**Case T-11/07**

**Frucona Košice a.s.**

**v**

**European Commission**

(State aid – Partial remission of a tax debt in the context of an arrangement – Decision declaring the aid to be incompatible with the common market and ordering its recovery – Test of a private creditor in a market economy)

Summary of the Judgment

1.      *State aid – Commission decision – Judicial review – Limits*

*(Arts 88 EC and 230 EC)*

2.      *Procedure – Application initiating proceedings – Formal requirements*

*(Statute of the Court of Justice, Arts 21 and 53, first para.; Rules of Procedure of the General Court, Art. 44(1)(c))*

3.      *State aid – Provisions of the Treaty – Scope ratione temporis – Accession of a new Member State to the European Union*

*(Arts 87 EC and 88 EC; Act of Accession 2003, Annex IV, Section 3)*

4.      *State aid – Examination by the Commission – Private creditor test – Complex economic assessment – Judicial review – Limits*

*(Arts 87(1) EC and 88(2) EC)*

5.      *State aid – Definition – Remission of debts granted by public bodies to a firm in difficulty*

*(Art. 87(1) EC)*

6.      *State aid – Examination by the Commission – Administrative procedure – Obligation on the Commission to put the parties concerned
on notice to submit their observations – Status of the aid recipient*

*(Art. 88(2) EC)*

7.      *State aid – Prohibition – Exceptions – Discretion of the Commission – Possibility of adopting guidelines*

*(Art. 87(3)(c) EC; Commission Notice 1999/C 288/02)*

1.      In an action for annulment the legality of the measure concerned must be assessed in the light of the matters of fact and
of law existing at the time when that measure was adopted. The legality of a decision concerning State aid is to be assessed
in the light of the information available to the Commission when the decision was adopted. An applicant cannot therefore rely,
before the Court, on matters of fact which were not put forward in the course of the pre‐litigation procedure laid down in
Article 88 EC. Similarly, it cannot be complained that the Commission failed to take into account matters of fact or law which
could have been submitted to it during the administrative procedure but which were not, as the Commission is under no obligation
to consider, of its own motion and on the basis of prediction, what information might have been submitted to it.

(see paras 48-51)

2.      Under the first paragraph of Article 21 of the Statute of the Court of Justice, applicable to the procedure before the General
Court by virtue of the first paragraph of Article 53 thereof, and Article 44(1)(c) of the Rules of Procedure of the General
Court, each application is required to state the subject-matter of the dispute and a summary of the pleas in law on which
the application is based. It is necessary, for an action to be admissible, that the basic matters of law and fact relied on
be indicated, at least in summary form, coherently and intelligibly in the application itself.

(see para. 59)

3.      In order to determine whether the Commission has the competence to review an aid measure in relation to which some of the
relevant events took place before the accession of the Member State concerned to the European Union, the relevant criterion
to be applied is the legally binding act by which the competent national authority undertakes to grant aid.

As regards the partial remission by a Member State authority of the tax debt of an undertaking in difficulty in the context
of an arrangement, a distinction must be drawn between a decision to refrain from initiating a bankruptcy procedure or a tax
execution procedure and a decision to approve a proposed arrangement. Only the latter decision implies that the tax authority
has waived its claims over the undertaking. While a decision of a creditor not to initiate a bankruptcy procedure or a tax
execution procedure merely delays a possible forced recovery of the claim, a decision of that creditor to approve a proposed
arrangement means, subject to confirmation of that arrangement by the competent court, that that creditor definitively waives
all or part of that claim. Consequently, in order to ascertain whether the Commission has the competence to examine the aid
measure in question, it is necessary only to determine at what point in time the tax authority adopted its decision to approve
the proposed arrangement.

(see paras 68-72)

4.      In so far as the Commission’s application of the test of a private creditor in a market economy involves complex economic
appraisals, like the application of the test of a private investor in a market economy, when reviewing it the Court must confine
itself to verifying whether the Commission complied with the relevant rules governing procedure and the statement of reasons,
whether the facts have been accurately stated and whether there has been any manifest error of assessment of those facts or
a misuse of powers. However, whilst the Commission has a margin of discretion with regard to economic matters, that does not
mean that the Courts of the European Union must refrain from reviewing the Commission’s interpretation of information of an
economic nature. Not only must the Courts of the European Union establish whether the evidence relied on is factually accurate,
reliable and consistent but also whether that evidence contains all the information which must be taken into account in order
to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it. However, when conducting
such a review, the Courts of the European Union must not substitute their own economic assessment for that of the Commission.

(see paras 108-110)

5.      A public body which has granted a debt remission should be compared to a private creditor who is seeking to obtain payment
of sums owed to it by a debtor in financial difficulties. The status of creditor should be distinguished from that of a private
investor in a market economy pursuing a structural policy – whether general or sectoral – guided by the longer-term prospects
of profitability of the capital invested.

When a firm faced with a substantial deterioration of its financial situation proposes an agreement or series of agreements
for debt arrangement to its creditors with a view to remedying the situation and avoiding liquidation, each creditor must
make a decision having regard to the amount offered to it under the proposed agreement, on the one hand, and the amount it
expects to be able to recover following possible liquidation of the firm, on the other. Its choice is influenced by a number
of factors, such as the creditor’s status as a secured, preferential or ordinary creditor, the nature and extent of any security
it may hold, its assessment of the chances of the firm being restored to viability, as well as the amount it would receive
in the event of liquidation.

(see paras 114-115)

6.      Under the procedure for reviewing State aid, the role of interested parties other than the Member State concerned is confined
to providing the Commission with all the information needed to guide it with regard to its future action. Accordingly, they
cannot themselves lay claim to an exchange of arguments with the Commission such as that initiated in regard to that Member
State.

Moreover, of the interested parties, the recipient of the aid does not play a special role pursuant to any provision governing
the procedure for the review of State aid. The procedure for the review of State aid is not a procedure initiated ‘against’
the recipient or recipients of aid by virtue of which it or they could rely on rights as extensive as the rights of the defence
as such.

Furthermore, the legality of the contested decision is to be assessed in the light of the information available to the Commission
when the decision was adopted and it is for the Member State concerned and, where appropriate, the recipient of the aid to
adduce evidence to show that the aid is compatible with the common market and, if necessary, to plead specific circumstances
relating to recovery of the aid already paid should the Commission require its repayment.

(see paras 178-180)

7.      Pursuant to Article 87(3)(c) EC, ‘aid to facilitate the development of certain economic activities or of certain economic
areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest’ may be considered
to be compatible with the common market. Moreover, in accordance with settled case-law, Article 87(3) EC confers on the Commission
a wide discretion to allow aid by way of derogation from the general prohibition laid down in Article 87(1) EC, since the
determination in such a case of the question whether State aid is or is not compatible with the common market raises problems
which presuppose the examination and appraisal of complex economic facts and conditions which may be liable to change rapidly.
Since it is not for the Courts of the European Union to substitute their own assessment of the facts, particularly the economic
circumstances, for that of the author of the decision, the Court must, in such a context, confine its review to determining
whether the Commission complied with the rules governing procedure and the provision of the statement of reasons, whether
the facts are accurately stated and whether there has been any manifest error of assessment or misuse of powers.

