed by the Bundesagentur für Arbeit – the German Federal Employment Agency – for the social security contributions they have to pay for their employees as well as for short-time work. It is also possible to apply for short-time allowance for temporary workers. Moreover, it is not necessary to establish negative working-time balances in order to make use of short-time work.

The barriers to short-time work being approved have thus been significantly lowered. The application for reduced working hours must be submitted by the companies. The information provided by managing directors, board members, or other company decision-makers in connection with the application must be accurate to the best of their knowledge and belief. We at the commercial law firm MTR Rechtsanwälte note that there may be serious legal consequences if the information provided is false.

If the managing director, executive board, or other company decision-makers provide false information in order to benefit from the federal government’s aid package, they are committing a criminal offense and claiming benefits to which they are not entitled. This may give rise to a criminal prosecution for (subsidy) fraud or swearing false affidavits.

Providing false information is not a trivial offense. The legal consequences can be serious. Subsidy fraud is not first constituted, for instance, when disbursements are effected. In fact, it is constituted as early as when the applicant provides false information. Of course, funds that have already been released must be paid back. In addition, there is the real prospect of criminal proceedings or losing licenses.

Employers would therefore be well-advised to ensure that all the information they provide is accurate. Should they run into difficulties, lawyers with experience in the fields of labor and employment law can assist them, including if offenses have already been committed.

For more information:

https://www.mtrlegal.com/en/legal-advice/employment-law/coronavirus-and-short-time-work.html

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Corona und KurzarbeitPressemitteilungen
news-157 Wed, 15 Apr 2020 15:24:06 +0200 Coronavirus – Loans and government assistance at a time of crisis https://www.mtrlegal.com/en/news-and-press/detail/news/coronavirus-loans-and-government-assistance-at-a-time-of-crisis.html Germany’s federal government has unveiled a vast package of measures that provide financial support to businesses and the self-employed to ensure they are able to weather the crisis.

The federal government is proposing extensive support measures for businesses, freelancers, and the self-employed to ensure they are able to cope financially during the coronavirus crisis. Germany’s lower house of parliament, the Bundestag, gave the green light to the aid package on March 25. The upper house of parliament, the Bundesrat, is expected to give its approval of the package on March 27.

We at the commercial law firm MTR Rechtsanwälte can report that the proposed measures range from direct capital injections and cheap loans, all the way to a multi-billion euro economic stabilization fund for large – but also small, systematically important – businesses.

Small businesses and sole traders are being provided with immediate financial assistance. Businesses with up to 5 employees can apply for a one-off payment of 9,000 euros for three months. In the case of businesses with up to 10 employees, it can go up to as much as 15,000 euros. This is meant to help overcome liquidity shortages and ensure businesses survive. However, the economic difficulties must be the result of the crisis surrounding the coronavirus and not predate March 2020 to be able to receive assistance.

In order to secure liquidity, businesses can also apply for loans at the German state-owned development bank, the KfW. Again, the cause of the financial difficulties must be the coronavirus crisis, and the economic difficulties must not predate January 1, 2020. According to media reports, numerous businesses have already taken advantage of this opportunity and submitted loan applications in the first few days to help them tide over a financial squeeze due to the coronavirus pandemic. Unlike in the case of the immediate assistance measures, the loans are subject to interest and must be paid back.

Larger businesses may be covered by the mutli-billion euro rescue package, with the state potentially issuing guarantees for businesses and, if necessary, bringing them into full or partial public ownership. The businesses in question will then be privatized again at the end of the crisis. While this rescue fund is intended primarily for high-revenue businesses with at least 250 employees, smaller businesses of systemic importance can also potentially qualify under the rescue package.

