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Under Article 22 of Legislative Decree No. 58 of February 24 1998, securities and cash belonging to third parties and held for whatever purpose by investment firms or by financial intermediaries and banks, constitute an autonomous patrimony separate from that of the intermediary and from those of other clients. No attachment by or on behalf of creditors of the intermediary, as well as by or on behalf of creditors of a possible depository or sub-depository, can be levied on the patrimony.

Geoffrey Yeowart of Lovell White Durrant, London, updates the answers given in our December 1997 issue to the most frequently asked legal questions

Simmons & Simmons, London is representing First Active, due to be listed on the London and Dublin stock exchanges in early October. First National Building Society became First Active, a public limited company, in preparation for the share issue. The price range prospectus gives First Active a potential market capitalization of between IR£387 and IR£510 million ($552-$718 million). Simmons & Simmons is representing First Active in the UK. The team is led by partner William Charnley, head of corporate finance. He is assisted by partners Alan Karter (corporate) and Nick Cronkshaw (tax).

UK firm Clifford Chance is advising on the UK government's plans to raise finance for the Channel Tunnel rail link. Andrew Taylor, capital markets partner at Clifford Chance, is legal counsel to the UK investment bank Schroders, the financial advisers to the government. The government put forward proposals to the markets last week for a three tranche bond. In total the government plans to issue £2.65 billion (US$4.3 billion) of bonds with maturities of 12 years, 30 years, and between 30 and 40 years.

The Pünder group, a cooperation of European law firms, will be dissolved on December 31 1998. The remaining firms in the group had hoped to merge but they could not agree on the pace of integration. The group was hit earlier this year by the loss of Switzerland's Stoffel & Partner and Coppens Van Ommeslaghe & Faurès of Belgium, which also cited disagreements over integration between the firms. The remaining group comprises German firm Pünder Volhard Weber & Axster, Austrian firm Cerha Hempel & Spiegelfeld and French firm De Pardieu Brocas Maffei & Associés. At the end of the year these firms will continue to work together on a case-by-case basis but will no longer have a formal alliance. Peter Nägele, partner at Pünder Volhard, says: "All the firms agreed that alliances are no longer useful but our firm wanted to move ahead more quickly. We decided that it is better to dissolve the group and be free to pursue other options."

US law firm White & Case has been hired by the Republic of Panama to represent it during the privatization of the state-owned integrated electric utility. The Instituto de Recursos Hidraulicos y de Electrificacion (IRHE) is to be divided into eight companies in a two-phase process. On September 10, the first phase was completed with the sale of 51% stakes in the three distribution companies. Spanish company Union Fenosa acquired 51% of EDE Metro-Oeste SA, which serves Panama City, for US$212 million. As part of this deal, Union Fenosa also received 51% of EDE Chiriqui SA, which serves an area close to the Costa Rica border. US utility firm Constellation Power, a subsidiary of Baltimore Gas & Electric Co, bid approximately US$90 million for a 51% stake in EDE Noreste SA. The deals are expected to complete within 60 days.

Leading securitization specialist Robert Palache is to leave UK firm Clifford Chance to join investment bank Nomura International. Palache, the managing partner of Clifford Chance's finance practice, will give up legal practice completely in his new role as a Director and Joint Head of Securitization of Nomura's Principal Finance Group.

French/UK firm Salans Hertzfeld & Heilbronn will merge with New York's Christy & Viener on January 1 1999. Given that previous mergers have effectively been takeovers of small boutiques by much larger firms, it is the first transatlantic merger of equals. The combined firm will have 85 partners and 193 other qualified lawyers. The Paris office has a total of 103 lawyers, with 84 in New York and 31 lawyers in London. "The firm is a different paradigm to the largest firms," says Robert Starr, a partner in the London office of Salans Hertzfeld. "This merger is unique not only in being transatlantic but also in the character of the firm. We are not now a Paris-based firm nor a London-based firm, and we will not be a New York-based firm."

The recent US$200 million international placement of 10-year subordinated notes by Komercni Banka, the Czech Republic's largest commercial bank, was in many respects a watershed. The transaction constituted the first international offering by a bank in central and eastern Europe of subordinated debt that qualifies for inclusion in the bank's regulatory capital base. At a time when Komercni Banka, like most other Czech banks, was required to increase its provisions for classified loans, the issue of the notes enabled the bank to shore up its balance sheet and maintain an acceptable risk capital ratio without issuing new equity. From a legal perspective, the transaction presented a number of novel issues requiring innovative solutions. One of the most vexing challenges was structuring a subordination clause that satisfied both the international marketplace and Czech regulators, because neither existing banking regulations nor the Czech Bankruptcy Act recognized a concept of subordination consistent with international practice and standards. This article examines how the lawyers on the transaction managed to fit a square peg into a round hole to accomplish this feat.

Paris electronics company Framatome Connectors is buying its US competitor Berg Electronics, St Louis, for $1.85 billion. The deal will make Framatome the second–largest manufacturer of electronic connectors. Framatome will pay cash for Berg's shares and will also assume $400 million of debt. Framatome is being advised by New York law firm Davis Polk & Wardwell. The partners assisting on the transaction are John McCarthy Jr (corporate), Winthrop Conrad Jr (corporate), Paul Kingsley (corporate) and Patrick Bradford (antitrust).