SECOND MAGISTRATE RULING IN FAVOUR OF EMPLOYEES OF MERCURI INTERNATIONAL SPAIN

SECOND MAGISTRATE RULING IN FAVOUR OF EMPLOYEES OF MERCURI INTERNATIONAL SPAIN

As of March 9th, 2009 Mercuri International España still exists and a Magistrate from the Mercantile Court has issued a judicial ruling stating that:

Ø “Although the Company is in liquidation, it shows a clear capacity to generate new resources through the continuation of the activity which the bankrupt part in the lawful exercise of freedom of enterprise, guided by criteria of business convenience has decided not to continue.”

Ø “Moreover, it must be borne in mind that the fiscal memory of the year 2008 of Mercuri International Spain, S.A. shows a situation of economic certainty and viability of the company that only 9 months afterwards becomes an insolvent situation”.

Ø “This application is a reproduction of the one submitted on July 24^th, 2009, which appears to be inserted into the mechanics of liquidation of the Company by the mother company at the lowest possible cost”.

Ø “Because of the lack of reasons to agree on the extinction due to objective reasons, it is considered that it is appropriate to agree upon an unfair dismissal, this taking into account the existence of atypical factors involving a real and effective negotiation”.

Ø “Taking into account the allegations of the part on the existence of a business group involving the identification of a unique employer for labour purposes, the parties are referred to the labour tribunal where they can exercise action against the companies included in the group and demand joint accountability”.

Therefore, this is the second time that a Magistrate has agreed to reject the termination of the employment relations by objective reasons for the staff of Mercuri International Spain, requested by the Company.

Facts about Mercuri Spain

December 2008.

MCR (63y), the local financial manager is fired with a severance pay of 155k €. She also agrees with the company to stay six more months with a net salary of 3200 € per month.
June 2009.

AF, the local accountant, is fired with severance pay of 45 days per year
June 2009.

The company communicates to all the employees that Mercuri Group decided to close the Spanish unit. Some employees received the promise to join a new company to be managed by the current country manager.

July 2009.

The company also decided not to assume some the payment of some providers like the rent of the offices, other rentings, cleaning services and a last bill of 6000€ of some furniture bought a few months before. This last case destroys the relationship with a company that has been client for the last 15 years with more than 500k € of investment with us. Other loyal providers during many years suffer the situation, some of them are small business.
Employees are asked verbally not to continue efforts to sell Mercuri Services.


July 2009.

Suzanne Lithander (CEO) communicates the decision to close the Spanish unit in the company global bulletin.
Nicole Demeroux (COO) has a meeting with the Spanish employees and there was an agreement of a compensation of 36 days per year. However the approval of the board is necessary.
The company presents a request in the local authorities of a dismissal program for all the employees.


September 2009.

The dismissal program is denied. The reason of the denial is malicious motives and the assumption that the local company is a unit of a international group.
The company presents a request to declare bankruptcy.
The company does not pay some providers however some others bills are paid, like important amount of fees and royalties to the group, marketing services from some providers, and a increases of 20% of the salary in kind of the country manager.


October 2009.

Authorities appoint a receiver (an official administrator) for the company.


November 2009.

The official administrator communicates the employees that there is no money to pay salaries and any other legal compensation for the ending of the labour relationship with any of the employees. He asked the Group about it and he received this answer from Nicole Demeroux:


-“MERCURI INTERNATIONAL GROUP AB has not been part of and has not received any notification on the subject of the Spanish issue. The Group is the owner of the majority of social capital of Mercuri International Spain, but no compensation should be requested from her due to this fact. The Group has been recommended by its legal services not to assume the requested dismissal compensations from employees. As Mercuri International Spain has an autonomous management, it is not understandable that an indemnity higher to the “legal” one-“

“Legal” means the charity amount mentioned in our previous communication) be requested.



TO PUT IT OTHER WORDS: MERCURI INTERNATIONAL GROUP WASHES ITS HANDS OF THE MATTER



Future:

The administrator will close the contract with the employees. Each employee will recieve a small single, nominal compensation payment from a public fund. In the next months Mercuri Group can be declared legally responsible for the amount of 3 million Euros.

WE the 11 employees of Mercuri International in Spain ARE GRATEFUL FOR the SUM TOTAL OF 160 years that we HAVE DEDICATED TO THIS COMPANY founded by two WISE men. However, we deeply regret that those solid values upon which the company was founded are not shared by the current management.

MERCURI INTERNATIONAL SPAIN IN PROCESS OF LIQUIDATION

FURTHER NEWS FROM PERSONNEL OF SPANISH SUBSIDIARY

Yesterday was actually, and due to new legal regulations (recently approved in orderto speed up the handling of the numerous pending files because of present economicalsituation) our “last” opportunity to be able to negotiate with MercuriInternational. This is the answer of the Group to our formal request of negotiation, communicatedthrough Nicole Dereumaux. It says that: MERCURI INTERNATIONAL GROUP AB has not been part of and has not received anynotification on the subject of the Spanish issue.

The Group is the owner of the majority of social capital of Mercuri InternationalSpain, but no compensation should be requested from her due to this fact. The Group has been recommended by its legal services not to assume the requesteddismissal compensations from employees.
As Mercuri International Spain has an autonomous management, it is notunderstandable that an indemnity higher to the “legal” one (“Legal” means the charity amount mentioned in our previous communication) be requested.

PUT IT OTHER WORDS: MERCURI INTERNATIONAL GROUP WASHES ITS HANDS.


