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Patronatsgeber

English translation: Well.... would "parent company" work?

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16:19 Mar 5, 2002
German to English translations [PRO]
Bus/Financial - Finance (general) / Patronatserklärung
German term or phrase: Patronatsgeber
Der Patronatsgeber erklärt, dass es seine gegenwärtige und künftige Geschäftspolitik sei, YYYYYY finanziell so auszustatten, dass diese Ihre . . . Verpflichtungen erfüllen kann.

Hinweis: Die Patronatserklärung ist zwischen Firma XXXXX und einer Bank. Firma YYYYY erhält einen Kredit von der Bank, Firma XXXXX ist der Patronatsgeber.

Wie würde dieser Begriff übersetzt?

Thanks for your help!!!
Pegmoe
English translation:Well.... would "parent company" work?
Explanation:
A Patronatserklärung is a letter of comfort. See description below:

"January 1999
LETTERS OF [COLD] COMFORT
By C. Barry Tarshis

The enforceability of letters of comfort was recently considered in the case of Toronto-Dominion Bank v. Leigh Instruments Ltd. (Trustee of), [1998] O.J. No. 2367 (Ont. Ct. Gen. Div.). Letters of comfort are commonly provided to a lender by a parent company in support of the borrowings of a subsidiary. In this case, Mr. Justice Winkler found that the Letter of Comfort was not legally enforceable. While the case is currently under appeal, it provides a rare and useful look into the law relating to letters of comfort, concluding that:

[l]etters of comfort are just that, comfort. They are not guarantees or formal security nor are they enforceable as such. They are gentlemen’s agreements and moral obligations.

The case reminds the lending community that a letter of comfort is not a quasi-guarantee. It may in some quarters be considered an item of "security". However, it should be regarded merely as a facet of the relationship between the lender and the corporate group in question, without collateral value. This case is an illustration of the willingness of an issuer of such a letter to disregard it.

There is no standard form for letters of comfort. They may contain one or more of the following elements:


A statement of awareness of the credit facility;

A statement of the parent’s ownership of the borrower;

An undertaking not to change the ownership or an undertaking to notify the lender of a proposed change of ownership;

A statement of policy regarding the obligations of members of the corporate group (as was the basis of the Leigh case).
They are usually intended to fall short of a guarantee. "


"Question: How comforting is a letter of comfort?

Answer: It depends.

When making a loan to one of a group of companies, the prudent course is to take a guarantee from the parent company and, if possible, from all the companies in the group. It is only in this way that the lender can be certain that assets of the group will be available to meet the obligations of the legal borrower.

Unfortunately, what is prudent for the lender is not always acceptable to the parent company. A variety of commercial reasons may make a guarantee unattractive. The parent company may not wish to incur legal liability or it may wish to avoid having a contingent liability showing on its balance sheets.

The compromise position is the letter of comfort. Ellinger has classified letters of comfort into three basic types.[1] At the one extreme, the parent company may give an undertaking to maintain its shareholding or other financial commitment in the subsidiary. A second type of letter calls for the parent to use its influence to see that the subsidiary meets its obligation under the primary contract. The weakest form of the letter of comfort is a confirmation that the parent is aware of the contract with the subsidiary, but without any express indication that the parent will assume any responsibility for the primary obligation. Although Ellinger classifies "letters" it is clear that a single letter may contain paragraphs of the different types.

A letter of comfort may have legal effect even though it is not a guarantee. The liability of the guarantor for the primary debt arises by the default of the primary debtor. But there may be other contractual promises, the breach of which would have the effect of allowing the lender to recover damages equivalent to the debt. The question in each case is to determine the legal effect of the terms of the letter."

So, if it is possible in your case, I would say "parent company"
Selected response from:

Alison Schwitzgebel
France
Local time: 11:50
Grading comment
Thank you so much for the detailed information! I double-checked with the client, and we are in fact, dealing with the parent company. Thanks for the hint -- that makes things so much easier!
4 KudoZ points were awarded for this answer

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Summary of answers provided
5 +1issuer of a letter of comfort
Regina Landeck
4Mäzen / Mäzenatentum.xxxbrute
4securities provideringot
4Well.... would "parent company" work?
Alison Schwitzgebel


  

Answers


8 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5
Well.... would "parent company" work?


Explanation:
A Patronatserklärung is a letter of comfort. See description below:

"January 1999
LETTERS OF [COLD] COMFORT
By C. Barry Tarshis

The enforceability of letters of comfort was recently considered in the case of Toronto-Dominion Bank v. Leigh Instruments Ltd. (Trustee of), [1998] O.J. No. 2367 (Ont. Ct. Gen. Div.). Letters of comfort are commonly provided to a lender by a parent company in support of the borrowings of a subsidiary. In this case, Mr. Justice Winkler found that the Letter of Comfort was not legally enforceable. While the case is currently under appeal, it provides a rare and useful look into the law relating to letters of comfort, concluding that:

[l]etters of comfort are just that, comfort. They are not guarantees or formal security nor are they enforceable as such. They are gentlemen’s agreements and moral obligations.

