Learnlight, a global EdTech player and a SYNOVA portfolio company, strengthens its position as a leading provider of blended and virtual training solutions through the acquisition of BLCC.

The Racine deal team was led by Partner Anthony Van der Hauwaert, with support from Alexis Debier and Katrien De Vos.

For more information, see https://www.learnlight.com/en/articles/learnlight-acquires-belgian-language-training-provider-blcc/

The post Racine assist Learnlight in the acquisition of Business Language and Communication Centre first appeared on Racine.

The impacts of rising interest rates and persistent inflation are taking an increasing toll. Recently, influencer platforms Influo and Connus, dark kitchen Casper, crypto platform Bit4You, and job platform Karamel.career have gone bankrupt. Other startups are quietly sold (often for a pittance) to avoid public humiliation or bankruptcy.

Investment Tips for Startups

1. Caveat Emptor: whether it’s a crowd loan, win-win loan, convertible loan, or direct equity investment, do your due diligence before investing in a startup. Assess the risks. Do not rely solely on the information provided by the involved company or mandated broker.
2. Diversify your investments: typically, only a small percentage of startups succeed. This remains risk capital. Do not forget this.
3. Be proactive and monitor your investment: ask questions and insist on regular updates.

What to do if things start to go wrong?

As a creditor:

• Consider suspending deliveries or requiring advance payments. Assess your recourse options (retention of title, pledge).
• If there is still trust, consider converting your claim into equity to gain (more) control over the startup.
• Do not forget to timely file your claim (in judicial reorganization or bankruptcy).

As a director:

• If the continuity of a company is at risk, directors must intervene in a timely manner (e.g., apply the alarm bell procedure or mandatory filing for bankruptcy upon meeting insolvency conditions).
• There are various avenues to consider for rectifying the situation, such as restructuring, selling shares or assets, restarting via judicial reorganization, liquidation, silent bankruptcy, and bankruptcy. This requires thorough planning and advice.
• Do not forget your directors’ liability insurance.
• Decisions made in the months leading up to a bankruptcy can affect potential director liability afterward. Directors should not take this lightly.

As an investor:

• Typically, investors are left empty-handed. Startups usually have little tangible fixed assets, and investors are among the last to be paid in a restructuring or bankruptcy.
• In the case of a win-win loan, a certain percentage of the investment can be recovered from PMV or the government through a tax credit in case of default. If the conditions for the received tax benefits are not met, the win-win investor risks losing these benefits.
• In case of manifest errors, the board can potentially be held liable, but this is less straightforward for startups due to the inherently risky nature of such ventures.

Seek proper guidance

The documentation regarding an investment in a startup is often complex, and not everyone understands the legal jargon or knows their rights. Insolvency is a distinct area of law that is rapidly evolving. It is advisable to seek guidance from an experienced lawyer at the time of investment or during restructuring.

Need assistance?

Do you have questions about investing in a startup? Are you a company in difficulty, a director, an investor, or a creditor of a struggling company? Do not hesitate to contact us. We have extensive expertise and are happy to assist you.

Anthony Van der Hauwaert, lawyer – partner | Racine

The post Navigating startup bankruptcies: risks and investor advice first appeared on Racine.

Racine is proud to have assisted the shareholders of decorative wood panel wholesaler Gesibois with the combination of their activity with that of Vanrobaeys and their subsequent reinvestment in the combined group company Wopaco, one of the portfolio companies of the private equity fund Sofindev.

The combined group will realize about € 75 million in revenue with more than 100 employees, operating from two locations, in Izegem and in Sint-Pieters-Leeuw, leading to one of the largest specialized wholesalers of decorative wood panels in Belgium.

The Racine deal team consisted of Anthony Van der Hauwaert and Sien Vermeesch.

Read press coverage published by De Tijd.

The post Racine assists shareholders of Gesibois on sale and reinvestment in Wopaco first appeared on Racine.

BMC Benelux is one of the largest builders’ merchants in Belgium operating under the Youbuild and Mpro brands and owned by German PE fund Aurelius.

Vandevoorde Bouwmaterialen is a family owned building materials merchant based in Wortegem—Petegem.

