Kilpatrick has assisted Alma Property Partners and Rexbo Gröna Industrihus in connection with the acquisition of the property Loviseberg 7, Botkyrka, from Safecon Holding. The property’s total leasable area is approximately 500 square meters with a land plot area of around 9,300 square meters.
Kilpatrick’s team consisted of Anthony Bähr, Fredrik Ahlqvist, Alexandra Ebenfelt, and Viktor Lundin.
Kilpatrick has assisted the Bonnier-owned Fastighets AB Hemmaplan in acquiring Rosengård Centrum from Trianon. Hemmaplan acquired 50 percent of Rosengård Centrum as early as 2021 and has since co-owned it with Trianon. Now, Hemmaplan has acquired the remaining 50 percent of Rosengård Centrum at an underlying property value of 700 million SEK.
Rosengård Centrum, located in Malmö, has a leasable area of approximately 35,000 square meters with a mix of tenants including both shops and restaurants, as well as entities focused on public services such as healthcare and education.
Kilpatrick’s team consisted of Fredrik Ahlqvist, Cecilia Lohmander, Anthony Bähr, Viktor Lundin, Marcus Carlsson, and Alexandra Ebenfelt.
Kilpatrick has acted as an advisor to Partners Group in their divestment of a major retail warehouse portfolio to Svenska Handelsfastigheter for approximately SEK 1.3 billion. The portfolio includes a total of seven properties amounting to 85,000 square meters, located in various retail areas across Sweden. Partners Group is a leading global player in the private market, acting on behalf of its clients.
Kilpatrick’s team consisted of Fredrik Ahlqvist, Viktor Lundin, and Alexandra Ebenfelt.
The board of a Swedish limited liability company was ordered to pay damages to investors for breach of the Prospectus Regulation. The Court of Appeal has overruled the judgement (with a dissenting opinion). In line with the district court, the Court of Appeal agrees that there was incorrect and misleading information. However, since the investors had previously made guarantee commitments to the company, the investors had not proven that their decision to subscribe for shares in the company was caused by the incorrect information in the prospectus. The judgement of the Court of Appeal has been appealed.
In connection with the listing of a company (the Company) on Nasdaq First North Growth Market in February 2020, the Company carried out a new share issue where, among others, two investors subscribed for shares in accordance with a guarantee commitment.
In addition to the prospectus, the focus of the dispute was an analysis that had been prepared in October 2019 (the Analysis) and which contained, among other things, a forecast of the Company’s expected net sales in 2019, and a presentation that was used in connection when the Company was presented to investors in November 2019 (the Presentation). The Presentation contained, among other things, a forecast of the group’s net sales for 2019.
In January 2020, a prospectus was published and posted on the Company’s website together with the Analysis and Presentation under the heading ‘IPO’. The prospectus did not contain any forecast (in any case, it did not state that any information would be a forecast). As usual, the prospectus contained a description of risk factors (including financing risks) and a disclaimer aimed at forward-looking information. In February 2020, the Company carried out the new share issue in which, among others, the two investors subscribed for shares in accordance with the guarantee commitment.
At the end of March 2020, the Company published its year-end report, which revealed that the net sales for 2019 were significantly lower than predicted in the forecasts. At the end of June 2020, the Company announced that its wholly owned subsidiary had filed for bankruptcy.
The investors claimed that the Board had violated the Prospectus Regulation. Among other things, because the Board had not made a so-called supplement to the prospectus in accordance with the Prospectus Regulation[1]. If such a supplement had been published, the investors would not have made the guarantee commitment and consequently not subscribed for shares in the Company.
The District Court largely agreed with the investors and initially stated that if a Swedish limited liability company prepares a prospectus in violation of the Prospectus Regulation, the board members may be liable for damage caused by negligence or intent due to incorrect or incomplete information in the prospectus (Chapter 29 section 1 Swedish Companies Act).
Furthermore, the District Court stated that although the Analysis and the Presentation had not been classified as advertisements (which is a requirement according to the Regulation), they were nonetheless advertisements (marketing) since they had been posted on the website under the heading ‘IPO’ together with the prospectus. According to the Prospectus Regulation, advertisements must not contain false or misleading information.