The Commission may adopt a policy as to how it will exercise its discretion in the form of measures such as guidelines, in
so far as those measures contain rules indicating the approach which the institution is to take and do not depart from the
rules of the Treaty. As regards State aid for rescuing and restructuring firms in difficulty, it is clear from paragraph 31
of the 1999 Guidelines that, in order to be declared compatible with Article 87(3)(c) EC, individual aid to undertakings in
difficulty must be bound to a restructuring programme which has been endorsed by the Commission. Moreover, under paragraphs
32 to 40 of the 1999 Guidelines, the restructuring plan, the duration of which must be as short as possible, must inter alia
restore the long‐term viability of the firm within a reasonable timescale and on the basis of realistic assumptions as to
future operating conditions, whilst limiting the amount and intensity of the aid to the strict minimum. In addition, in accordance
with paragraphs 43 and 45 of the 1999 Guidelines, the company concerned must fully implement the restructuring plan as accepted
by the Commission. That implementation and the satisfactory progress of the plan must be monitored by the Commission, to which
detailed annual reports must be submitted. In the absence of a credible restructuring plan, the Commission is justified in
refusing to authorise the aid in question.

(see paras 225-229, 231)

JUDGMENT OF THE GENERAL COURT (Second Chamber)

7 December 2010 (*)

(State aid – Partial remission of a tax debt in the context of an arrangement – Decision declaring the aid to be incompatible with the common market and ordering its recovery – Test of a private creditor in a market economy)

In Case T‐11/07,

**Frucona Košice a.s.,** established in Košice (Slovakia), represented by B. Hartnett, Barrister, and O.H. Geiss and A. Barger, lawyers,

applicant,

v

**European Commission,** represented by B. Martenczuk and K. Walkerová, acting as Agents,

defendant,

supported by

**St. Nicolaus-trade a.s.,** established in Bratislava (Slovakia), represented by N. Smaho, lawyer,

intervener,

ACTION for annulment of Commission Decision 2007/254/EC of 7 June 2006 on State aid C 25/05 (ex NN 21/2005) implemented by
the Slovak Republic for Frucona Košice a.s. (OJ 2007 L 112, p. 14),

THE GENERAL COURT (Second Chamber),

composed of I. Pelikánová, President, K. Jürimäe (Rapporteur) and S. Soldevila Fragoso, Judges,

Registrar: C. Kantza, Administrator,

having regard to the written procedure and further to the hearing on 14 October 2009,

gives the following

**Judgment**

**Legal context**

1.     *Community legislation*

1        In 1999 the Commission of the European Communities adopted Community guidelines on State aid for rescuing and restructuring
firms in difficulty (OJ 1999 C 288, p. 2; ‘the 1999 Guidelines’).

2        According to paragraph 31 of the 1999 Guidelines:

‘The grant of the aid is conditional on implementation of the restructuring plan which must be endorsed by the Commission
in the case of all individual aid measures.’

3        With respect to small and medium‐sized enterprises (SMEs), paragraph 55, which appears under the heading ‘Aid for restructuring
[SMEs]’ provides as follows:

‘Aid to firms in the small to medium-sized category ... tends to affect trading conditions less than that granted to large firms.
This also applies to aid to help restructuring, so that the conditions laid down in [paragraphs] 29 to 47 are applied less
strictly: the grant of restructuring aid to SMEs will not usually be linked to compensatory measures (see [paragraphs] 35
to 39), unless this is otherwise stipulated in rules on State aid in a particular sector; and the requirements regarding the
content of reports will be less stringent (see [paragraphs] 45, 46 and 47). On the other hand, the “one time, last time” principle
([see paragraphs] 48 to 51) applies in full to SMEs.’

2.     *National legislation*

4        Zákon 328/1991 Zb. o konkurze a vyrovnaní (Act No 328/1991 on bankruptcy and creditor arrangement (‘the Law on bankruptcy
and arrangement with creditors’)) lays down the applicable rules in Slovakia in relation to bankruptcy and arrangement procedures.

**Background to the dispute**

1.     *The applicant*

5        The applicant, Frucona Košice a.s., is a company incorporated under Slovak law with its seat in Košice (Slovakia), a city
which on 7 June 2006 was in an area eligible for regional aid under Article 87(3)(a) EC. In 1995, the year in which it was
incorporated, the applicant acquired the assets and liabilities of a former State enterprise.

6        The applicant was originally active in the sector of the production of alcohol and spirits and also in the manufacturing sector
of agricultural products such as canned fruit, vegetables and juices, and of carbonated and non-carbonated beverages. On 6
March 2004, its licence for the production and processing of alcohol and spirits was revoked on the ground that it had not
paid the excise duty for which it was liable. Since then, it has no longer produced spirits but has distributed them, in accordance
with an agreement concluded on 24 August 2004 with Old Herold, s.r.o. Under that agreement, the applicant leased to Old Herold
its distilleries in Košice and Obišovce (Slovakia), distilleries in which Old Herold produced spirits under licence, which
the applicant then purchased in order to sell to its customers under the Frucona brand.

2.     *National administrative and judicial procedures*

7        Following the entry into force, on 1 January 2004, of zákon č. 609/2003 Z.z., ktorým sa mení a dopĺňa zákon Slovenskej národnej
rady č. 511/1992 Zb. o správe daní a poplatkov a o zmenách v sústave územných finančných orgánov v znení neskorších predpisov
a ktorým sa menia a dopľňajú niektoré ďalšie zákony (Law No 609/2003 amending and supplementing Act No 511/1992 of the National
Assembly of the Slovak Republic on the administration of taxes and fees and changes to the system of local fiscal authorities,
and amending and supplementing certain other laws), which provides inter alia that a taxable person is allowed to apply for
tax payment deferral only once per year, the applicant was faced with financial difficulties which prevented it from paying
the excise duty due in respect of January 2004 and payable on 25 February of that year. The applicant had previously benefited
from several deferrals of payment of its tax debt, which had been granted to it after financial security had been provided
to the Slovak tax authorities. The applicant was therefore in a position of indebtedness for the purposes of the Law on bankruptcy
and arrangement with creditors.

8        Anticipating the financial difficulties resulting from the proposed amendment to and ultimately the amendment made to the
legislation on tax deferral, the applicant, represented in particular by its general director, had met representatives of
the Slovak Tax Directorate on 16 December 2003 and 23 January 2004. On 30 January 2004, the applicant’s general director also
met the Slovak Minister for Finance. At those meetings the applicant set out, in particular, its proposal to settle its tax
liabilities in the context of a possible arrangement procedure.

9        Meanwhile, the applicant had also contacted its local tax office, namely the Košice IV Office (‘the Tax Office’). By letter
of 8 January 2004, the applicant informed the Tax Office that, as regards the excise duty, it would not be able to pay in
February 2004 the outstanding sums payable and proposed either paying those sums in instalments spread out over a five‐year
period or accepting a proposed arrangement under which payment would be limited to 35% of the sums due. By letter of 3 February
2004, the Tax Office rejected the first part of the alternative proposed by the applicant and, as regards the second part
of that alternative, namely the proposed arrangement, replied as follows: ‘... in principle, the tax administrator does not
object to an arrangement. However, it cannot agree to your proposal for an arrangement that represents the payment of 35%
of the sum due. We understand that before a petition for an arrangement is filed, the terms and conditions of the arrangement
must be discussed.’

10      On 8 March 2004, the applicant filed an application for the initiation of an arrangement procedure before the Krajský súd
v Košiciach (Regional Court, Košice, Slovakia), in which it referred to its over-indebtedness and described, in accordance
with the provisions of the Law on bankruptcy and arrangement with creditors, the various measures to ensure its financial
recovery after the arrangement procedure. The total amount of the tax debt taken into account in its proposed arrangement
was approximately **[confidential]** Slovak koruna (SKK) out of a total amount of debt of approximately SKK 644.6 million. Under its proposed arrangement the
applicant proposed to all its unsecured creditors and to certain preferential creditors that it would pay each of them an
amount equivalent to 35% of the total of the sums that it owed each one.