The case reminds the lending community that a letter of comfort is not a quasi-guarantee. It may in some quarters be considered an item of "security". However, it should be regarded merely as a facet of the relationship between the lender and the corporate group in question, without collateral value. This case is an illustration of the willingness of an issuer of such a letter to disregard it.

There is no standard form for letters of comfort. They may contain one or more of the following elements:


A statement of awareness of the credit facility;

A statement of the parent’s ownership of the borrower;

An undertaking not to change the ownership or an undertaking to notify the lender of a proposed change of ownership;

A statement of policy regarding the obligations of members of the corporate group (as was the basis of the Leigh case).
They are usually intended to fall short of a guarantee. "


"Question: How comforting is a letter of comfort?

Answer: It depends.

When making a loan to one of a group of companies, the prudent course is to take a guarantee from the parent company and, if possible, from all the companies in the group. It is only in this way that the lender can be certain that assets of the group will be available to meet the obligations of the legal borrower.

Unfortunately, what is prudent for the lender is not always acceptable to the parent company. A variety of commercial reasons may make a guarantee unattractive. The parent company may not wish to incur legal liability or it may wish to avoid having a contingent liability showing on its balance sheets.

The compromise position is the letter of comfort. Ellinger has classified letters of comfort into three basic types.[1] At the one extreme, the parent company may give an undertaking to maintain its shareholding or other financial commitment in the subsidiary. A second type of letter calls for the parent to use its influence to see that the subsidiary meets its obligation under the primary contract. The weakest form of the letter of comfort is a confirmation that the parent is aware of the contract with the subsidiary, but without any express indication that the parent will assume any responsibility for the primary obligation. Although Ellinger classifies "letters" it is clear that a single letter may contain paragraphs of the different types.

A letter of comfort may have legal effect even though it is not a guarantee. The liability of the guarantor for the primary debt arises by the default of the primary debtor. But there may be other contractual promises, the breach of which would have the effect of allowing the lender to recover damages equivalent to the debt. The question in each case is to determine the legal effect of the terms of the letter."

So, if it is possible in your case, I would say "parent company"


    Reference: http://www.smithlyons.ca/practiceareas/Banking/Publications/...
    Reference: http://www.law.usyd.edu.au/~alant/comfort.html
Alison Schwitzgebel
France
Local time: 11:50
Specializes in field
Native speaker of: Native in EnglishEnglish, Native in GermanGerman
PRO pts in category: 237
Grading comment
Thank you so much for the detailed information! I double-checked with the client, and we are in fact, dealing with the parent company. Thanks for the hint -- that makes things so much easier!
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8 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5
securities provider


Explanation:
?

ingot
PRO pts in category: 4
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14 mins   confidence: Answerer confidence 5/5 peer agreement (net): +1
issuer of a letter of comfort


Explanation:
According to "Wirtschaftwörterbuch" (Schäfer), "Patronatserklärung" translates to: letter of comfort, letter of awareness, letter of intent, letter of responsibility, Patronatsgeber oder Patron is the issuer of such instrument.

ERklärung: im Anleihe- od. Kreditgeschäft: Erklärung e-r Konzernmutter, durch die e-m Kreditgeber ein Verhalten e-r Tochtergesellschaft in Aussicht gestellt wird, durch das sich die Befriedigungsaussichten d. Kreditgebers verbessern; kein unmittelbarer Zahlungsanspruch gegen die Mutter; weder Bürgschaft noch Garantievertrag; Mutter muss der Tochter jedoch die notwendigen Mittel zuführen; andernfalls schadenersatzpflichtig; die juristische Bandbreite kann von weichen kaufmännischen Wohlwollenerklärungen bis zu harten Verpflichtungen mit garantieähnlichem Inhalt reichen: cf, Staudinger-Horn: BGB, 12 Aufl. 1982, Vorberm. zu Parag. 765-778

Regina Landeck
Local time: 03:50
Works in field
Native speaker of: Native in GermanGerman
PRO pts in category: 4

Peer comments on this answer (and responses from the answerer)
agree  xxxRNolder
38 mins
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1 hr   confidence: Answerer confidence 4/5Answerer confidence 4/5
Mäzen / Mäzenatentum.


Explanation:
Implicit.

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Note added at 2002-03-05 17:45:55 (GMT)
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English: Maecenas / Patron. (brute)

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Note added at 2002-03-05 17:48:17 (GMT)
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Also: Patronage. (\'tis brutal)

xxxbrute

Peer comments on this answer (and responses from the answerer)
neutral  Alison Schwitzgebel: emmmm...... It's a German into English question isn't it?
9 mins
  -> Thanx, Alison! Got to do something about these trying hallucinations!
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Changes made by editors
Apr 26, 2016 - Changes made by Steffen Walter:
Field (write-in) » Patronatserklärung


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