We advised a private investor on the separation of a real estate portfolio worth approximately €7.5 million, held jointly with a former business partner through two heavily indebted companies. Working with tax advisers and auditors, we designed a cashless, multi-step restructuring with cross-border elements in Germany and Cyprus.
Our Role
We designed a step-by-step restructuring, governed by a transaction roadmap agreed by both sides. It combined a corporate demerger, cross-shareholding transfers and a share exchange under German law, with all consideration set off against outstanding intercompany loans.
The property destined for the other party was ring-fenced in a newly incorporated company, while full ownership of the remaining real estate was consolidated under our client’s control. To safeguard our Client from risk, our firm in collaboration with tax advisors and colleagues from Germany strategically arranged the transaction to be cashless, and we sequenced each transfer and set-off carefully, avoided any payment of funds to the counterparty, and secured indemnity protections for our client.
Key Legal Issues
Separating jointly held real estate through corporate tools such as demergers and share exchanges can avoid the cost of direct property transfers and refinancing. The structure must, however, work under the corporate, tax and property rules of each jurisdiction involved and protect each party at every step.
Why It Matters for Investors
Joint ventures and partnerships holding real estate do not always end amicably. A well-designed restructuring allows each party to leave with clear ownership of its assets, without new financing and with legal certainty.
For further information on real estate restructurings and corporate reorganisations in Greece, please contact our team.