This acquisition follows the acquisition earlier this year of builders’ merchant De Rycke which Racine also successfully supported.

Press coverage can be found here.

The post Racine assists BMC Benelux with the acquisition of Vandevoorde Bouwmaterialen first appeared on Racine.

Racine Brussels is proud to have assisted leading Belgian dental clinics group Odontolia (majority owned by DLF Venture, the private equity vehicle of family de Mévius) on the minority investment by French PE fund Siparex.

Odontolia is a leading and fast growing Belgian dental group operating 36 dental clinics across Belgium.

Racine provided Odontolia with vendor due diligence support and the negotiation of all transaction documentation. The Racine team was led by partner Anthony Van der Hauwaert with the support of Sien Vermeesch and Alexis Debier.

Read press coverage published by l’Echo and De Tijd.

The post Racine assists Odontolia on investment by French PE fund Siparex first appeared on Racine.

Racine Brussels advised and assisted Lecluyse, a Belgian family owned company established in 1958 active in the production of window blinds, with the acquisition of the French blinds business of Solar Screen, Europe’s largest distributor of self-adhesive films.

The Racine team was led by partner Anthony Van der Hauwaert with the support of Sien Vermeesch and Alexis Debier.

The post Racine assists Lecluyse with the acquisition of Solar Screen France first appeared on Racine.

The retail park encompasses ca. 10,000 sq.m. of shopping area divided over 9 stores and is let to chains such as Carrefour, Hubo, JYSK, Vanden Borre Kitchen, Impermo, BNP Paribas and Sushiworld.

Read press release.

This transaction follows the earlier acquisition this year of the shares of Immo Bree Invest nv, the company controlling the Gerkens retail park in Bree.

Gerkenspark encompass together ca. 11,500 sq.m. of shopping area divided over 9 stores, including Jumbo, McDonald’s, Jysk, X2O, Torfs, ZEB, vanHaren, Yess! and Impermo.

More at: https://www.pertinea.com/news/bree-draft/

Racine assisted Pertinea on both transactions with a multidisciplinary team led by partner Anthony Van der Hauwaert with the support of Stijn Claeys, Sien Vermeesch, Arne Baert, Joeri Leten and Alexis Debier.

We would also like to thank the colleagues at Cazimir for their tax support.

The post Racine assists Pertinea Property Partners on two of its latest acquisitions first appeared on Racine.

The Belgian legislator has very recently approved new legislation that marks a new step in the regulation of cryptocurrencies. It concerns, on the one hand, the Law of 1 February 2022 amending the Law of 18 September 2017[1] which entered into force on 21 February 2022 (the “AML Act”) and, on the other hand, the Royal Decree of 8 February 2022[2] which will enter into force on 1 May 2022 (the “Royal Decree”). The main features of the new legislation can be summarized as follows:

1.       A further extension of the scope of the anti-money laundering Law[3] to all ATMs located on Belgian territory;
2.       A prohibition for non-EEA persons to provide crypto services on the Belgian territory;
3.       A legal framework that defines the conditions that cryptocurrency service providers must meet (the registration requirement).

This article addresses the 3 different features of aforementioned legislation.

2.       Expanding the scope of the anti-money laundering law

On 19 June 2018, the Fifth European Anti-Money Laundering Directive appeared in the European Official Journal.[4] This directive extended the personal scope of the legislation to providers of services related to exchange transactions between virtual and fiduciary currencies and providers of crypto wallets, hereafter referred to as “crypto service providers”. The fifth Anti-Money Laundering Directive was transposed into the Belgian anti-money laundering Law through the Act of 20 July 2020 containing various provisions to prevent money laundering and the financing of terrorism and to restrict the use of cash.

The Belgian anti-money laundering Law stipulates, since the implementation of the aforementioned directive, that crypto service providers are required to register with the supervisory authority, the FSMA, before they can offer their services on Belgian territory. The problem here is that, in accordance with the territorial scope of the anti-money laundering Law, only those providers established in Belgium are subject to the law. The providers of crypto services that do not have a branch office, nor a permanent establishment in Belgium escape from the registration obligation and the control of the FSMA. De facto, this means that many actors in the crypto sector escape the registration obligation, including, for example, providers using so-called “ATMs” (Automated Teller Machines).