These support programs will be an essential lifeline for many businesses during the coronavirus crisis. However, it is important to use the funds wisely. It also bears repeating that the loans need to be repaid. Experienced lawyers can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/banking-law/corona-and-financial-support.html

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Corona und Banken FördermittelPressemitteilungen
news-153 Thu, 09 Apr 2020 12:28:19 +0200 LG Freiburg: Food products’ county of origin must be correctly specified https://www.mtrlegal.com/en/news-and-press/detail/news/lg-freiburg-food-products-county-of-origin-must-be-correctly-specified.html Apples that were merely packaged in Germany must not carry the designation of origin “aus Deutschland” / “from Germany”. That was the verdict of the Landgericht (LG) Freiburg – the Regional Court of Freiburg – in a ruling from January 14, 2020 (Az.: 12 O 88/19 KfH).

The origin of food products is a key factor influencing consumers’ purchase decisions. Accordingly, the courts are increasingly having to deal with legal disputes concerning designations of origin. We at the commercial law firm MTR Rechtsanwälte note that in order for Germany to be designated as the country of origin of a food product, for example, it is not necessary for the entire production process to take place in Germany.

That being said, it is not enough for food products to be merely packaged in Germany. That was the verdict of the Landgericht Freiburg in a case involving apples from Italy.

In the case in question, a discount supermarket had labeled apples on store shelves as coming from Germany. In fact, the fruit had come from and been picked in Italy, and only packaged in Germany. For this reason, the consumer advice center for the German state of Baden-Württemberg – the Verbraucherzentrale Baden-Württemberg – initially issued the company with a formal warning for misleading consumers, before later filing a successful lawsuit. The LG Freiburg ruled that one must not give the impression that the country of origin of apples from Italy is Germany.

It is not necessary, however, for the entire process – from growing and picking to packaging – to take place in the country of origin. In a ruling from September 4, 2019 (Az. C-686/17), the ECJ held that the location of the harvest is the decisive factor for the designation of the county of origin. The case concerned mushrooms whose labeling specified Germany as the country of origin, despite having been grown in the Netherlands and brought to Germany shortly before being harvested.

This was sufficient to justify specifying Germany as the country of origin. The ECJ held that European customs law was decisive, noting that according to the Union Customs Code, the country of origin is the country in which the harvest takes place.

Geographical indications and designations of origin are important to both businesses and consumers. Yet the correct legal classification is not always clear, with infringements potentially giving rise to appropriate sanctions. Lawyers with experience in the fields of antitrust and competition law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-151 Tue, 07 Apr 2020 11:27:23 +0200 OLG Köln: Protection of competitive distinctiveness https://www.mtrlegal.com/en/news-and-press/detail/news/olg-koeln-protection-of-competitive-distinctiveness.html A product that is not protected by a trademark may nevertheless benefit from protection against imitations under competition law. That was the verdict (Az. 6 U 82/19) of the Oberlandesgericht (OLG) Köln – the Higher Regional Court of Cologne.

We at the commercial law firm MTR Rechtsanwälte can report that purely technical solutions are not supposed to be afforded protection under trademark law in order to allow for free competition. A product may nonetheless display competitive distinctiveness and thus enjoy protection against misrepresentation of origin.

The case before the OLG Köln concerned the packaging of a fruit juice. The plaintiff had registered a stand-up pouch as a trademark, only for this to be subsequently deregistered in 2014 with reference to an absolute ground for refusal. The defendant had presented fruit juice at a trade fair in such a stand-up pouch and came off the worse for it.

Even in the absence of trademark protection, a product may display competitive distinctiveness and thus enjoy protection against misrepresentation of origin. That was the case here according to the OLG. What constitutes misrepresentation of origin was said to be determined by the degree of competitive distinctiveness and the nature and intensity of the adoption. The court attributed above-average competitive distinctiveness to the plaintiff’s packaging due to the duration and intensity of the brand’s decades-long profile, ruling that the lack of trademark protection was not an obstacle to the protection of related rights under competition law.

For more information:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-141 Thu, 26 Mar 2020 09:54:06 +0100 Coronavirus – What it means for businesses https://www.mtrlegal.com/en/news-and-press/detail/news/coronavirus-what-it-means-for-businesses.html Businesses across the world are feeling the strain of these difficult times brought about by the coronavirus pandemic. Yet business goes on and businesses must come to terms with the situation. We at the commercial law firm MTR Rechtsanwälte offer legal advice on a wide range of issues currently affected by the coronavirus.