11      By decision of 29 April 2004, the Krajský súd v Košiciach held that the conditions laid down in Article 46 et seq. of the
Law on bankruptcy and arrangement with creditors were met and therefore authorised the initiation of the arrangement procedure
pursuant to Article 50(3) of that law. In the context of that procedure, it inter alia requested that the applicant’s creditors
adduce proof of their respective claims. It also appointed an arrangement administrator and ordered that the applicant and
its creditors attend an arrangement hearing set for 9 July 2004 (‘the arrangement hearing of 9 July 2004’). Lastly, the court
reproduced the arrangement conditions which had been set out by the applicant in its proposed arrangement of 8 March 2004.

12      In order to enable the Tax Office to assess the respective advantages of arrangement, bankruptcy and tax execution under Slovak
law, the applicant submitted to it a number of audit reports prior to the confirmation of the arrangement by the Krajský súd
v Košiciach. On 26 April 2004, it sent a first audit report drawn up by its internal auditor, Ms K. (‘the K report’), in which
the proceeds from the sale of the applicant’s assets under a bankruptcy procedure had been assessed at **[confidential]**. On 7 July 2004, the applicant sent a second audit report drawn up by an independent audit company, namely the company E
(‘the E report’), in which it was stated, **[confidential]**. A draft version of the E report had been sent to the Tax Office in late June 2004.

13      On 21 June 2004, the Slovak tax authorities carried out an on-the-spot inspection in the applicant’s premises. During that
inspection, it found that, as at 17 June 2004, the applicant had liquid assets in the amount of SKK **[confidential]**.

14      By letter of 6 July 2004, the Director-General of the Slovak Tax Directorate asked the Tax Office not to accept the applicant’s
proposed arrangement at the arrangement hearing of 9 July 2004 on the ground that it was unfavourable for the Slovak Republic,
having regard to a letter from the Slovak Minister for Finance of 15 January 2004 attached as an Annex, in which the Minister
asked the Director‐General to ensure that tax administrators did not agree to a reduction in a taxpayer’s tax debt.

15      During the arrangement hearing of 9 July 2004 the applicant’s creditors, including the Slovak tax authorities, accepted the
applicant’s proposed arrangement.

16      By decision of 14 July 2004, the Krajský súd v Košiciach confirmed the arrangement. It first of all identified the applicant’s
creditors who had adduced proof of their claims in the context of the arrangement procedure. It stated in particular that
the Slovak tax authorities had a receivable claim of approximately SKK **[confidential]** in respect of which the arrangement provided that 35% would be repaid, that is an amount to be paid of approximately SKK
224.3 million. Next, it found that, during the arrangement hearing of 9 July 2004, the applicant’s creditors, including the
Tax Office, as a preferential creditor, and consequently by a separate vote, all voted, in accordance with Article 58(4) and
(5) and Article 58b(1)(a) and (2) of the Law on bankruptcy and arrangement with creditors, in favour of the applicant’s proposed
arrangement. That court also recalled the conditions which had to be satisfied in order that, under Article 60(1) of that
law, the arrangement in question could be subsequently confirmed and then held that the conditions were fulfilled in the present
case.

17      On 14 July 2004, the Slovak Tax Directorate suspended and replaced the director of the Tax Office.

18      By letter of 20 October 2004, the Tax Office stated to the applicant that the arrangement conditions that it had approved
at the arrangement hearing of 9 July 2004, according to which a part of the tax debt did not have to be repaid, constituted
indirect State aid, which is subject to the approval of the European Commission. It also requested that the applicant submit
by 19 November 2004 an investment plan relating to the sums which did not have to be repaid, pursuant to the decision of the
Krajský súd v Košiciach of 29 April 2004.

19      By judgment of 25 October 2004, the Najvyšší súd Slovenskej republiky (Supreme Court of the Slovak Republic) dismissed the
appeal lodged by the Tax Office in August 2004 against the decision of the Krajský súd v Košiciach of 14 July 2004 as inadmissible
and declared that decision to be valid and enforceable as of 23 July 2004.

20      By letter of 9 November 2004, the applicant replied to the Tax Office’s letter of 20 October 2004, stating that it had filed
an ‘application [for an arrangement]’ and not an ‘application for ... State aid’. In that letter it stated that it did not agree
that a consent given by a Tax Office administrator should be classified as State aid. The applicant also stated that it regarded
the request for the investment plan as ‘unfounded’.

21      On 14 December 2004, the director of the Tax Office, who was suspended on 14 July 2004, was indicted on fraud and embezzlement
charges.

22      On 17 December 2004, the applicant, in accordance with the arrangement, in particular paid to the Tax Office an amount of
SKK 224.3 million, which corresponds to 35% of its total debt. By decision of 30 December 2004, the Krajský súd v Košiciach
found that the arrangement was valid as of 23 July 2004 and declared the arrangement procedure to be terminated.

23      In order to confirm the advantages of an arrangement procedure over a bankruptcy procedure, the applicant also obtained a
third audit report dated 27 January 2005 from Ms H., **[confidential]** (‘the H report’), in which she stated that, **[confidential]**.

24      By judgment of 6 March 2006, the Špeciálny súd v Pezinku (Special Court, Pezinok, Slovakia) acquitted the director of the
Tax Office, who was suspended on 14 July 2004, of all charges.

25      Following an extraordinary appeal against the decision of the Krajský súd v Košiciach of 14 July 2004, the Najvyšší súd Slovenskej
republiky, by decision of 27 April 2006, partially overturned the decision of the Krajský súd v Košiciach of 14 July 2004
on the ground that road tax arrears in the amount of SKK 424 490 had wrongly been included in the arrangement. The Najvyšší
súd Slovenskej republiky dismissed the appeal as to the remainder. By decision of 18 August 2006, the Krajský súd v Košiciach
implemented the decision of the Najvyšší súd Slovenskej republiky of 27 April 2006 and stipulated the corrected amount due
to the Tax Office as being SKK 640.4 million (35% of which amounts to SKK 224.1 million).

3.     *Administrative procedure before the Commission*

26      By letter of 15 October 2004, a complaint was made to the Commission concerning alleged unlawful aid in favour of the applicant.

27      By letter of 6 December 2004, the Commission requested the Slovak Republic to inform it about the measure in question, namely
the partial remission of the applicant’s tax debt in the context of an arrangement.

28      By letter of 4 January 2005, the Slovak Republic informed the Commission about possible unlawful aid granted to the applicant
and asked it to approve the aid as rescue aid to a company in difficulties.

29      After receiving additional information, the Commission, by letter of 5 July 2005, notified the Slovak Republic of its decision
to initiate the formal investigation procedure provided for in Article 88(2) EC as regards the measure in question (‘the decision
to initiate the formal investigation procedure’). That decision was published in the *Official Journal of the European Union* of 22 September 2005 (OJ 2005 C 233, p. 47) and interested parties were at the same time invited to submit their comments
on the measure in question.

30      By letter of 10 October 2005, the Slovak Republic sent its comments on the measure in question to the Commission. The applicant
likewise sent its comments on the measure in question to the Commission, by letter of 24 October 2005, and those comments
were forwarded to the Slovak Republic to allow it to respond, which it did by letter of 16 December 2005.

31      On 28 March 2006 there was a meeting between the Commission and the applicant. At that meeting the applicant stated inter
alia that it had chosen the arrangement procedure instead of the bankruptcy procedure, that Old Herold produced using the
applicant’s assets and brand, that their cooperation, which had started in July 2004, was based on an exclusive distribution
agreement of products of Old Herold, that the pledge amounted to SKK 194 million, that the E report was intended to show the
Tax Office that the arrangement procedure was preferable to a bankruptcy procedure, that it was not able to explain why the
company E had used figures of 31 March 2004, that the supplier loan had been given to it by Old Herold during the second half
of 2004 and that the standard maturity for the applicant’s liabilities was between 14 and 60 days.