Indeed, according to the case law of the Court of Justice of the European Union, ATMs are not necessarily considered to be a permanent establishment. Such ATMs therefore only fall under the FSMA’s supervisory authority if they are operated by a person or company governed by Belgian law or by the law of another EU member state, which has a permanent establishment in Belgium. In other words, foreign providers operating these ATMs are not subject to any control in Belgium.

The solution provided by the AML Act is to equate ATMs to a permanent establishment. As a result, crypto service providers who offer their services through an ATM located on Belgian territory will also be deemed to be established in Belgium and therefore be required to register with the FSMA.

3.       Prohibition of crypto service providers from third countries

The second major innovation is that providers of crypto services governed by the law of a third country will be prohibited from offering such services as a professional activity. Third countries are defined in the anti-money laundering Law as any state that is not a member of the EEA. Again, the reasoning here is that providers of such services would not be subject to Belgian law if they are not physically established in Belgium. In other words, providers of crypto services from third countries may not offer their services here because Belgium cannot control them.

Such a ban is obviously very far-reaching. However, the Belgian legislator justifies its decision by stating that this ban has also been introduced in Dutch legislation and that the same ban is also being considered at the European level in the planned Markets in Crypto Assets (“MiCa”) regulation[5], which will introduce an overall European framework for the regulation of cryptocurrencies. So we could say that the Belgian law is proactive, even though the “MiCa” regulation has not yet been formally adopted.

4.       The registration requirement

Already discussed above was the obligation for crypto service providers based in Belgian territory to register with the FSMA.

In order to register with the FSMA as a provider of crypto services (and consequently to be able to offer their services on Belgian territory), providers will have to comply with strict conditions. These include the requirement of using specific corporate forms, minimum capital requirements, fit & proper criteria for the management and certain shareholders of the crypto service providers, appropriate governance structures, etc. The FSMA has supervisory power over registred providers.

As already mentioned, the Royal Decree will enter into force on 1 May 2022. Providers of crypto services that already offer their services in Belgium and have a physical establishment on the Belgian territory before 1 May 2022, may continue to offer their services if:

·         they notify their activity to the FSMA before 1 July 2022, and
·         they submit a full registration file to the FSMA by 1 September 2022.

5.       Criminal Sanctions

Finally, it is important to note that the AML Act introduces new criminal penalties into the anti-money laundering law.

If a crypto service provider subject to registration offers services without being registered with the FSMA, this provider risks a prison sentence of one month to one year and/or a fine of EUR 400 to EUR 80,000. An identical criminal sanction is provided for providers governed by the law of a third country who violate the prohibition on providing their services on Belgian territory.

6.       Conclusion

The goal of crypto currency regulation is to protect the user of crypto services as best as possible. We can say that the legislative intervention that we discussed contributes to this objective. From now on, crypto service providers will only be able to offer their services on Belgian territory if they meet the conditions for registration with the FSMA. Moreover, once they are registered with the FSMA, they will be subject to strict supervision. Providers governed by the law of a non-EEA country are no longer permitted to offer their services on Belgian territory.

Crypto service providers will therefore have to assess whether they can continue to offer services in Belgium and, where applicable, prepare for registration with the FSMA.

For more information on this subject, you can always reach out to one of our lawyers of the corporate practice group.

[1] Law of 1 February 2022, amending the Law of September 18, 2017, on the prevention of money laundering and the financing of terrorism and on restricting the use of cash to introduce provisions around the status and supervision of providers of virtual currency and fiduciary currency exchange services and providers of custodial wallets, Official Gazette February 11, 2022, 9.941.
[2] RD of 8 February 2022 on the status and supervision of providers of virtual currency and fiduciary exchange services and providers of custodial wallets, Official Gazette February 23, 2022, 16.166.
[3] Act of 18 September  2017 on the prevention of money laundering and terrorist financing and limiting the use of cash, Official Gazette October 6, 2017, 90.839.
[4] Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU.
[5] Proposal (Comm.) for a Regulation of the European Parliament and of the Council on crypto asset markets and amending Directive (EU) 2019/1937, 24 September 2020, COM(2020) 593 final 2020/0265 (COD) (https://eur-lex.europa.eu/resource.html?uri=cellar:f69f89bb-fe54-11ea-b44f-01aa75ed71a1.0007.02/DOC_1&format=PDF )

The post Belgium takes a new step in regulating cryptocurrencies first appeared on Racine.

