tal through share issues, which would
create further work for law firms. But
their diminished stock prices make this
a less attractive option, which is why activity levels have been limited. Capital
markets teams have seen an increase in
securitization work, however, with banks
keen to repackage assets. (Some governments have additionally used private securitizations as collateral for European
Central Bank liquidity schemes.)
With traditional liquidity still tight,
corporations have also been tapping the
bond markets to meet funding requirements. French companies have been particularly active in this area. For example,
Paris-based spirits and wine producer
Pernod Ricard recently sold a $1.5 billion
offering of senior unsecured notes.
Freshfields senior partner William
Lawes feels that the practice diversity of
modern law firms means that they are
well-placed to ride out the storm. “We
were unbelievably busy during the first
year of the financial crisis,” he says. “We
would expect to be equally busy if the
current situation gets worse, but we obviously hope—for everyone’s sake—that
conditions improve.” —Chris Johnson
weak,” Jordan says, noting that an EWC
cannot impose a Europe-wide outcome on a
company’s national representatives.
Still, the information-sharing requirements
of the new directive are strict. The information supplied must be sufficient to enable
the EWC to assess the possible impact of
the company’s action, and to prepare for
consultations with senior management. Furthermore, consultation must be a two-way
process involving “an exchange of views”—
not just a pro forma or after-the-fact meeting.
“It is very important to allow the EWC to
digest the information and have time for
questions,” says Homme ten Have, an employment partner with NautaDutilh in Amsterdam. He advises companies to invest time in
establishing a relationship with EWC leaders.
The growth of EWCs could even have benefits, ten Have believes: “It allows you to get
more understanding for your decisions, if you
have discussed them with the works council.”
—Philippa Maister
SPAIN
In a Lather over Seizures
Did the Spanish antitrust agen- cy go too far when it investi- gated several companies for
alleged price-fixing? The local subsidiary
of Colgate Palmolive Company thinks so,
and has argued that a raid of its offices
was illegal. But a Spanish court ruled this
fall that while the Comisión Nacional
de la Competencia shouldn’t have taken
some documents in the raid, the search
was still valid as long as the CNC didn’t
use those documents as proof in its case
against Colgate Palmolive España.
That doesn’t make sense to Col-
gate counsel Rafael Baena, the direc-
tor of competition and E.U. law at
Ashurst’s office in Madrid. “Once
an inspector reads a document
that is unrelated to the in-
vestigation or is covered by
lawyer-client confidential-
ity, even if he returns it, he
still has read it,” Baena
says. “Are we supposed
to ask him to forget it?”
Still, the September
decision in the Colgate
case marks an advance
over a 2009 ruling in a
similar action brought by
the Spanish Cosmetic
Toiletry and Perfumery
Association. The trade group,
known as Stanpa, was also the target of a
CNC raid in which materials were seized
from its office [“Information Wants to Be
Free,” Winter 2010]. In both cases, the
High Court of Spain said that the raids
were okay as long as the CNC didn’t use
any illegally seized info. But in the Col-
gate case, the court put more pressure
on the CNC to stick to the limits of its
search order, saying that just because a
search may be difficult doesn’t mean that
inspectors can ignore companies’ rights.
The CNC ramped up its price-fixing
investigations when a new leniency law
went into effect in 2008. Companies ea-
ger to win a pass for themselves flooded
the commission with revelations of al-
leged cartels. After receiving a tip from
Henkel Ibérica, for example, the CNC
began an investigation into a suspected
cartel of makers of shower and bath
liquid soap. Henkel, the Spanish sub-
sidiary of a German consumer products
company, said that it and its competi-
tors had colluded to reduce container
sizes while keeping prices the same.
The CNC conducted several raids
of alleged cartel members, and eventu-
ally lodged fines against the suspected
price-fixers. Most of the companies
appealed their fines, but Colgate and
Stanpa filed an appeal of the CNC’s
inspection methods, claiming that the
agency had violated search-and-seizure
laws and lawyer-client confidentiality.
According to Baena, CNC inspectors
copied entire hard drives in the Col-
gate raid, including material not re-
lated to the inspection and documents
covered by lawyer-client privilege.
The High Court agreed with
Colgate, ruling that the inspec-
tors seized documents outside
the investigation’s param-
eters, and that the search
was disproportionate to
the investigation’s guide-
lines. While inspectors
are allowed to find docu-
ments that they didn’t
previously know about,
that doesn’t give inspec-
tors carte blanche, the
court said. The court
also found that the CNC
violated Article 24 of
the Spanish Constitution
by not allowing Colgate’s lawyers to
be present when the search crite-
ria were discussed among inspectors.
But in the same ruling, the court said
that the search was still valid as long
as the CNC did not use any of the ille-
gally seized documents as proof. “For
the CNC, all controls should take place
after the inspection,” Baena says. “They
give you a copy of everything they have
taken, and you have a few days to tell
them what is confidential or unrelated.”
Oriol Armengol, a partner at Pérez
Llorca in Madrid who is representing
Stanpa in its appeal against the CNC, is
hopeful that the Colgate ruling will have
an effect. “In the long run, judicial review of rulings has the effect of improving the CNC’s decisions and actions,”
says Armengol. “I don’t think you should
appeal just for the sake of appealing, but
yes, it should be done when a decision is
or could be contrary to the law.”
—Mike Elkin