32      By letter of 4 April 2006, the applicant forwarded the Commission a copy of the judgment of 6 March 2006 delivered by the
Špeciálny súd v Pezinku.

33      By letter of 5 May 2006, the Slovak Republic sent additional information to the Commission.

34      On 7 June 2006, the Commission adopted Decision 2007/254/EC on State aid C 25/2005 (ex NN 21/05) implemented by the Slovak
Republic for the applicant (OJ 2007 L 112, p. 14) (‘the contested decision’).

35      The operative part of the contested decision provides:

‘Article 1

The State aid which the Slovak Republic has implemented for [the applicant], amounting to SKK 416 515 990, is incompatible
with the common market.

*Article 2*

1.      The Slovak Republic shall take all necessary measures to recover from the [applicant] the unlawfully granted aid referred
to in Article 1.

2.      Recovery shall be effected without delay and in accordance with the procedures of national law provided that they allow the
immediate and effective execution of this decision.

3.      The sum to be recovered shall bear interest throughout the period running from the date on which it was put at the disposal
of [the applicant] until its actual recovery.

4.      The interest shall be calculated in accordance with the provisions laid down in Chapter V of Commission Regulation (EC) No
794/2004 of 21 April 2004 implementing Council Regulation (EC) No 659/1999 laying down detailed rules for the application
of Article [88 EC]. The interest rate shall be applied on a compound basis throughout the entire period referred to in paragraph
3.

*Article 3*

The Slovak Republic shall inform the Commission, within two months of notification of this Decision, of the measures taken
to comply with it. It shall provide this information using the questionnaire attached in Annex I to this Decision.

*Article 4*

This Decision is addressed to the Slovak Republic.’

36      The applicant received a copy of the contested decision from the Mission of the Slovak Republic in Brussels (Belgium) on 2
November 2006.

**Procedure and forms of order sought**

37      By application lodged at the Registry of the Court on 12 January 2007, the applicant brought the present action.

38      By document lodged at the Registry of the Court on 8 June 2007, the undertaking St. Nicolaus trade a.s. sought leave to intervene
in these proceedings in support of the Commission.

39      By order of 11 October 2007, the President of the Second Chamber of the Court granted that leave to intervene and decided
that, given that the application to intervene was made after the expiry of the period of six weeks prescribed in Article 115(1)
of the Rules of Procedure of the Court, the intervener would have the rights provided for in Article 116(6) of those rules.

40      Upon hearing the Report of the Judge-Rapporteur, the Court (Second Chamber) decided to open the oral procedure and, by way
of measures of organisation of procedure provided for in Article 64 of the Rules of Procedure, the applicant and the Commission
were requested to lodge certain documents and to answer a number of questions in writing. The parties answered those measures
of organisation within the prescribed time‐limits.

41      The parties presented oral argument and replied to questions put by the Court at the hearing on 14 October 2009.

42      The applicant claims that the Court should:

–        annul the contested decision or, at least, annul totally or in part Article 1 thereof;

–        order the Commission to pay the costs.

43      The Commission, supported by the intervener, contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

44      At the hearing, the intervener essentially supported the form of order sought by the Commission, to the effect that the Court
should dismiss the action and order the applicant to pay the costs.

**Substance**

45      In support of its claim for annulment, the applicant relies on 10 pleas in law alleging (i) a manifest error in the assessment
of the amount of the aid measure in question, (ii) infringement of an essential procedural requirement and of Article 33 EC,
(iii) essentially, that the Commission lacked the competence to adopt the contested decision, (iv) that the Commission erred
in law and in fact when it found the bankruptcy procedure to be more advantageous than the arrangement procedure, (v) that
the Commission erred in law and in fact by finding the tax execution procedure to be more advantageous than the arrangement
procedure, (vi) that the Commission erred in law and in fact by failing to discharge the burden of proof incumbent on it and
infringed the applicable legal rules regarding the application of the test of a private creditor in a market economy, (vii)
that the Commission erred in law and fact by failing to correctly assess or have regard to the evidence at its disposal, (viii)
that the Commission erred in law and in fact by taking into account irrelevant evidence, (ix) infringement of Article 253
EC in that the Commission provided an inadequate statement of reasons for the contested decision and (x) that the Commission
erred in fact and in law by not exempting the arrangement as restructuring aid and by retroactively applying the Community
guidelines on State aid for rescuing and restructuring firms in difficulty (OJ 2004 C 244, p. 2; ‘the 2004 Guidelines’).

1.     *The first plea: manifest error in the assessment of the amount of the aid measure in question*

*Arguments of the parties*

46      The applicant maintains that the amount referred to in Article 1 of the contested decision, namely SKK 416 515 990, is manifestly
incorrect. In its submission, the Commission ignored the decision of the Najvyšší súd Slovenskej republiky of 27 April 2006
which had reduced by SKK 424 490 the amount of the tax debt taken into account in the arrangement procedure. The correct amount
is SKK 416 240 072. Consequently, the contested decision is vitiated by a manifest error of assessment. It, or at least Article
1 thereof, must therefore be annulled.

47      The Commission, supported by the intervener, disputes all the arguments raised by the applicant in support of the first plea.

*Findings of the Court*

48      It should be noted at the outset that in an action for annulment the legality of the measure concerned must be assessed in
the light of the matters of fact and of law existing at the time when that measure was adopted (Joined Cases 15/76 and 16/76
*France*v*Commission* [1979] ECR 321, paragraph 7; Joined Cases T-371/94 and T-394/94 *British Airways and Others*v*Commission* [1998] ECR II‐2405, paragraph 81; Case T‐109/01 *Fleuren Compost* v *Commission* [2004] ECR II‐127, paragraph 50).

49      In particular, according to the case‐law, the legality of a decision concerning State aid is to be assessed in the light of
the information available to the Commission when the decision was adopted (Joined Cases C‐74/00 P and C‐75/00 P *Falck and Acciaierie di Bolzano* v *Commission*[2002] ECR I‐7869, paragraph 168; see also, to that effect, Case 234/84 *Belgium* v *Commission* [1986] ECR 2263, paragraph 16).

50      An applicant cannot therefore rely, before the Court, on matters of fact which were not put forward in the course of the pre‐litigation
procedure laid down in Article 88 EC (see, to that effect, Joined Cases C‐278/92 to C‐280/92 *Spain* v *Commission* [1994] ECR I‐4103, paragraph 31; Case C‐382/99 *Netherlands* v *Commission* [2002] ECR I‐5163, paragraphs 49 and 76; *Fleuren Compost* v *Commission*, paragraph 48 above, paragraph 51).

51      Similarly, it cannot be complained that the Commission failed to take into account matters of fact or law which could have
been submitted to it during the administrative procedure but which were not, as the Commission is under no obligation to consider,
of its own motion and on the basis of prediction, what information might have been submitted to it (*Fleuren Compost*v*Commission*, paragraph 48 above, paragraph 49 and the case-law cited).

52      In the present case, it is apparent from the summary of the decision to initiate the formal investigation procedure, which
was published in the Official Journal (OJ 2005 C 233, p. 47), that in determining the amount of the State aid the Commission
relied on the material set out in the decision of the Krajský súd v Košiciach of 14 July 2004 confirming the arrangement,
material which was not called in question either by the Slovak Republic in its comments of 10 October 2005, or by the applicant
in its comments of 24 October 2005.

53      Furthermore, it is not disputed that, when the Commission adopted the contested decision, it had not been informed either
by the applicant or by the Slovak Republic of the decision of the Najvyšší súd Slovenskej republiky of 27 April 2006 reducing
the amount of the applicant’s tax debt to be taken into account in the context of the arrangement procedure.

54      In the light of the case-law cited in paragraphs 48 to 50 above, the Commission cannot therefore be criticised for relying
on the material set out in the decision of the Krajský súd v Košiciach of 14 July 2004 and for not taking into account the
decision of the Najvyšší súd Slovenskej republiky of 27 April 2006 when determining the amount of the State aid. The first
plea must therefore be rejected as unfounded.

2.     *The second plea: infringement of an essential procedural requirement and of Article 33 EC*

*Arguments of the parties*

55      The applicant submits, first, that the contested decision is vitiated by an infringement of an essential procedural requirement
and should therefore be annulled. It maintains that in so far as at the time the measure in question was taken it mainly produced
agricultural products as defined under Annex I of the EC Treaty, Agriculture and Rural Development DG, and not Competition
DG, was the competent Directorate‐General within the Commission to carry out the investigation and take the steps that led
to the adoption of the contested decision. For those reasons, the decision to initiate the formal investigation procedure
and the contested decision should have been signed by the Commissioner responsible for Agriculture and Rural Development and
not by the Commissioner responsible for Competition. Secondly, the applicant complains that the Commission did not have regard,
in the contested decision, to the objectives set out in Article 33 EC.

56      The Commission, supported by the intervener, contests all the arguments put forward by the applicants in support of the second
plea.

*Findings of the Court*

57      As regards the first part of the second plea, alleging infringement of an essential procedural requirement, the Court observes
that it is based on the premiss that, when the measure in question was granted, the applicant mainly produced agricultural
products falling within Annex I of the EC Treaty, so that only the Agriculture and Rural Development DG and the Commissioner
responsible for agriculture and rural development were competent to undertake an investigation into the measure in question
and adopt the decision to initiate the formal investigation procedure and the contested decision.

58      As the Commission maintains, it is explicit from the applicant’s comments of 24 October 2005, and more specifically from table
1 in those observations, that, in 2004, the applicant’s total turnover amounted to approximately SKK 880.3 million and the
turnover generated by activities related to the production of alcohol and spirits to approximately SKK 728.8 million. Those
activities therefore accounted for over 82% of the applicant’s total turnover. It must be stated that, in view of that significant
proportion of turnover generated by its activities related to the production of alcohol and spirits, the applicant has failed
to show that its activities of producing agricultural products, which fell within Annex I to the EC Treaty when the measure
in question was taken, were more significant than the first set of activities. Accordingly, in the light of the material in
the file, it is clear that, at the material time, the majority of the applicant’s total turnover was derived from its activities
related to the production of alcohol and spirits. The first part of the second plea must therefore be rejected as manifestly
having no factual basis.

59      As regards the second part of the second plea, alleging that the Commission did not have regard to the objectives set out
in Article 33 EC, it should be recalled that, under the first paragraph of Article 21 of the Statute of the Court of Justice
of the European Union, applicable to the procedure before the General Court by virtue of the first paragraph of Article 53
thereof, and Article 44(1)(c) of the Rules of Procedure, each application is required to state the subject-matter of the dispute
and a summary of the pleas in law on which the application is based. According to consistent case-law it is necessary, for
an action to be admissible, that the basic matters of law and fact relied on be indicated, at least in summary form, coherently
and intelligibly in the application itself (see Case T‐201/04 *Microsoft* v *Commission* [2007] ECR II‐3601, paragraph 94 and the case-law cited).

60      However, in the present case, the applicant did not put forward any matters of fact or law in support of its complaint alleging
infringement of Article 33 EC. Accordingly, contrary to the requirements of Article 44(1)(c) of the Rules of Procedure, the
applicant did not set out in summary form the second part of the second plea. The Court therefore rejects the second part
of the second plea as manifestly inadmissible.

61      It is clear from the explanations above that both parts of the second plea must be rejected, the first part as manifestly
lacking any factual basis and the second part as manifestly inadmissible.

3.     *The third plea: infringement of Section 3 of Annex IV to the Treaty of Accession, Article 253 EC, Article 88 EC and Regulation
(EC) No 659/1999 inasmuch as the Commission lacked the competence to adopt the contested decision*

*Arguments of the parties*

62      The applicant submits that the Commission lacked the competence to review the measure in question. It maintains that even
if that measure constituted a State aid for the purposes of Article 87 EC, it was granted and put into effect when the Slovak
tax authorities, prior to the accession of the Slovak Republic to the European Union on 1 May 2004 (‘the accession of the
Slovak Republic’), had decided to discard the option of a bankruptcy procedure and that of a tax execution procedure. The
applicant submits that, upon the opening of the arrangement procedure on 29 April 2004, it could legitimately have expected
the Slovak tax authorities to take all formal steps necessary to implement the arrangement. After that date, the approval
of the proposed arrangement at the arrangement hearing of 9 July 2004 was a mere formality. The applicant adds that the measure
in question no longer applied as of that date. Consequently, that measure constitutes existing aid and not new aid, with the
result that the Commission lacks the competence to request that it be recovered on the basis of Article 88(2) EC and Article
14 of Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83,
p. 1).

63      More specifically, the Commission’s position in the contested decision is contradictory as regards the point in time at which
State aid was granted in the present case. On the one hand, the Commission cites *Fleuren Compost*v*Commission*, paragraph 48 above, as authority for its finding that the measure in question had been granted only at the time of adoption
of the legally binding act, that is to say on 9 July 2004. On the other hand, the Commission based its finding that the measure
in question constituted State aid on the ground that the Slovak tax authorities had failed to initiate ‘appropriate procedures
prior to the commencement of the arrangement procedure’. It is apparent from the Commission’s administrative practice and
the case-law that, in numerous cases, State aid was found to be granted through failure to act, even in the absence of a legally
binding formal document.

64      Furthermore, the applicant maintains that the measure in question was no longer applicable after the accession of the Slovak
Republic. In that regard it submits that the arrangement did not create any liability for the Slovak Republic post-accession
as no payments and additional remissions were required.

65      The Commission, supported by the intervener, disputes all the arguments raised by the applicant in support of the third plea.

*Findings of the Court*

66      In recitals 61 to 68 of the contested decision, the Commission found that some of the relevant events in the present case
took place before the accession of the Slovak Republic to the European Union. It then went on to state that the measures put
into effect after that accession clearly did fall within the field of competence of the Commission under the EC Treaty and
that, in order to determine the moment when a certain measure was put into effect, the relevant criterion was the legally
binding act by which the ‘competent national authority undertakes to grant aid’. In the present case, it found, first, that
the proposal to initiate the arrangement procedure was not an act of the ‘granting authority’, but an ‘act of the beneficiary’
and, second, that the decision of the court to commence the arrangement procedure was not an act of the ‘granting authority’.
It also found that there was no evidence that the Slovak Tax Directorate expressed its agreement with the measure in question
at the meeting in December 2003. On the contrary, the Slovak authorities denied any such preliminary agreement. According
to the Commission, the ‘decision of the competent authority to write off some of its claims’ was taken on 9 July 2004, that
is to say after the accession of the Slovak Republic, when the Tax Office agreed to the applicant’s proposed arrangement.
The Commission therefore considered that it was competent to ‘assess’ the measure in question pursuant to Article 88 EC.

67      The third plea, alleging that the Commission lacked the competence to adopt the contested decision, is based on the premiss
that the measure in question was granted before the accession of the Slovak Republic.

68      In order to rule on the merits of the third plea, the relevant criterion to be applied is the ‘legally binding act by which
the competent national authority undertakes to grant aid’ (see, to that effect, *Fleuren Compost*v*Commission*, paragraph 48 above, paragraph 74).

69      In this respect, it is first of all necessary to identify the object of the measure in question. In the applicant’s submission,
the measure in question was granted before the accession of the Slovak Republic, when the Tax Office decided not to initiate
the bankruptcy procedure or the tax execution procedure.

70      However, as the Commission rightly observes, a decision of a Member State authority to refrain from initiating a bankruptcy
procedure or a tax execution procedure is separate from a decision to approve a proposed arrangement, which in the present
case involved the Tax Office waiving 65% of its claims over the applicant. While a decision of a creditor not to initiate
a bankruptcy procedure or a tax execution procedure merely delays a possible forced recovery of the claim, a decision of that
creditor to approve a proposed arrangement means, subject to confirmation of that arrangement by the competent court, that
that creditor definitively waives all or part of that claim. Those two decisions are therefore clearly separate from one another.

71      Similarly, as is explicit both from the decision to initiate the formal investigation procedure and from the contested decision,
the measure in question consists solely in the Tax Office waiving 65% of its claims over the applicant under an arrangement.
In no event does the measure in question concern a decision of the Tax Office not to initiate a bankruptcy procedure or a
tax execution procedure.

72      Accordingly, in order to assess the merits of the third plea, alleging that the Commission lacked the competence to adopt
the contested decision, it is necessary only to determine at what point in time the Tax Office adopted its decision to approve
the applicant’s proposed arrangement.

73      Principally, first, the Court observes that the applicant maintains that, in the decision of 29 April 2004, the Krajský súd
v Košiciach authorised the arrangement procedure. By contrast, the Commission submits that, in that decision, the Krajský
súd v Košiciach merely authorised the opening of the arrangement procedure. It is therefore necessary to examine the scope
of the decision of the Krajský súd v Košiciach of 29 April 2004, since, in support of the third plea, the applicant claims
that the measure in question was adopted before the accession of the Slovak Republic, so that the Commission lacked the competence
to review the compatibility of that measure with the EC Treaty.

74      In this respect, first of all, it is apparent from the provisions of the Law on bankruptcy and arrangement with creditors,
and in particular from Article 50 of that law, that, before any confirmation of an arrangement, the court must find in a decision
that the conditions for opening an arrangement procedure have been satisfied. In no event can the decision of the Krajský
súd v Košiciach of 29 April 2004 be considered to constitute a decision confirming the arrangement in the present case.

75      In fact, in accordance with the provisions of Article 58(1) of the Law on bankruptcy and arrangement with creditors, the creditors
concerned who have adduced proof of their claims may make proposals or statements and cast votes in writing on the proposed
arrangement, even before the arrangement hearing provided for in Article 58(2) of that law has been held.

76      Moreover, in accordance with Article 50(3)(b) and Article 58(2) of the Law on bankruptcy and arrangement with creditors, the
opening of the arrangement procedure must enable the court to establish during an arrangement hearing which of the creditors
concerned approve and which of the creditors concerned do not approve the proposed arrangement. It is only if the conditions
as to majorities referred to in Articles 58a and 58b of the Law on bankruptcy and arrangement with creditors have been satisfied,
and in compliance with the provisions of Articles 60 and 61 of that law, that the court can decide to confirm the arrangement.
Accordingly, it is apparent from the provisions of the Law on bankruptcy and arrangement with creditors that it is only after
the opening of an arrangement procedure and after the creditors concerned have adduced proof of their claims and have been
requested, at the latest at an arrangement hearing, to vote in favour of the arrangement, that a decision confirming the arrangement
can be adopted.

77      Next, it is apparent from the wording itself of the decision of the Krajský súd v Košiciach of 29 April 2004 that that court
requested the creditors concerned to adduce proof of their claims in the context of the arrangement procedure within a period
of 10 weeks, convened an arrangement hearing on 9 July 2004 and reproduced the arrangement conditions as set out in the applicant’s
proposed arrangement of 8 March 2004.

78      Lastly, the Court would point out that, in its comments of 24 October 2005, the applicant stated that, on 29 April 2004, the
Krajský súd v Košiciach had approved the first stage of the arrangement procedure, all the required substantive and procedural
conditions having been met. The applicant added that the second stage of the arrangement procedure had been completed by the
adoption of the decision of 14 July 2004 in which the Krajský súd v Košiciach had confirmed the arrangement.

79      In the light of the considerations set out in paragraphs 74 to 78 above, the Court finds that the decision of the Krajský
súd v Košiciach of 29 April 2004 does not constitute a legally binding act within the meaning of the case-law cited in paragraph
68 above. By that decision, the Krajský súd v Košiciach merely found that, in the present case, the conditions for opening
an arrangement procedure had been fulfilled.

80      Second, as regards the effects of a decision to open an arrangement procedure, it is common ground that, under the provisions
of national law applicable in the present case, that decision deprives inter alia the debtor and its creditors of the right
to initiate a bankruptcy procedure throughout the arrangement procedure. However, Article 66 of the Law on bankruptcy and
arrangement with creditors provides that, where the proposed arrangement has not been approved by the creditors concerned,
the court must terminate the arrangement procedure. From that point onwards, the creditors concerned are therefore entitled
to initiate a bankruptcy procedure.

81      Third, it is undisputed that the Slovak tax authorities had the status of a preferential creditor in the present case. It
is equally undisputed that, in accordance with the provisions of the Law on bankruptcy and arrangement with creditors, a proposed
arrangement must be approved by the preferential creditors in order that the arrangement can be confirmed by the court. However,
contrary to the applicant’s submission, there is nothing in the file to indicate that, before the adoption of the decision
of the Krajský súd v Košiciach of 29 April 2004, the applicant received any guarantee from the Tax Office that its proposed
arrangement of 8 March 2004 would be approved. The applicant is therefore wrong to submit that the measure in question was
granted by the Slovak Republic before 1 May 2004.

82      In addition, the Court would point out that, as is apparent from recital 57 of the contested decision, the Slovak authorities
twice formally indicated their opposition to the approval of the applicant’s proposed arrangement. By letter of 15 January
2004, the Slovak Minister for Finance requested the Slovak Tax Directorate not to agree to proposals for arrangements that
would involve the writing-off of tax receivables. By letter of 6 July 2004, the Slovak Tax Directorate asked the Tax Office
not to accept the arrangement proposed by the applicant.

83      Admittedly, it is apparent from the documents before the Court that, in its judgment of 6 March 2006, the Špeciálny súd v
Pezinku found that the letters of 15 January and 6 July 2004 had no binding effect. However, even though those letters had
no binding effect, such recommendations very clearly revealed the position of the Slovak Tax Directorate, the latter viewing
unfavourably not only the applicant’s proposed arrangement, but also, more generally, any tax write‐off in the Slovak Republic.
The Commission cannot therefore be criticised for relying, in the contested decision, on the letters of 15 January and 6 July
2004 as evidence showing that the Slovak authorities did not agree with the applicant’s proposed arrangement.

84      As is apparent from the documents before the Court, the Tax Office formally agreed to the applicant’s proposed arrangement
only at the arrangement hearing of 9 July 2004. It is common ground that it is on the basis of unanimous approval of the applicant’s
creditors that the Krajský súd v Košiciach adopted its decision confirming the arrangement on 14 July 2004.

85      Before 9 July 2004, the Slovak tax authorities, as a preferential creditor, could have opposed the applicant’s proposed arrangement,
which would have automatically brought about the closure by the Krajský súd v Košiciach of the arrangement procedure opened
on 29 April 2004. It is undisputed between the parties that, in the absence of such approval by the Tax Office, a preferential
creditor of the applicant, the Krajský súd v Košiciach could not have confirmed the arrangement. Accordingly, until 9 July
2004, the Tax Office could have vetoed the applicant’s proposed arrangement and, consequently, would have been entitled to
initiate either a tax execution procedure or a bankruptcy procedure after closure by the Krajský súd v Košiciach of the arrangement
procedure. It is apparent moreover from the applicant’s comments of 24 October 2005 that it asserts, in order to show that
the Tax Office was convinced that the solution of an arrangement, which the latter had approved on 9 July 2004, was preferable
to that of bankruptcy, that the Tax Office could have intervened at various stages of the arrangement procedure to prevent
that arrangement. That assertion clearly contradicts the applicant’s argument that the measure in question was granted before
29 April 2004.

86      It follows from all the foregoing that, in the present case, it is only from the point in time when the Tax Office formally
approved the proposed arrangement, namely on 9 July 2004, that that office took its decision to waive 65% of its claims over
the applicant. It was therefore after the accession of the Slovak Republic that the legally binding act by which the Slovak
authorities undertook to grant the aid measure in question was adopted.

87      In conclusion, the third plea must be rejected as unfounded.

4.     *The fourth, fifth, sixth, seventh, eighth and ninth pleas, alleging, in essence, errors of law and fact in relation to the
classification of the measure in question as State aid for the purposes of Article 87(1) EC*

*Preliminary observations*

88      It should be noted that the fourth and fifth pleas allege, respectively, that the Commission erred in law and in fact when
it found the bankruptcy procedure to be more advantageous than the arrangement procedure and that the Commission erred in
law and in fact by finding the tax execution procedure to be more advantageous than the arrangement procedure.

89      It is apparent from recital 75 of the contested decision that, in order to examine whether the measure in question could be
classified as State aid for the purposes of the provisions of Article 87(1) EC, the Commission used the test of a private
creditor in a market economy. In this respect, it examined whether the return from the arrangement procedure for the tax authorities
of the Slovak Republic exceeded that which they could have derived from a bankruptcy procedure or a tax execution procedure.
It was therefore sufficient that one of those two procedures was more advantageous than the arrangement procedure for the
Commission to be able to conclude that the test of a private creditor in a market economy had not been satisfied in the present
case and, accordingly, that the measure in question constituted State aid for the purposes of Article 87(1) EC.

90      Furthermore, the Court observes that, in so far as they seek to challenge the legality of the contested decision inasmuch
as it classifies the measure in question as State aid for the purposes of Article 87(1) EC, the sixth, seventh, eighth and
ninth pleas are connected either with the fourth plea or with the fifth plea.

91      It is therefore necessary, first of all, as regards the fourth plea, and as regards the sixth, seventh, eighth and ninth pleas
to the extent that they are connected with the fourth plea, to review the legality of the contested decision inasmuch as the
Commission found the bankruptcy procedure to be more advantageous than the arrangement procedure.

92      It is only if it were to be established that the Commission was wrong to find that the bankruptcy procedure was more advantageous
than the arrangement procedure that it would then be necessary to review the legality of the contested decision as regards
the fifth plea, and as regards the sixth, seventh, eighth and ninth pleas to the extent that they are connected with the fifth
plea, inasmuch as the Commission found the tax execution procedure to be more advantageous than the arrangement procedure.

*The legality of the contested decision, inasmuch as the Commission found the bankruptcy procedure to be more advantageous
than the arrangement procedure*

The arguments expounded in the fourth plea

–       Arguments of the parties

93      The applicant maintains that the arrangement did not confer a competitive advantage on it because the Slovak tax authorities
had acted like a private creditor with the sole intention of maximising the return for the Slovak Republic. Not only was the
arrangement not ‘manifestly more generous’ for the applicant, but it is also the obvious choice for any private creditor when
having to decide between the immediate partial enforcement of a claim on the one hand and lengthy and costly bankruptcy proceedings
with a high risk of receiving only an amount lower than that which he would receive pursuant to an arrangement on the other.
In the contested decision the Commission reaches a different conclusion on the basis of an incorrect assessment of the facts,
erroneous conclusions, unwarranted assumptions and uncorroborated statements made by a Member State, which, from the outset,
and for reasons unclear but suspicious, admitted that it had granted unlawful State aid.

94      In the first place, the applicant alleges that the Commission did not take the duration of the bankruptcy procedure in Slovakia
and third party reports in this regard into consideration. The applicant maintains that the most striking difference between
the arrangement procedure and bankruptcy procedure concerns their respective duration. While, pursuant to the arrangement,
the outstanding sums payable are paid to creditors within a few months, the proceeds from the sale of a debtor’s assets in
a bankruptcy procedure are received by the creditors only after a much longer procedure. Moreover, in recital 54 of the contested
decision, the Commission merely refers to the Slovak authorities’ view that, in the present case, because of the small number
of creditors and the existence of assets with a positive liquidation value, a bankruptcy procedure would have been carried
out in a shorter than average period. However, the Commission did not explain how these factors could shorten the length of
the procedure. Furthermore, the applicant claims that the Commission admitted in the defence that it did not attempt to form
a view on how long bankruptcy proceedings in respect of the applicant’s assets would be likely to last. It did not therefore
take into consideration ‘lost interest income’ in its comparison of the bankruptcy procedure with the arrangement procedure.

95      In the applicant’s submission, even if those factors might have led to a faster than average bankruptcy procedure, it was
still incumbent upon the Commission to have regard to the various factors of the case that could have lengthened the duration
of that procedure. In this respect, it claims that, as most of its assets are special-purpose machines for the production
and processing inter alia of beverages, the number of potential buyers was limited. Furthermore, the geographical location
of those machines would have constituted a disadvantage in terms of transport and qualified personnel. It submits therefore
that both its real estate and its production facilities had no value to any major spirits producer in Slovakia and would have
been very difficult to sell.

96      The applicant maintains that information from various sources on the average duration of bankruptcy proceedings in Slovakia
had been made available to the Commission during the investigation. First, it maintains that it sent to the Commission, as
an Annex to its comments of 24 October 2005, a World Bank report of 2004 from which it was apparent that the average duration
of bankruptcy proceedings in Slovakia, in a best-case scenario, was 4 years and 8 months. Furthermore, it is also apparent
from a World Bank report of 2002, attached as an Annex to the application, that bankruptcy proceedings are the worst option
for a creditor, take between 3 and 7 years, and preferential creditors report an unusually low rate of return on their claims
of 5 to 10%, after payment of administrative costs. Secondly, the applicant observes that, in a report from 2004, which was
provided to the Commission as an Annex to the applicant’s comments of 24 October 2005, the Slovak Ministry of Justice estimated
the duration of bankruptcy proceedings in Slovakia to be between 3 and 7 years. Thirdly, it is apparent from the H report
that **[confidential]**. Fourthly, the Commission referred, in its reports of 2002 and 2003 on the Slovak Republic’s progress towards accession to
the European Union, to the concerns and improvements necessary as regards bankruptcy and insolvency procedures.

97      According to the applicant, even if the proceeds from the sale of its assets in a bankruptcy procedure set out in the contested
decision were calculated on the basis of the coefficient applied in the E report, it is evident that even the most optimistic
private creditor would have opted to receive SKK 225 million in December 2004 rather than potentially receiving up to SKK
239 million (SKK 275 million corresponding to the probable total proceeds from the sale of its assets in a bankruptcy procedure,
minus a minimum of SKK 36 million corresponding to the costs of a bankruptcy procedure) at some time in a period between ‘shorter
than the average’ and 7 years. The applicant claims that, in view of (i) the difference of SKK 14 million between the sum
that could be obtained pursuant to the arrangement and that which could be obtained from bankruptcy and (ii) the discount
rate of 5.1% applicable in March 2004, the bankruptcy procedure would have had to have lasted for no more than 13.5 months
for a private creditor to opt for the bankruptcy procedure instead of the arrangement procedure. Such a short period is inconceivable
in the present case.