The annual general meetings of legal entities in which the participants classically meet physically and which, for legal entities with a financial year ending on 31 December, must be held no later than 30 June, therefore pose a risk.

In the spring of 2020, the legislator already provided for additional temporary flexibility for general meetings via RD nr. 4 (koninklijk besluit 4 van 9 april 2020 houdende diverse bepalingen inzake mede-eigendom en het vennootschaps- en verenigingsrecht in het kader van de strijd tegen de Covid-19/ arrêté royal 4 du 9 avril 2020 portant des dispositions diverses en matière de copropriété et de droit des sociétés et des associations dans le cadre de la lutte contre la pandémie Covid-19). We refer to our earlier contribution (https://racinebrussels.eu/nl/flexibiliteit-bij-de-organisatie-van-algemene-vergaderingen-en-bestuursvergaderingen-tijdens-de-corona-crisis/).

Given the continuation of the pandemic, it is not surprising that the legislator is again taking measures concerning general meetings.

Paradoxically, the new measures introduced by chapter 11 of the Act of 20 December 2020 containing various temporary and structural provisions relating to justice in the framework of the fight against the spread of the coronavirus COVID-19 (wet van 20 december 2020 houdende diverse tijdelijke en structurele bepalingen inzake justitie in het kader van de strijd tegen de verspreiding van het coronavirus COVID-19 / loi du 20 décembre 2020 portant des dispositions diverses temporaires et structurelles en matière de justice dans le cadre de la lutte contre la propagation du coronavirus COVID-19) (the “Act of 20 December 2020”), which entered into force on 24 December 2020, are somewhat stricter than before.

In this contribution, we will first go over the new rules and then explain why these measures are stricter than before.

THE NEW RULES

1. General meeting via electronic means of communication without a provision in the articles of association.

The managing body of a private limited liability company (BV/SRL), cooperative limited liability company (CV/SC), a public limited liability company (NV/SA), an association (VZW/ASBL), and an international association (IVZW/AISBL) can offer shareholders, members, and other persons entitled to attend, to participate remotely in the general meeting via an electronic means of communication without the need for a provision in the articles of association.

To this end, articles 5:89 (BV/SRL), 6:75 (CV/SC), and 7:137 (NV/SA) of the Belgian Code of Companies and Associations (“BCCA”) were amended and new articles 9:16/1 (VZW/ASBL) BCCA and 10:7/1 (IVZW/AISBL) BCCA were introduced.

Minimum requirements for the electronic means of communication

The electronic means of communication used must:

• allow for verification of the capacity and identity of the participant using it.
• enable the participant at least to take direct, simultaneous, and uninterrupted notice of the discussions at the meeting and, insofar as applicable to that participant, to exercise the right to vote concerning all points on which the meeting is required to make a decision.
• enable the participant to participate in the deliberations and to ask questions.

Until 30 June 2021, electronic means of communication may also be used which do not allow participants to take part in the deliberations and ask questions insofar as the managing body justifies in the convocation why the company/association does not have an electronic means of communication at its disposal that allows this. In such a case, if the participant wishes to participate in the deliberations and ask questions, he must physically attend the general meeting.

Importance of the convocation and the website.

The managing body must include in the convocation a clear and precise description of the procedures relating to remote participation. These procedures must also be mentioned on the company’s/association’s website.

Choice of electronic means of communication.

A sophisticated electronic means of communication with access code is not mandatory and is unnecessary for general meetings with a limited number of participants where the participants know each other.

Tele- and video conferencing applications such as Teams, Zoom, Skype, or similar systems or even a telephone call with several participants are sufficient as long as the above requirements can be met.

Who can participate remotely?

All participants in the general meeting, including the directors and the statutory auditor, if any, can take part in the general meeting electronically, except for the members of the bureau.

Minutes

If technical problems occur during the general meeting, they must be recorded in the minutes of the general meeting.

2. Written general meeting and remote voting in advance of the general meeting possible for associations (VZW/ASBL) and international associations (IVZW/AISBL)

The possibility of remote voting in advance of the general meeting has been introduced for the associations (VZW/ASBL) and the international associations (IVZW/AISBL). However, this requires a provision in the articles of association, as is also the case for the NV/SA, CV/SC, and BV/SRL.

Finally, for the associations (VZW/ASBL) and the international associations (IVZW/AISBL), it is now also possible to hold a purely written general meeting, just like in the BV/SRL, CV/SC, and NV/SA. All members must then sign these written resolutions for approval. This method is open to all general meeting resolutions except amendments to the articles of association.

WHY THE REGULATION IS STRICTER THAN BEFORE.

Several commentators present the change in the law as a flexibilization that makes it possible to hold a general meeting by tele- and/or videoconference for companies that do not have a provision on this in the articles of association. This view cannot be followed.

The legislator had previously indicated that the requirements set out in (the previous versions of) articles 5:89 (BV/SRL), 6:75 (CV/SC) and 7:137 (NV/SA) BCCA did not apply to general meetings held using tele- and/or video conferencing, and that these were therefore already valid insofar as they complied with the general principles applicable to general meetings.

When RD nr. 4 was introduced, the following was considered in the article-by-article discussion:

“Articles 5: 89 (BV/SRL), 6: 75 (CV/SC) and 7: 137 (NV/SA) BCCA do not deal with meetings via video or telephone conferences with a limited number of persons, where everyone knows and can identify each other, and which count as actually held meetings (no unanimity is required, as for a written meeting).

Meetings via video or telephone conferences with a limited number of persons remain perfectly possible. The general principles that apply to general meetings stipulate that for a meeting to be valid, the shareholders or members must be able to deliberate, speak and exercise their voting rights. The implementation of these principles is also possible by telephone or video link, combined with e-mail for the exchange of written documents.”

(Free translation of the Dutch version of the text)

Because the Act of 20 December 2020 now includes general meetings by video or telephone conference among those referred to in articles 5: 89 (BV/SRL), 6:75 (CV/SC) and 7:137 (NV/SA) BCCA, this Act implies a tightening of the rules for general meetings using tele- and/or videoconference.

After all, under the general principles applicable to general meetings, a general meeting at which the members of the bureau did not meet physically was possible, and article 6 of RD nr. 4 also provided for this possibility. The requirement for the members of the bureau to meet physically is somewhat strange since, given the COVID-19 pandemic, as many contacts as possible should be avoided.

The reason given in the preparatory works for this mandatory physical presence, namely that the members of the bureau should sign the minutes, is not conclusive. After all, the shareholders who can participate remotely must also sign the attendance list, which apparently can still be exchanged by e-mail.

As far as this is possible under the articles of association, one could opt to have one person perform the various tasks of the bureau to still retain the possibility of all the participants participating remotely.

Finally, the question can also be asked as to why electronic participation cannot be made compulsory by the managing body, and certainly for the period when the pandemic is still raging.

Currently, participation via an electronic means of communication is only provided as an option, which may give rise to problems when a person entitled to participate insists on physically participating in the general meeting.

If the managing body also makes use of the temporary provision to use electronic means of communication that do not allow participation in the deliberations or the asking of questions, the persons entitled to participate who do want to exercise those rights are de facto forced to physically participate in the general meeting, which is also not desirable given the pandemic.

Some adjustments to the regulation seem desirable.

Want to find out more about this subject?

The Racine team will gladly assist you.

The post Requirements for your general meeting by videoconference (and they have become stricter) first appeared on Racine.

Racine assisted the owner, Mr. Huysmans, on the sale of all the shares and real estate connected to the supermarket AD Delhaize in Humbeek to the Colruyt Groep.

This transaction is unique in its kind as the largest AD Delhaize from Belgium is acquired by rival retailer Colruyt.

The team from Racine was headed by partner Anthony Van der Hauwaert with the assistance of senior associate Sien Vermeesch and associate Louise Geerebaert.

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