Our efforts have been particularly focused on adapting and responding to the current environment, its challenges, and the implications for three key fields of law: commercial law, distribution law, and labor and employment law.

Distribution law, in particular, presently demands a great deal of expertise of legal practitioners in addressing the definition of “force majeure”, with many cases turning on whether the coronavirus constitutes force majeure and thus justifies suspending contractual performance. It is not uncommon for businesses to find themselves out of their depth trying to make a convincing case for invoking force majeure vis-à-vis business partners, and for them to be uninformed about the possible or necessary next steps if agreements are cancelled, paused, or terminated.

The rescission or termination of agreements under commercial law is also currently presenting businesses as well as independent commercial agents with complex challenges that, in the vast majority of cases, cannot be resolved without the advice and support of lawyers.

Existing contracts are one thing, taxes are another. Businesses have to make advance payments of income and corporation taxes, but they are not in a position to do so because of the ongoing challenging circumstances. Wages and social security contributions can rapidly bring a company to its knees due to working conditions being increasingly complicated by measures designed to contain the coronavirus pandemic.

We at the commercial law firm MTR Rechtsanwälte can develop viable payment plans with the tax authorities and negotiate deferments. In times like these when nothing is working anymore, businesses need a team of advisers that is familiar with the latest assistance programs and can quickly set the company up to benefit from them.

For instance, Germany’s federal government is planning not only on loosening the rules on short-time workers but also suspending the obligation to file for insolvency for up to 12 months. This period affords employers a lot of flexibility in dealing with available and unavailable funds, making it possible for the business and jobs to weather the crisis.

For more information:

https://www.mtrlegal.com/en/legal-advice/business-law.html

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WirtschaftsrechtPressemitteilungen
news-136 Tue, 24 Mar 2020 10:25:03 +0100 MTR Rechtsanwälte – Experience in the fields of antitrust and competition law https://www.mtrlegal.com/en/news-and-press/detail/news/mtr-rechtsanwaelte-experience-in-the-fields-of-antitrust-and-competition-law.html Violations of antitrust law are subject to rigorous sanctions. In 2019, Germany’s Federal Cartel Office, the Bundeskartellamt, imposed fines totaling around 848 million euros in response to illegal agreements.

According to its own information, the Bundeskartellamt imposed fines totaling around 848 million euros on 23 companies and associations plus 12 natural persons in the past year due to illegal cartel agreements. These related to, among other things, the wholesale trade of bicycles, steel procurement for automobile production, magazines, and industrial batteries.

Illegal agreements stymie competition and have an effect on prices and quality. We at MTR Rechtsanwälte, a commercial law firm with extensive experience in the fields of antitrust and competition law, note that this explains the rigorous approach to sanctions in response to violations of antitrust and competition law.

However, violations are by no means always as obvious as, for instance, in cases involving price rigging or territorial agreements. Even individual clauses within agreements may be in breach of competition law and give rise to commensurate sanctions. For this reason, it is always a good idea to review agreements, including with a view to possible violations of antitrust or competition law.

To avoid or reduce fines, it may be advisable to make use of the leniency program and notify the cartel authorities of violations.

For more information:

https://www.mtrlegal.com/en/legal-advice/antitrust-law.html

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KartellrechtPressemitteilungen
news-132 Fri, 20 Mar 2020 13:23:28 +0100 The coronavirus pandemic and employment law https://www.mtrlegal.com/en/news-and-press/detail/news/the-coronavirus-pandemic-and-employment-law.html The coronavirus pandemic is turning employment law on its head. The protective measures – some of which are recommendations and others mandatory in nature – designed to contain and curtail the strain of coronavirus and respiratory disease known as COVID-19, have far-reaching consequences for all aspects of life. Schools and kindergartens have been and remain closed, as are pubs, and sports and fitness facilities. Production chains are being disrupted because parts cannot be delivered. All of this has significant implications for employment law. Working parents have to look after their children, the conditions for a functional home-office environment need to be created, and employers are already struggling to cope with the existential threat posed by losses in revenue.