Yesterday was actually, and due to new legal regulations (recently approved in orderto speed up the handling of the numerous pending files because of present economicalsituation) our “last” opportunity to be able to negotiate with MercuriInternational. This is the answer of the Group to our formal request of negotiation, communicatedthrough Nicole Dereumaux. It says that: MERCURI INTERNATIONAL GROUP AB has not been part of and has not received anynotification on the subject of the Spanish issue. The Group is the owner of the majority of social capital of Mercuri InternationalSpain, but no compensation should be requested from her due to this fact. The Group has been recommended by its legal services not to assume the requesteddismissal compensations from employees. As Mercuri International Spain has an autonomous management, it is notunderstandable that an indemnity higher to the “legal” one (“Legal” means the charity amount mentioned in our previous communication) be requested.
PUT IT on OTHER WORDS: MERCURI INTERNATIONAL GROUP WASHES ITS HANDS.

November MI-SPAIN Situation

FACTS CONCERNING PERSONNEL OF MERCURI INTERNATIONAL SPAIN IN PROCESS OF LIQUIDATION

(FACTS CONCERNING CUSTOMERS WILL FOLLOW…)


Facts that you may know:

All of you must be aware of the fact that MIGAB has taken the decision to close the unit of Mercuri International in Spain without giving the employees the legal compensation they are entitled to (an amount equivalent to 45 days per year worked) and they deserve after having shown their commitment, loyalty and hard-working for over 20 years (most of them) towards the Company.

As a matter of fact, Mercuri International offers the Spanish Employees 0 € and claims that the compensations should be paid by Government Spanish Insurance Funds which means that they would receive a symbolic charity amount.

The decision taken by the Labour Ministry against the application filed by the Lawyer who represents the Group in Spain on July 24th, requesting the termination of contracts for the Spanish employees, states among other clauses, the following one that might be of interest to you:


“The company making the request belongs to MERCURI INTERNATIONAL GROUP AB, with which Headquarters - with registered domicile in Sweden – it has an economical relationship that should be considered in order to study the actual causes for its requested dissolution. It exists, according to Case Law declarations, a consolidated responsibility between Group companies in order to fullfill obligations derived from labour contracts.

Case Law, as well, has established the need in such cases to study economical documents concerning Group Companies”


This resolution was issued on. September 29th, 2009.





Parallelly, as the Company’ Lawyer had the feeling that this application would be turned down by Social Authorities, an additional legal procedure was initiated at the beginning of September in order to obtain the termination of contracts for the employees of Mercuri International Spain. This time, the decision will have to be issued by a Magistrate of a different Court that rules under commercial laws.

On November 24th, the Spanish employees of Mercuri International were informed that a negotiation process lasting a minimum of 15 days was open in order to try to reach an agreement between the Company and the workers. If no agreement is reached this time, the Magistrate will take the decision regarding the termination of contracts and the compensation to be paid to Spanish employees and by whom.

Should this decision be in favour of the Company, the employees of Mercuri International will appeal against this ruling and the file will go back to the Labour Ministry that already took a decision in favour of the employees, according to the above stated paragraph.

In addition to the above legal risks, there are important financial risks that the Group should not disregard. These latter are related to Clients and specially to International Clients business.

You surely all know that some of us were offered the possibility to join a new Company that would be set up as soon as the present one would be closed in order to continue to manage the International Projects with the same level of quality as up to now in Spain. In order to settle this agreement, Nicole Dereumaux in a meeting held with Spanish employees in Madrid on July 10th offered those that were not getting a job in the new Company a compensation of 36 days per year of employment in Mercuri, but a few days later Nicole Dereumaux went back on her word and, consequently, no agreement was reached with future unemployed people. On the other hand, conditions offered to those supposed to join the new Company were not acceptable either.

Therefore, as a satisfactory agreement was not reached, other formulas are being studied to carry out International Projects in Spain. It should be born into account that all of them are in risk, if a satisfactory solution is not found for all the Spanish employees, as well as the image of Mercuri International in Spain and worldwide.






Facts that you may not know and that will be of interest to a Magistrate:


1) Approximately at the same date, but last year, two Spanish Consultants were fired, but they were paid, as severance, 45 days per year worked.

2) In the month of December of last year 2 more Spanish employees belonging to the administrative staff were dismissed and they reached an agreement with the Company concerning their severance payment of 36 days per year worked.

3) Among the above mentioned administrative employees was the Financial Manager who was paid an indemnity of 145.000 € last year and who was supposed to leave the Company in the month of December 2008. Nevertheless, she went on working in Mercuri International offices until the end of June 2009 (Just after the Board Meeting was held and the decision to close the unit was formally approved). She was probably hired by an intermediary, although paid by Mercuri International. Moreover, this person did not leave completely the Company at the end of June either. She has been collaborating, this time from outside the office, with the Lawyer of the Company in order to help fire her former colleagues with no compensation at all. Guess who has paid for her work.

4) At the end of June, the accountant was also fired with a compensation of 45 days per year worked. Straight afterwards she was hired by the Lawyer of the Company, but she is being paid by Mercuri International Group and she is working for the Lawyer of the Company in her former desk in the offices of Mercuri International Spain.

5) At the beginning of September instructions were given so that no more income would be generated through International Projects for Spain.






6) Steps are being taken in order to copy the data included in the servers of Mercuri International Spain through Mercuri International UK. This procedure is contrary to the Spanish Law of Data Protection.



Where are the Core Values preached by Mercuri International in this issue?

We are requesting by this writing that a win-win negotiation, according to Mercuri International’s principles, be initiated with Spanish employees in order to find a satisfactory agreement for all parts involved and avoid financial prejudices on both sides.



Madrid, November 30th, 2009