The Republic of Croatia is facing the biggest restructuring of companies in difficulties with substantial involvement of international financial investors. Restructuring is implemented according to a newly adopted Act on extraordinary administration proceeding in companies of systemic significance for the Republic of Croatia. The latter Act was adopted in the aftermath of the business failure of the major retailer i.e. the Agrokor group. The restructuring of the group has soon become a very sensitive political issue and a topic of heated public discussions. The Act has been heavily criticized both by legal scholarship and by the public for being designed for a single group of companies in Croatia, as well as for being incoherent with constitutional principles and existing insolvency legislation. It created a type of debtor-not-in-possession in-court extraordinary administration designed for systemic significant (group of) companies in state of insolvency or pre-insolvency. Departing from this background, this paper aims to provide a wider restructuring picture by comparing three different legal models of preventive corporate restructurings for firms in difficulties: the German protective shield proceedings, the English schemes of arrangment and the Italian extraordinary administration. The authors attempt to evaluate each model’s effectiveness on the basis of relevant studies which indicate their success rate. As far as the Croatian Act is concerned, the paper provides an overview of the development of the preventive restructuring law, while questioning certain aspect of the Act, especially the concept of the company of systemic significance.
The interplay between contract and state corporate law in shaping corporate governance is not a novelty. In this article author questions the impact of private ordering through the shareholders' agreement (further in text: SA) on corporate governance and possibly on the director's duties and liabilities. The author argues that the SA might have far-reaching consequences for all the stakeholders and third persons as there are only a few limitations to its content, mainly referring to the mandatory rules of corporate law and general limitations of contract law. It means shareholders can impose additional rules for governance to directors, for transfer of shares, employment policy, and others. The author shall question whether SA can modify the articles of association. This article aims to reassess the balance between corporate and contract law instruments for the companies' governance. The author argues that analyzing corporate governance without considering contractual tools, such as SA, becomes incomplete and seriously undermines rethinking fundamental principles of corporate governance, such as the issue of directors' liability.
The importance of family businesses in the Croatian economy is well known. In this respect, Croatia is part of the larger picture in which family businesses are considered of fundamental importance to the European Union’s economy. The most specific feature that sets Croatian family businesses apart is that they are all relatively young, as they were mostly established in the 1990s. This is due to the socio-economic development of Croatia as a country that was part of the former Yugoslavia. In this regard, although the traditions of certain crafts and products are significantly older, the modern legal vehicles through which such business is conducted, that is, Croatian companies, are only around thirty years old. This fact contributes to the hypothesis that governance issues related to family businesses are an underdeveloped legal area. However, the need to address the specific needs of Croatian businesses is on the rise, as a significant number of the founders are now retiring, and the issue of successful transfer of these businesses has never been more important. The goal of this article is to question whether available legal instruments for enhancing the governance of family businesses from comparative law and practice such as family constitutions and family councils can be applied in Croatian practice as well. To this end, this study analyses the most significant legal forms in which a family business can be established in Croatia: crafts, family farms, and all types of commercial companies (with an emphasis on limited liability and joint-stock companies). Analysis of the Croatian legal framework from the perspective of family businesses will contribute to the comparative discussion regarding the specific legal needs and challenges of such businesses.
In recent years, the need for a systematic and harmonised way of preventing unfair trading practices (hereinafter UTPs) in the food supply chain has intensified at the European level due to many diverging national legislative solutions. These efforts resulted in the Directive 2019/633 on unfair trading practices (UTPs) in business-to-business relationships in the agricultural and food supply chain. Croatian UTPs Act, enacted already in 2017, was just amended to conform with the requirements of the named Directive. Generally speaking, the UTPs Act sets out rules and measures to prevent the imposition of UTPs in the food supply chain, establishes the list of such practices and sets up the enforcement structure and sanctions. Comparing the Directive to the UTPs Act, the authors discuss the outcome of the transposition pointing to the incorrect scope of application of the national legislation, its potential consequences and de lege ferenda solutions. Further, the authors anlyse the legal nature of the adopted UTPs system concluding that it does not fit into the traditional systematisation of laws jeopardising the coherency of the intricate and complex relationship between relating legislative frameworks. New rules are diverging and overlapping with both competition and contract law, leading to possible undesirable spill over effects in contract law, and unresolved concurring competence with competition law. Authors suggest precautionary interpretative measures as a means of solving the identified legal conundrum.
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