From an employer’s perspective, it is crucial to strike a balance when weighing up the interests of the company and its duty of care towards the employees.

The first steps should be to review and facilitate options to work from home, hold talks on possible vacation time, and consider taking advantage of the new rules on short-time employees if economic or organizational difficulties begin to emerge. Arranging unpaid leave in consultation with employees is also a good alternative in challenging times.

One thing even the worst pandemic is not going to change: employment law rules that define not only the employer’s duty of care but also the employee’s obligations under the employment contract, including during times of crisis.

An unexcused absence, for instance, may well result in a formal warning despite the coronavirus outbreak. It remains unclear whether wages will continue to be paid if employees are placed in quarantine. If it is not possible to work from home, employers can assert claims against the authority responsible for the quarantine. The same applies in the event that the authorities close businesses. In this situation, the employer is still required to continue paying wages and to make advance payments for the time being.

One reason that is often cited to justify an absence from the workplace is the need to look after children following the closure of daycare facilities. Despite the hardship this entails, the closure of daycare facilities does not qualify affected parents for continued payment of wages. Even a child falling ill – be it due to COVID-19 or something else – does not constitute exceptional circumstances from the perspective of employment law. While parents and guardians can avail themselves of legal rights to call in sick and claim for continued payment of wages in order to look after their children, they must not go beyond the scope of the legal framework in doing so.

Our view at the commercial law firm MTR Rechtsanwälte is that we are living through exceptional times with the spread of the coronavirus. The situation needs to be handled with the utmost care and sensitivity. We are ready to serve you with our expertise, including as it relates to the employment law issues touched on above. Please do not hesitate to contact us at any time for advice.

For more informations:

https://www.mtrlegal.com/en/legal-advice/employment-law.html

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ArbeitsrechtPressemitteilungen
news-128 Fri, 13 Mar 2020 14:11:21 +0100 LG Berlin: Reference must be made to GmbH’s legal form https://www.mtrlegal.com/en/news-and-press/detail/news/lg-berlin-reference-must-be-made-to-gmbhs-legal-form.html A company’s legal form as a GmbH is a key piece of information for consumers. Withholding information from advertisements about its legal form constitutes an antitrust violation according to a ruling of the LG Berlin.

Information that is crucial to consumers’ decision to purchase must not be withheld from them. This may include the company’s legal form. We at MTR Rechtsanwälte can report that according to a ruling of the LG Berlin, withholding this information from advertisements may amount to a breach of competition law.

The case concerned a company offering cultural events including refreshments on a ship. They were thus found by the court to be providing services in the field of culture. The members of the plaintiff association were also said to be operating in the same sector. The LG Berlin therefore concluded that they were competitors.

The defendant company had omitted references to its legal form as a GmbH in its advertising. In a ruling from August 6, 2019 (Az. 15 O 301/18), the LG Berlin held that in doing so it had violated rules governing market behavior and unfairly misled consumers by omission. The court went on to state that reference to the company’s legal form as a GmbH was a key piece of information for consumers, since booking in advance would entail a greater risk of insolvency than in the case of a sole trader.

For more informations:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-127 Thu, 12 Mar 2020 16:12:03 +0100 Illegal price rigging – Bundeskartellamt imposes fines totaling 154.6 million euros https://www.mtrlegal.com/en/news-and-press/detail/news/illegal-price-rigging-bundeskartellamt-imposes-fines-totaling-1546-million-euros.html Germany’s Federal Cartel Office, the Bundeskartellamt, has imposed fines totaling around 154.6 million euros on seven pesticide wholesalers for entering into illegal, anticompetitive price-fixing arrangements.

According to information provided by the Bundeskartellamt, the pesticide wholesalers coordinated their price lists from 1998 to 2015. We at the commercial law firm MTR Rechtsanwälte can report that in doing so they stymied fair competition and violated competition law, more specifically antitrust law.