With regard to whether the forecasts in the Analysis and Presentation were incorrect and misleading, the District Court meant that the relevant time of the assessment was the time when the investors signed the guarantee commitment towards the Company (i.e. at the beginning of February 2020). According to the District Court, the board should, at least at that time, have realized that the Company’s actual outcome differed significantly from the forecasts, given that the board had an obligation to continuously monitor the accuracy of the forecasts. Consequently, the board should have prepared a supplement to the prospectus by that time to correct the previous information. As the board did not do so, the board was negligent. If the investors had received correct information in accordance with the requirements of the Prospectus Regulation, they would not have entered into the guarantee commitment and thus would not have subscribed for shares under such commitment, the District Court held. The District Court therefore found that the Board was obliged to compensate the investors for their loss.
Like the District Court, the Court of Appeal found that the Board had breached the Prospectus Regulation. However, when it came to the causality between the violations and the investors’ loss, the Court of Appeal made a different assessment. The background to the Court of Appeal’s assessment was that, according to the Court of Appeal, the investors had in practice already decided to subscribe for shares in the Company in 2019, i.e. before they entered into the guarantee commitment towards the Company in February 2020. The inaccuracies in the prospectus and advertising had therefore not affected the investment decision. According to the Court of Appeal, the investors would have subscribed for the shares in the Company even if they had received correct information.
The Court of Appeal therefore dismissed the investors’ claim for damages. One judge had a dissenting opinion . He argued that it was more likely that the investors would had decided not to subscribe for the shares if they had been given correct information, despite the guarantee commitment.
Since the Court of Appeal largely made the same judgement as the District Court regarding the breaches of the Prospectus Regulation, there are still important takeaways for a board preparing a prospectus. A board that is to draw up a prospectus should in particular:
This information is for general information purposes only and does not constitute legal advice.
[1] Regulation (EU) 2017/1129 of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and Commission Delegated Regulation (EU) 2019/979 of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council (Commission Delegated Regulation)
The ranking institute Legal 500 has published its annual ranking of the leading law firms in Europe. We are incredibly proud that our Stockholm office is once again ranked highly in the practice areas of construction law (tier 2), dispute resolution (tier 4), public procurement (tier 3), and real estate law (tier 2).
Several of Kilpatrick’s lawyers have been individually ranked, including Mattias Wittgren (Managing Partner), who, for the fifth consecutive year, is ranked in the most prestigious individual category, Hall of Fame. Sylvia Lindén (partner, public procurement) and Nicklas Björklund (partner, construction law) are ranked as Leading Individuals, while Hanna Sundberg (partner, real estate law) and Erika Finn (partner, dispute resolution) are ranked as Next Generation Partners.
In addition to these names, several of the firm’s lawyers are mentioned:
A significant part of Legal 500’s ranking results are based on interviews with the law firms’ clients. During this year’s client interviews, the following comments were made about Kilpatrick’s business:
“My collaboration with Kilpatrick Townsend & Stockton Advokat KB – Sweden has been an exceptional and enriching experience. Their professionalism, expertise, and extensive knowledge in construction law have been unparalleled. The law firm has consistently provided well-balanced and thoughtful responses to my legal inquiries.”
“The team has a comprehensive work ethic, leaving no stone unturned, is diligent, detailed, and always available to get the job done.”
“The team has extensive experience of the public procurement market, is highly engaged with the market and provides interesting analysis of legal developments.”
Chambers and Partners Europe has recently published its 2024 ranking of law firms, and Kilpatrick’s Stockholm office is once again highly ranked in the Real Estate practice area. The firm’s real estate group is praised by clients with reviews such as: “Kilpatrick Townsend & Stockton are well connected within the industry and up to date. The lawyers are always accessible.”
Fredrik Ahlqvist and Sylvia Lindén are individually ranked for the fifteenth and eighth consecutive year, respectively. Sylvia Lindén, who is the responsible partner for the firm’s procurement group, is ranked in band three with praise such as, “Sylvia is helpful no matter what questions you have and gives you good advice for the good of the business. You as a customer feel secure in the process.” Similarly, Fredrik Ahlqvist, who is the responsible partner for the firm’s real estate group, is also ranked in band three.
Chambers and Partners is an independent ranking institution that annually ranks the world’s leading law firms. The results are based on comprehensive research.
Who’s Who Legal has recently unveiled its annual industry analysis of the world’s leading lawyers. We are pleased to announce that several of Kilpatrick’s attorneys have been recognized as recommended advisors in their respective fields of expertise, both in the Swedish market and globally.
Since 1996, Who’s Who Legal (WWL) has identified leading lawyers in various business legal areas and jurisdictions worldwide. The ranking results are based on recommendations and feedback from both clients and industry peers.
We are proud to announce that Mattias Wittgren (Construction), Erika Finn (Arbitration), Sylvia Lindén (Government Contracts), Matti Scheffer (Real Estate & Hospitality), and Fredrik Ahlqvist (Real Estate), all based at the Stockholm office, are recommended in the latest edition of Who’s Who Legal.
Kilpatrick has represented Alma Property Partners and Rexbo Gröna Industrihus in connection with the purchase of the property Danmarks-Säby 6:7 in Uppsala. The property comprises approximately 3 400 sqm lettable area and 13 600 sqm plot area. In connection with the purchase, a long-term lease agreement was entered into with Expresservice i Sverige AB.
Kilpatrick’s team consisted of Anthony Bähr and Fredrik Ahlqvist.
Kilpatrick has represented Pictet Alternative Advisors in connection with the purchase of the property Halmstad Fyllinge 20:433 from OOF Group och Eleiko. The property comprises approximately 18 300 sqm for logistics operations and is fully let to Eleiko.
Kilpatricks team consisted of Fredrik Ahlqvist, Anthony Bähr, Anna Palmgren Hjärpe and Viktor Lundin.
Kilpatrick Townsend has represented Resinova in connection with the indirect purchase of the real property Helsingborg Guldgubben 1 from Unobo for an agreed property value of SEK 197 million. The property consists of 95 apartments constructed in 2020.
Kilpatrick Townsend’s team consisted of Anthony Bähr, Anna Palmgren Hjärpe and Viktor Lundin.
AMF Fastigheter has signed a construction contract with Zengun to renovate and expand the building on the property Marievik 14 in Liljeholmen, Stockholm. The project encompasses a total of approximately 9,000 square meters of gross floor area, with a contract value amounting to approximately SEK 230 million.
Kilpatrick Townsend has provided legal counsel to AMF Fastigheter in connection with the contract signing. Kilpatrick Townsend’s team consisted of Mattias Wittgren and Johan Wedsberg.
Kilpatrick Townsend has represented the sellers in connection with Elektroskandias’ 70-percent acquisition of Aprilice AB, one of the leading solar panel platforms in the Nordic European region. Aprilice was founded in 2012 and has since focused on the Swedish solar cell market and proposed a complete product range with cutting-edge expertise. Headquartered in Stockholm with branches in Gothenburg, Jönköping, Kalmar and Landskrona, Aprilice has approximately 160 employees and serves around 1,300 customers. Aprilice posted revenues of approximately EUR 100 million in 2022. Aprilice’s three founders will remain minority shareholders and will continue to work for Aprilice.
Kilpatrick Townsends team comprised of Tobias Öd (lead partner, corporate, commercial and employment law), Cecilia Qvist (corporate, commercial, IP-tech), Anthony Bähr (commercial lese and real estate law), Viktor Lundin (commercial), Johan Wedsberg (infrastructure- and construction law) Sylvia Lindén (public procurement and competition law) and Jens Nilsson (public procurement and competition law).
Kilpatrick Townsend’s corporate team regularly represents investors, founders, buyers and sellers. We have great experience of transactions within renewable energy. We have been entrusted to work with some of Sweden’s market leading companies in the industry.
Kilpatrick Townsend has represented the sellers in connection with Sortera’s acquisition of one hundred percent of Circla Recycling AB. Circla was founded in 2011 and has since grown to become a strong player within recycling, primary within construction waste in Stockholm. Circla has an annual turnover of approximately 60 MSEK and operates from its facility and office in Upplands Väsby. Sortera is one of the leading players in the collection and processing of residual products from the construction, infrastructure and industrial sectors in northern Europe. More information is available here.
Kilpatrick Townsends team comprised of Tobias Öd and Cecilia Qvist. Kilpatrick Townsend’s corporate team regularly represents investors, founders, buyers and sellers. We have great experience of transactions involving growth companies. We have been entrusted to work with some of Sweden’s market leading companies in the industry.
Kilpatrick Townsend has represented the shareholders of the digital agency Esatto AB in connection with the IT company Dizparc’s majority acquisition of Esatto. Esatto is a digital agency that offers strategic advice in business development, communication, and design, among other services. The company has approximately 90 employees distributed among its offices in Stockholm, Sundsvall, and Krakow. Esatto will continue to operate under the same brand. The acquisition will broaden the offering portfolio while strengthening the geographical presence throughout the country.
More information about the acquisition is available here.
Kilpatrick Townsend’s team comprised of Tobias Öd and Viktor Lundin.
Kilpatrick Townsend’s corporate team regularly represents investors, founders, buyers and sellers and we have great experience of transactions within IT and digital technology. We have been entrusted to work with some of Sweden’s most interesting growth companies and their founders.
In connection with the pandemic, it became possible to hold meetings digitally, but that possibility ceased to apply at the end of 2022. Now the possibility will become permanent according to a bill.
A limited liability company that wants to hold fully digital meetings must determine this in the articles of association. The company must therefore first hold a general meeting where new articles of association are adopted. The new articles of association must be registered with the Swedish Companies Registration Office. After that, the company can hold digital meetings.
The notice to a digital general meeting must state how the shareholders must participate and vote. It is not enough to simply refer to the company’s website for this information in the notice. Otherwise, the same rules apply to the notice as for ordinary meetings.
There is no requirement that digital meetings must be combined with postal voting (unless it is stated in the articles of association).
The law does not specify which technology must be used. In practice, it is the company’s board that decides. The important thing is that the shareholders can participate with the technology that they typically have access to.
The law also does not say how the digital meeting should be organised. Just as at ordinary meetings, the chairman of the meeting is responsible for matters of order at the meeting and must assess whether the preparations are acceptable and how any problems – technical or otherwise – that arise during the meeting should be handled. One thing to think about is e.g. how powers of attorney should be handled. A power of attorney must be in writing, but it can be signed with an advanced electronic signature. The shareholders must also be able to access the company’s share register, but it is sufficient that it is available in digital form. There must also be good procedures for identifying the participants and for counting votes.
The minutes from the meeting must state that it was conducted digitally.
The law does not specify exactly what applies if technology problems arise. Here you must adhere to general principles of association law. If e.g. a shareholder has not ensured that he has a working internet connection, this shall not prevent the meeting from being carried out.
As a starting point, outsiders do not have the right to attend the general meeting of limited liability companies or otherwise follow the negotiations unless the general meeting decides to do so. In private limited companies, unanimity is required to allow outsiders to attend the meeting, while in public limited companies such a decision can be made with a simple majority . The same rules apply to digital meetings.
In limited companies, a digital general meeting may be held without support in the articles of association if extraordinary circumstances require it. This means situations of a force majeure nature.
Yes, if all shareholders agree. It has also been possible – and is still possible – to have so-called hybrid voices. By that is meant a general meeting that is held at a physical location but where some participate remotely.
The proposal is intended to come into force from 1 January 2024, provided the proposal goes through. According to the proposal, it should be possible to make changes to the articles of association in advance and condition them in such a way that they only apply after they come into force.
Legal council referral from the Ministry of Justice, Digital general meetings of companies and associations (8 June 2023)
Kilpatrick Townsend has represented A Retro Tale AB in connection with an investment from, among others, the new investors H&M Group Ventures and the Leo Vegas founder, Gustaf Hagman. The investment will be used to scale up the company’s business in Europe. A Retro Tale is an online store based in Stockholm. The core business is constituted by vintage and second-hand fashion accessories from the worlds most exclusive and famous fashion houses. Unlike other re-sellers on the second hand market, A Retro Tale owns 100 percent of all its products. More information is available here.
Kilpatrick Townsends team comprised of Tobias Öd and Cecilia Qvist.
Kilpatrick Townsends corporate team regularly represents investors, founders, buyers and sellers and we have great experience of tech-transactions. We have been entrusted to work with some of Sweden’s most interesting growth companies and their founders.
Construction (Tier 2)
‘Mattias Wittgren has a great understanding of the technical parts of construction projects.’
‘The team is very responsive and has a good understanding of the techno-commercial issues in our ongoing disputes.’
‘Counsel are really committed to the clients and make big efforts to make the clients understand the issues from a Swedish perspective.’
‘The practice has a very wide spread of strength, competence and experience in a way that most firms don’t have. Sometimes when you work with a big firm you may lose contact within the team, but this was not the case here.’
Real Estate (Tier 2)
‘Professional and knowledgeable.’
‘Solid, thorough and swift. They provide reliable consultations with good responsiveness.’
‘Matti Scheffer is experienced and pleasant to deal with.’
‘Very knowledgeable and excellent social competence, meaning they always can handle counterparts of all types (experience as well as attitude).’
Public Procurement (Tier 3)
‘The team, headed by Sylvia Linden, provided a great service.’
‘Sylvia Lindén is very knowledgeable in the field of Public Procurement in Sweden, and is a very nice person to be working with.
Dispute Resolution (Tier 4)
‘They have all the competence they need within the Company and the seniors are among the best in Sweden.’
‘They begin the resolution searching for options for the different sides to easily have an agreement. They are not interested in a big fight, they want their client to have an agreement with good terms of course, but in that process they are able to see the opponent’s point of view and how to get their client to get a good solution to the dispute.’
‘Nicklas Björklund is among the best lawyers in Sweden and his team is considered a winning team, which is a very good thing if you are in a dispute.’
This year’s result in Chambers and Partners Europe have now been published and, once again, Kilpatrick Townsend’s Stockholm office ranks high in the practice area of Real Estate. The Real Estate group is praised by clients with reviews such as: “They have a deep understanding and knowledge of the legal aspects of real estate transactions, and a wide commercial understanding”.
Fredrik Ahlqvist and Sylvia Lindén, are individually ranked for the fourteenth and seventh consecutive years respectively. Fredrik Ahlqvist, the responsible partner for Real Estate, is ranked in band three this time and is described by clients as: “… a highly reputed lawyer within the field, with loads of experience.” Chambers and Partners ranks Sylvia Lindén in band three in the Public Procurement practice area with praise such as “very supportive and competent”.
Chambers and Partners is an independent ranking institute that annually ranks the world’s leading law firms. The results are based on extensive research.
Check out Kilpatrick Townsend’s rankings with Chambers and Partners here.
Prominent Additions to Private Equity, Middle Market, Financial Services, and Litigation Practices
ATLANTA/CHICAGO (March 7) – Kilpatrick Townsend & Stockton announced today that it is opening offices in Chicago and Phoenix effective March 1, 2023. A total of 28 legal professionals, including 14 attorneys, will be joining the firm.
The team of attorneys, comprised of three partners, two counsel, five associates, and four litigation of counsel, are bringing well-recognized practices to Kilpatrick Townsend from the highly regarded Chicago-based L&G Law Group LLP which served clients for nearly three decades. Another leading partner is joining Kilpatrick Townsend from Chicago-based Walker Morton. Together, these attorneys have represented leading entities and individuals in the areas of corporate, private equity, middle market, financial services, complex commercial litigation, and labor & employment.
“We are excited to open in Chicago, one of the nation’s key financial centers and home to numerous Fortune 500 companies, as well as a strong private equity and venture capital hub,” said Henry Walker, Kilpatrick Townsend Chair. “This is a talented, well-connected group of lawyers and we are pleased they chose to join our firm. In addition, we already represent a number of clients in Chicago and throughout the Midwest and this physical presence will help expand that representation. Fast-growing Phoenix offers an excellent opportunity to build on substantial client work there and enhance our firm’s already high-profile in the western U.S.”
Kilpatrick Townsend now has offices in the eight of the 10 largest metro areas in the U.S. Overall, the firm has 18 U.S. offices and 22 offices worldwide.
“Kilpatrick Townsend is one of the nation’s preeminent law firms and its much larger platform will help expand existing client relationships and build new ones,” said Jerry Haberkorn, Kilpatrick Townsend Chicago Office Managing Partner. “Over the years, we have known many of the firm’s attorneys and seen their successes in the areas of corporate, litigation, and intellectual property. We are excited to be in a firm with this additional expertise to better serve our clients. Another appeal is the firm’s collaborative and client-focused culture.”
Kilpatrick Townsend will assume the previous L&G office spaces in Chicago and Phoenix.
For more information about Kilpatrick Townsend, please visit www.kilpatricktownsend.com.
Kilpatrick Townsend has represented HIAB in its acquisition of one hundred percent of Olsbergs Hydraulics AB and Olsbergs Electronics AB. Olsbergs designs, manufactures and supplies hydraulic valves and remote control systems used to maneuver Hiab’s truck mounted loader cranes and forestry cranes. All 100 Olsbergs employees will join Hiab following the transaction. Hiab is a leading provider of smart and sustainable load handling solutions such as HIAB, EFFER and ARGOS loader cranes, MOFFETT and PRINCETON truck mounted forklifts, LOGLIFT forestry cranes, JONSERED recycling cranes, MULTILIFT skiploaders and hooklifts, GALFAB roll-off cable hoists, and tail lifts under the ZEPRO, DEL and WALTCO brands. Hiab is part of Cargotec Corporation.
Kilpatrick Townsends team comprised of Tobias Öd (lead partner), Anthony Bähr (real estate and leases), Cecilia Qvist (M&A and IP) and Viktor Lundin (M&A and commercial). Kilpatrick Townsend’s corporate team regularly represents investors, founders, buyers and sellers. We have great experience of transactions within the manufacturing industry. We have been entrusted to work with some of Sweden’s market leading companies in the industry.
In June 2022, Sweden had its first court decision regarding a board’s responsibility under the Companies Act for breach of the Prospectus Regulation[1]. Following a share issue and a listing of a company on Nasdaq First North Growth Market, two investors sued the company’s board and sought compensation arguing that the prospectus prepared by the board was in breach of the Prospectus Regulation. The District Court’s judgment, which to a large extent agrees with the investors, has been appealed. [1] Regulation (EU) 2017/1129 of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and Commission Delegated Regulation (EU) 2019/979 of 14 March 2019 supplementing Regulation (EU) 2017/1129 (Commission Delegated Regulation)
A company (the Company) had made an offering to subscribe for shares in connection with the Company’s listing on Nasdaq First North Growth Market in February 2020. Two investors, among other, had subscribed for shares in accordance with a previously made commitment.
At the center of the dispute, apart from the prospectus, was an analysis prepared in October 2019 (the Analysis), which among other things included a forecast regarding the Company’s future net turnover in 2019 (negative, neutral, and positive) as well as a presentation that was used when the Company was introduced to investors in November 2019 (the Presentation). Among other things, the Presentation included a forecast regarding the group’s net turnover for 2019.
In January 2020, a prospectus was published and posted on the Company’s website together with the Analysis and the Presentation under the headline “IPO.” No forecast was included in the prospectus (at least no information was presented as a forecast). As usual, the prospectus also included a section with risk factors (such as risks associated with financing) and a disclaimer regarding forward looking statements.
At the end of March 2020, the Company published its annual statement where it was evident that the actual net turnover was significantly lower as compared to the forecasts. By the end of June 2020, the Company announced that its wholly owned subsidiary had filed for bankruptcy.
In their suit, the two investors argued that the board had breached the Prospectus Regulation and caused the investors damage as they would not have subscribed for shares if the information had been in accordance with the Prospectus Regulation requirements. The Court agreed with the investors to a large extent. Its decision referred to the Companies Act pursuant to which a board member may be held liable for damages caused by negligence or intent as a result of incorrect or incomplete information in a prospectus (29 Chapter 1 Section Companies Act).
The Court stated that even though the Analysis and the Presentation had not been presented as “advertisements” (which is a requirement under the Regulation), they were indeed advertisements (marketing) of the offer because, among other things, they had been posted on the website under the headline “IPO” together with the prospectus.
The Court noted that in the beginning of February 2020, at the latest, the board should have realized that the actual outcome deviated significantly from the forecast. The Court was not persuaded by the board’s argument that the board could not have known the outcome until the annual statement was presented at the end of March 2020.
Given that the period to which the forecasts referred had come to an end, it did not matter that the Analysis included a disclaimer regarding forward looking information.
Consequently, the Court state that the Analysis and the Presentation were misleading and in breach of the Prospectus Regulation.
Information to the public regarding an offer (whether written or verbal and whether or not the information is intended to promote the offer) must not include so-called alternative performance measures (APMs) unless these are also included in the prospectus. According to the Court, the forecasts included APMs. Because they were not included in the prospectus, the board was in breach of the Prospectus Regulation (Commission Delegated Regulation) also in this respect.
A prospectus must contain the necessary information material to an investor for making an informed assessment of the assets and liabilities, profits and losses, financial position, and prospects of the issuer. In this case, the board had stated that in the board’s view, there would be sufficient working capital for the next twelve months provided that the share issue was executed according to plan. According to the Court, the working capital statement was misleading as it did not clearly state that it was made on the presumption that the business plan would be realized, among other things.
The Court stated that the board was not liable per se for the actual outcome as compared to the forecasts. However, because the forecasts were regulated by the Prospectus Regulation’s rules on advertisements (marketing), the board had an obligation to continuously monitor the accuracy of the forecasts and inform the market as soon as it was clear that they substantially deviated from the actual outcome. Given that the board had not done so, the board had been negligent.
According to the Court, there was no reason to question that the investors would not have subscribed for shares if the Company’s actual financial situation had been presented to them. Consequently, the investors had suffered damage as a result of subscribing for shares in accordance with their commitments. The precise reasons for the decrease in the share price was not relevant.
Because none of the board members had objected to the information that was presented to the investors, the Court stated that all the board members had caused the damage jointly and were jointly liable for the damage (District Court of Attunda 2022-06-07 case No T 10146-20).
Kilpatrick Townsend has represented the digital media agency Precis Digital in its acquisition of one hundred percent of Bannerboy AB, including its subsidiaries in the UK, the Netherlands and the US. Through the acquisition, Precis Digital is joining forces with Bannerboy and expands to new geographic markets in the U.S. (New York and Los Angeles) and the Netherlands (Amsterdam). The founders of Bannerboy will continue to be active shareholders in the Precis Digital/Bannerboy group. More information about the acquisition is available here.
Kilpatrick Townsends team comprised of Tobias Öd (lead partner), Cecilia Qvist and Viktor Lundin, with assistance from Regan Adamson and Mikail Clark (US legal matters). Further support was from Rutgers Posch law firm and Stevens-Bolton as local counsels in the Netherlands respective in the UK.
Kilpatrick Townsend’s corporate team regularly represents investors, founders, buyers and sellers and we have great experience of tech-transactions. We have been entrusted to work with some of Sweden’s most interesting IT and technology growth companies and their founders.
Kilpatrick Townsend has represented Pixelgen Technologies AB in connection with an investment from Navigare Ventures as lead investor and other investors. Pixelgen Technologies AB develop technologies, products, software, and services for the analyses of biological samples using nucleic acid encoded pixels capable of generating virtual images of a sample. Pixelgen Technologies has raised approximately 6 MUSD and the investment will be used for continuous research and development of Pixelgen Technologies product- and services offer.
Kilpatrick Townsends team comprised of Tobias Öd and Cecilia Qvist.
Kilpatrick Townsends corporate team regularly represents investors, founders, buyers and sellers and we have great experience of venture capital transactions. We have been entrusted to work with some of Sweden’s most interesting growth companies and their founders.
Kilpatrick Townsend has represented Botnia Hydrogen AB, founded by Zelk Energy AB (publ) in connection with an investment from Metacon AB (publ), Lhyfe S.A and Skoogs Energi AB. The investment will be used to establish two electrolysis based and fully integrated hydrogen fueling stations in Piteå and Arvidsjaur. The hydrogen will be used by the heavy transport sector. Botnia Hydrogen AB receives SEK 25,000,000 through the investment and an additional SEK 6,000,000 as a convertible loan from Norrlandsfonden, in total approximately SEK 31,000,000. In addition, Botnia Hydrogen AB has also been granted state support from the Swedish Environmental Protection Agency’s initiative “Klimatklivet”.
Kilpatrick Townsends team comprised of Tobias Öd and Viktor Lundin.
Kilpatrick Townsends corporate team regularly represents investors, founders, buyers and sellers and we have great experience of tech-transactions and transactions within the service sector. We have been entrusted to work with some of Sweden’s most interesting growth companies and their founders.
A board member in a listed company made a late notification following a sale of the listed company’s shares. The transaction amounted to approx. SEK 48 million and the Financial Supervisory Authority (FSA) determined the penalty fee to approx. SEK 8,2 million based on its standardized penalty-fee guidelines for delayed reports. The Supreme Administrative Court, however, questioned the strict use of the penalty-fee guidelines and reduced the fee to SEK 2 million.
According to the market abuse regulation (MAR), board members and other persons in the management of a listed company must report transactions in the company (these persons are often referred to as ‘insiders’). The report must be made to the FSA without delay and not later than three business days after the transaction. The same applies to individuals closely associated to management as well as their companies.
The reporting requirement aims to prevent market abuse, particularly insider dealings, and to increase market trust.
An insider (or a closely associated person) who fails to make a correct report in due time, risks having to pay a penalty fee. MAR and the supplementary Swedish legislation state the maximum amount of the fee that can be imposed in case of a breach. Somewhat simplified, the maximum fee is EUR 500,000 for individuals and EUR 1,000,000 for legal persons (or, if higher, an amount corresponding to three percent of the turnover). However, the law does not state the standard amount for a “typical” breach of the reporting requirement. In practice, though, the FSA has applied a method which in principle determines the size of the fee based on the size (value) of the transaction and the length of the delay, a method that may lead to very high amounts in larger transactions.
In this case, a board member in a listed company and the board member’s own company (the holding company) had sold the listed company’s shares worth approx. SEK 48 million. The sale, which took place in November 2017, was made public via a press release on the same day, and a so-called flagging notification was made on the following day. About a week after the sale (i.e., too late), the board member reported the whole sale to the FSA. In February 2018, he corrected the report by stating that, in fact, he had only sold half of the shares while the other half had been sold by his holding company. The holding company reported its sale on the same day as the filing of the corrected report by the board member. Based on the FSA’s own guidance and standard amounts for determining the penalty fee, the FSA imposed a penalty fee of SEK 2,837,000 and SEK 5,400,000 respectively, given that the reports were not made in time.
The board member and holding company argued that the fee was disproportionate as, among other things, the market already had information about the sale and there had been no intent to hide the fact that the sale had taken place. Furthermore, no profit had been made as result of the delay. But in the FSA’s view, none of this mattered.
The Administrative Court of Appeal agreed with the FSA to a large extent. However, even though the Supreme Administrative Court determined that the breach was not minor or excusable (ignorance about a reporting duty is not an excuse), the Court significantly reduced the amount of the penalty.
When determining the size of the fee, the Court stated that it must strike a balance between imperatives that the fees act as a deterrent (i.e., be high) and the fees be proportionate in relation to the sanctions that apply to criminal market abuse. Further, while the intention is not for the FSA to make any in-depth analysis of subjective circumstances, it must consider whether the particular breach is more or less reprehensible. Also, while it must be possible to impose a penalty fee in case of long delays, where there is hardly any value in the information in the report, there may be reasons not to take into account the full length of the delay. In addition, the size of the transaction must be considered. However, the Court stated that the FSA’s use of standardized penalty-fee guidelines raised concerns as the guidelines result in considerable amounts in situations where there is a longer delay in reporting larger transactions and since the use of the guidelines means that other circumstances are not taken into consideration. In this case, the breaches were serious given the size of the transaction and the length of the delay. And though there was no risk of any actual damage, there was indeed a risk for reduced market trust, according to the Court. But, given that there was no intent to hide the transaction and that no profit resulted from the delay, the Court determined that the FSA’s penalty fees were disproportionate (they corresponded to almost half of the maximum amounts). Thus, the Court significantly reduced the amounts of the penalty fees to SEK 500,000 and SEK 1,500,000 respectively (Supreme Administrative Court 6143-20).
This information does not, and is not intended to, constitute legal advice.
New rules are introduced to make it possible for Swedish limited liability companies to change their domicile to another EU or EES country by way of a cross-border conversion. At the same time, the rules for cross-border mergers and divisions will be updated. The purpose is to facilitate cross-border restructurings.
Many of the proposed laws apply also to economic associations and financial companies. The new laws are proposed to enter into force on January 31, 2023 and are based on EU directive 2019/2121 of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions.
A cross-border conversion entails that a Swedish limited liability company (private or public) is converted into a foreign company or, vice versa, that a foreign company is converted into a Swedish limited liability company. No new company is formed and no company is dissolved. Instead, the same company continues to exist in a converted form in another EES member state. To a large extent, the rules will correspond to those that apply to cross-border mergers and divisions, such a requirement to prepare a plan with the terms of the conversion, shareholder approval and a notice to the creditors of the company and permission to execute the plan.
As with cross-border mergers and divisions, a shareholder who has voted no to the division will be entitled to have its shares redeemed and may also claim additional compensation before a court.
Already today, Swedish limited companies may merge with a corresponding legal entity in another EES member state but the proposed legislation includes certain changes, such as for example the following:
A division entails that a limited company is divided into two or more limited companies. While the Companies Act already regulates domestic divisions, new provisions are introduced to enable cross-border divisions.
For both domestic and cross-border divisions, there will be three kinds of divisions:
Thus, both a domestic and a cross-border division may be executed by way of a complete division, a partial division or a separation. In a cross-border division, a company’s assets and liabilities will – completely or partially – be transferred to one or more corresponding legal entities within the EES. To a large extent, the procedure will correspond to a cross-border merger. However, the cross-border division plan must, among other things, include a description of the division of assets and liabilities between the companies as well as information on the treatment of assets and liabilities not explicitly allocated in the plan (e.g. unknown debts).
The Act on Involvement of Employees in Cross-border Mergers is amended to cover also cross-border mergers and divisions. Among other things, the new legislation will enable the Companies Registration Office to reject an application to execute a cross-border reorganization if the purpose of the reorganization is to circumvent employee participation rights.
This information does not, and is not intended to, constitute legal advice.
Kilpatrick Townsend has represented the shareholders of Tjuren Projektpartner AB, a profiled consultancy company offering services within project management and project planning, in connection with a sale of the company to Rebellion Capital. Tjuren Projektpartner was founded in 2010 and had, during the last year, a revenue of SEK 102 million with SEK 25 million EBITDA. The founders of Tjuren Projektpartner AB will continue to be active in the company.
Kilpatrick Townsends team comprised of Tobias Öd and Cecilia Qvist.
Kilpatrick Townsend’s corporate team regularly represents investors, founders, buyers and sellers and we have great experience of tech-transactions and transactions within the service sector. We have been entrusted to work with some of Sweden’s most interesting IT and technology growth companies and their founders.
