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Corporate Finance/M&A

Denmark

Overview
Including: Private Acquisitions; Public Takeovers; Corporate Reorganizations

It is becoming increasingly common in Denmark for the parties to an M&A transaction to take out insurance in order to cover potentially deal-breaking issues, and to provide certainty and finality. Generally, however, it is not an option for deals with a premium of below €150,000.

It is unclear whether Danish limited liability companies can give representations and warranties to share subscribers in private placements. Generally, the view is that representations and warranties from the issuing company in private placements fall within the scope of legal obligations to which a Danish company can validly commit, since they are required by the international investor community.

The Danish Data Supervisory Agency has stated that the release of non-sensitive personal data to a potential purchaser and its advisers is compatible with the Danish Act on the Processing of Data, provided that those with access to the data have executed appropriate confidentiality agreements.

Employment & Labour

Denmark

The Act on Employers’ Use of Non-solicitation and No-hire Clauses came into force on July 1 2008. The act lays down a number of requirements for use of non-solicitation and no-hire clauses (ie, clauses which are used to prevent a company or person from soliciting the employees of another company).

At present, there are approximately 375 US companies with subsidiaries in Denmark. Questions as to whether the Sarbanes-Oxley Act Code of Conduct is actually applicable in Denmark remain unanswered. The issue of whistleblowing and the proportions it has taken in the Code of Conduct (eg, anonymous hotlines) has raised particular concern.

A recent case before the Maritime and Commercial Court has resulted in political pressure from the unions to abolish all agreements between companies which prevent the recruitment of each other's employees. These agreements are known as no-hire clauses.

Parliament has adopted a number of amendments to the Public Companies Act to achieve greater transparency with regard to the incentive plans of listed companies. Section 69b of the act now includes a special provision imposing certain duties on the company in respect of incentive plans for the board of directors and the management board.

Section 17a of the Salaried Employees Act 1964 incorporates the normal legal practice of granting employees whose employment terminates in the course of a financial year, and who have earned a bonus, share of profits or similar payments, a proportionate share of such payments at the effective date of termination of their employment.

In 2004 the Supreme Court rendered two key judgments relating to stock options for employees. However, these two judgments have not settled all the problems raised by stock options and other equities, and a significant number of cases dealing with these issues are still pending before the Danish courts.

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Insurance & Reinsurance

Denmark

Overview
Including: Social Security System; Mandatory Insurance; Private Insurance and Pensions; Taking Out Insurance; Property and Liability Insurance; Personal Insurance

No guarantee fund exists to protect policyholders in the event that an insurance company goes bankrupt. A new bill establishes a private, independent fund to deal with insurance claims that are not covered in the event of the bankruptcy of a non-life insurance company. All non-life insurance companies set up in Denmark must be a member of, and contribute to, the fund.

A parliamentary committee has issued a White Paper concerning the Danish Insurance Contracts Act. Although the committee has recommended adjustments or specifications to protect the interests of policyholders, rather than the drafting of an entirely new act, it remains to be seen whether a majority of Parliament will adopt the recommendations.

Suggested amendments to the Liability for Damages Act should be considered in light of the Industrial Injuries Insurance Act and contemplated proposals for separate amendments.

A recent case before the Maritime and Commercial Court concerned a carriage of insulin which was exposed to frost. The importer claimed full damages against the carrier on the grounds of its carrier liability insurance (open policy).

According to a ruling by the Danish Competition Authority, legal aid insurance will no longer form an automatic part of domestic consumer insurance products. The ruling follows an unsuccessful action brought by the Association of Danish Insurers concerning group exemption from the ban on non-competitive agreements.

An amendment to the Danish Insurance Contracts Act, which aims to clarify insurance claims in cases of permanent disability, is expected to be passed by Parliament in June 2000. It is the first proposal of a Government Commission established in order to reform the act completely.

Shipping & Transport

Denmark

Overview
Including: Damaged Cargo; Merchant Shipping Act; Choice of Law and Paramount Clauses; Freight Forwarders; Transport Conventions

A recent ruling highlights the fact that carriers must be informed when goods are of particular value and special security measures must be taken. The Supreme Court held that the theft of designer goods from an area that was checked by security guards only three times a night was not attributable to the carriers' gross negligence.

The Maritime and Commercial Court has ruled in favour of railway carriers in a delivery dispute, notwithstanding a leakage of wine from a tank container in transit.

The Western Division of the Danish High Court found in favour of plaintiffs who had experienced airline delays. The court was not satisfied that the airline had taken all necessary measures to avoid the loss incurred by the travellers due to the delay.

Following damage to meat products in transit, the goods' insurers paid compensation and instituted legal proceedings claiming indemnification against the transportation firm for the full amount. The Maritime and Commercial Court ordered the transportation firm to pay.

The Maritime and Commercial Court has ruled on the issue of whether a ship broker and shipping firm were liable for costs incurred in connection with the retention of goods in Pakistan.

A recent case before the Maritime and Commercial Court concerned a carriage of insulin which was exposed to frost. The importer claimed full damages against the carrier on the grounds of its carrier liability insurance (open policy).

More updates >