On January 13, 2020, the Bundeskartellamt announced that the seven wholesalers of pesticides had been coordinating price lists, discounts, and some individual prices. The cartel watchdog therefore imposed fines totaling approximately 154.6 million euros on the cartel members. Another company was exempt from the fines as the beneficiary of the leniency program for being the first to cooperate with the Bundeskartellamt. Two other companies remain the subject of ongoing investigations.

The investigations conducted by the Bundeskartellamt found that the wholesalers would coordinate their price lists every summer and autumn over a period of 17 years from 1998 to 2015. This resulted in price lists for retailers and consumers that were largely uniform. Moreover, it was reported that, particularly in the initial years of the cartel, sometimes virtually the only that was changed on the price lists was the company logo.

While in the initial years the cartel members met on a number of occasions for the purpose of coordinating list prices, these agreements would later be struck predominantly in writing or over the phone. The final price calculations were then communicated to the companies. There was also some coordination of planned discounts. The arrangements significantly stymied competition. It was only after the searches conducted by the Bundeskartellamt in March 2015 that these practices were brought to an end.

The cartel members chose to cooperate with the Bundeskartellamt. Six of the companies in question have already acknowledged the facts as revealed by the investigations. This was taken into account when setting the fines.

The price rigging measures clearly stymied competition and thus violated antitrust law. Yet violations of antitrust law are by no means always as obvious as in the case of illegal price rigging. Even individual contractual clauses can be anticompetitive and accordingly give rise to sanctions.

Lawyers with experience in the fields of competition and antitrust law can offer advice.

For more informations:

https://www.mtrlegal.com/en/legal-advice/antitrust-law.html

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KartellrechtPressemitteilungen
news-125 Mon, 09 Mar 2020 10:02:04 +0100 Antitrust & Competition Law: Medical practice that does not admit inpatients is not a Klinik https://www.mtrlegal.com/en/news-and-press/detail/news/antitrust-competition-law-medical-practice-that-does-not-admit-inpatients-is-not-a-klinik.html A medical practice that does not provide overnight accommodation for patients is not a Klinik and is not allowed to style itself as such. That was the verdict of the Landgericht (LG) Hamburg in a ruling from November 15, 2019 (Az. 315 O 472/18).

The courts in Germany have had to wrestle with the German term “Klinik” (clinic/hospital/medical center) on many occasions. However, the BGH has since clarified in a ruling from October 17, 2018 that consumers expect from the term “Klinik” the possibility of being admitted as a temporary inpatient overnight. We at the commercial law firm MTR Rechtsanwälte note that for this reason, advertising featuring this term is deemed to be misleading if there is in fact no such possibility (Az.: I ZR 58/18).

In a similar case, the LG Hamburg has now ruled that a group practice must not refer to itself as a “Stimmklinik” (voice clinic). The lawsuit was brought by a competition association that considered the designation “Klinik” misleading, since the practice makes no provision for overnight stays for patients.

The practice features ENT and phoniatrics specialists. It has also collaborated with speech therapists, singing instructors, and various Kliniks. The doctors argued that the practice offered an outstanding combination of medical and nonmedical services and was therefore not your ordinary specialist practice. They made the case that “voice clinic” has become an established term internationally for facilities of this kind and contended that patients’ understanding of the term “Klinik” has changed.

The LG Hamburg did not accept this line of reasoning, ruling that consumers associate the term with a hospital, or at least a hospital unit that offers patients inpatient care, including the possibility of staying overnight. It held that “voice clinic” generally refers to a specific unit of a hospital.

Notwithstanding the possibility of patients being admitted due to cooperation agreements with hospitals, the court went on to state that this did not make the practice a Klinik. The LG Hamburg concluded that it was an interdisciplinary group practice that also offered nonmedical services.

A fine line needs to be trodden when it comes to advertising, it being easy to incur sanctions such as formal warmings, injunction suits, or claims for damages. Lawyers with experience in the field of antitrust and competition law can offer advice and assist in fending off or enforcing claims arising from violations of antitrust or competition law.

For more informations:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen