by DLA Piper - Jasna Zwitter-Tehovnik, Partner and Joze Vranicar, Associate
During the 1990s and up to the beginning of the recent financial crisis, the economies of Central and Eastern European countries experienced rapid growth. The privatisation of state-owned industries and the general opening-up of the market attracted foreign investment. Austrian banks invested heavily in the area and as a result, now hold a significant number of non-performing loans, secured on assets located within the CEE. The challenge, for those advising them, is to navigate around the rules and restrictions of each country’s enforcement laws in order to make the best recovery.
This article considers the restructuring of an Austrian law facility secured on assets in Croatia. It provides an example of the difficulties which lenders typically face in this region and highlights the changing appetite for each possible solution. Notable among those solutions is the use of a restructuring trust; an approach that is relatively well-known in Germany, but less familiar to restructuring professionals in other jurisdictions.
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