98      In the second place, the applicant alleges that the Commission did not take the costs of bankruptcy proceedings in Slovakia
and third party reports in this regard into consideration. The applicant maintains that those costs amounted, according to
the E report, to SKK **[confidential]**, that is to say **[confidential]** of the estimated proceeds of SKK **[confidential]** from the sale of its assets in such a procedure and, according to the K report, to SKK **[confidential]**, that is to say **[confidential]** of the estimated proceeds of SKK **[confidential]** from the sale of its assets in such a procedure. The Commission subtracted from the estimated proceeds of SKK 275 million
from the sale of the applicant’s assets in a bankruptcy procedure an amount of SKK 36 million corresponding to the costs of
a bankruptcy procedure, an amount which, in actual fact, corresponds to the costs associated with estimated proceeds of SKK
204 million from the sale of its assets in a bankruptcy procedure. The relative proportion of costs as a percentage of those
proceeds decreases as those proceeds increase. Therefore, the Commission erred in estimating the costs in the K report to
be lower than those stated in the E report. The applicant adds that on the basis of the costs of a bankruptcy procedure in
Slovakia as assessed in the 2004 World Bank report, corresponding to 18% of the proceeds from the sale of the assets in that
procedure, the Commission stated that the expected total proceeds, on the basis of the 17 June 2004 data, was lower than or
equal to the amount of the proceeds of the arrangement. The Commission’s argument that a bankruptcy administrator would have
continued the production process is not ‘convincing’ in so far as the applicant’s licence for the production and processing
of alcohol and spirits had been revoked and it could therefore no longer produce spirits.

99      In the third place, the applicant complains that the Commission did not take into consideration the additional labour and
operating costs with which the applicant would have been faced if a bankruptcy procedure had been initiated. The applicant
claims that, not only would it have had to continue to pay the wages of its workers and the operating costs but, in addition,
it might have had to gradually terminate the contracts of employment and, on that basis, pay severance payments.

100    In the fourth place, the applicant complains that the Commission did not take a precedent on the Slovak spirit market into
consideration, which a reasonable private creditor would have taken into account. In that respect it states that, in its comments
of 24 October 2005, it referred the Commission to the declared bankruptcy of Liehofruct White Lady Distillery, s.r.o. Levoča
(‘Liehofruct’). The applicant submits that that undertaking had, like the applicant, become the owner of a spirits distillery
formerly owned by the State and adds that ‘the tax authorities were also the major creditors’. It observes that the Liehofruct
bankruptcy procedure commenced in July 1999, that the assets had not been liquidated even after 10 rounds of auctions, during
which the highest offers did not exceed 30% of the estimated value of the undertaking and that, after 8 years, the procedure
has still not been closed. That proves that it was not easy to find a buyer for a distillery with outdated equipment in the
east of Slovakia.

101    In reply to the Commission’s argument that it did not explain in what respect the Liehofruct bankruptcy was similar to its
own, the applicant submits that it was the Commission’s duty to investigate that very question and that its failure to do
so constitutes a manifest error. The applicant also disputes the Commission’s assertion that the assets would have been sold
at the market price. In the applicant’s submission, every reasonable private creditor would have to expect that the sale price
of the assets of its debtor in a bankruptcy sale will be lower than the normal market price.

102    In the fifth place, the applicant submits that the Commission did not have regard to the report of the Slovak Ministry of
Justice of 2004, referred to in paragraph 96 above, according to which preferential creditors very rarely managed to recover
more than between 5 and 10% of their claims over an insolvent debtor in a bankruptcy procedure. That pessimistic assessment
contradicts the extremely positive assessment by the Slovak authorities of the bankruptcy procedure in the present case. By
failing to identify that discrepancy, the Commission therefore committed a manifest error of assessment.

103    In the reply, the applicant states that the assessment that it possessed liquid assets of SKK **[confidential]** took account of the postponement of payment dates granted by Old Herold following the proposed arrangement, the amount of
which was initially due in July 2004. Without denying the existence of those liquid assets, the applicant submits that in
bankruptcy proceedings Old Herold, in its capacity as a creditor, would also have had to be paid. A reasonable private creditor
would not therefore have expected to sell the non‐current assets, stock and short‐term receivables for an amount that exceeded
SKK 63.3 million, and after having deducted wage, administrative and legal costs as well as the partial payment of the existing
creditors, which would have included Old Herold. The applicant maintains that the approximate amount of SKK **[confidential]** obtained from the sale of its stock to Old Herold was based on a long-term agreement concluded with Old Herold and on the
latter’s belief that the arrangement would be successful. Old Herold would not have purchased that stock in a bankruptcy situation.
It is therefore not legitimate to take into account such monies when assessing the ‘potential financial return’ from a bankruptcy
procedure.

104    The applicant adds that the Commission’s statement that, as regards the liquid assets, the tax execution could have been carried
out through simple dispossession is not relevant since those liquid assets were earmarked for the Slovak tax authorities in
any event.

105    The Commission, supported by the intervener, disputes all the arguments raised by the applicant in support of the fourth plea.

–       Findings of the Court

106    In the first place, it should be noted that, as was pointed out in paragraph 49 above, the legality of a decision concerning
State aid is to be assessed in the light of the information available to the Commission when the decision was adopted.

107    Next, it is undisputed that the measure in question, which consists of the remission of a debt by the creditors in the context
of the arrangement approved by them, conferred an advantage on the applicant. However, the parties disagree on whether, in
the present case, in the light of the test of a private creditor in a market economy, the applicant would have obtained such
an economic advantage under normal market conditions and, therefore, on whether that measure constitutes State aid for the
purposes of Article 87(1) EC.

108    In that regard, it must be borne in mind that, in so far as the Commission’s application of the test of a private creditor
in a market economy involves complex economic appraisals, like the application of the test of a private investor in a market
economy, when reviewing it the Court must, according to a consistent line of decisions, confine itself to verifying whether
the Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts have been
accurately stated and whether there has been any manifest error of assessment of those facts or a misuse of powers (see Case
T‐36/99 *Lenzing* v *Commission* [2004] ECR II‐3597, paragraph 150 and the case-law cited, upheld by the Court of Justice in Case C‐525/04 P *Spain* v *Lenzing* [2007] ECR I‐9947, paragraph 59).

109    It must also be borne in mind that, whilst the Court of Justice recognises that the Commission has a margin of discretion
with regard to economic matters, that does not mean that the Courts of the European Union must refrain from reviewing the
Commission’s interpretation of information of an economic nature (Case C‐12/03 P *Commission*v*Tetra Laval* [2005] ECR I‐987, paragraph 39, and *Spain*v*Lenzing*, paragraph 108 above, paragraph 56).

110    According to the case-law of the Court of Justice, not only must the Courts of the European Union establish whether the evidence
relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which
must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions
drawn from it (see, to that effect, Case 98/78 *Racke* [1979] ECR 69, paragraph 5; Case C‐16/90 *Nölle* [1991] ECR I‐5163, paragraph 12; and Case C‐326/05 P *Industrias Químicas del Vallés* v *Commission* [2007] ECR I‐6557, paragraph 76). However, when conducting such a review, the Courts of the European Union must not substitute
their own economic assessment for that of the Commission (order in Case C‐323/00 P *DSG*v*Commission* [2002] ECR I‐3919, paragraph 43).

111    Lastly, where a Community institution has a wide discretion, the review of observance of certain procedural guarantees is
of fundamental importance. Thus, the Court of Justice has had occasion to specify that those guarantees include the obligation
for the competent institution to examine carefully and impartially all the relevant elements of the individual case and to
give an adequate statement of the reasons for its decision (see Case C‐269/90 *Technische Universität München* [1991] ECR I‐5469, paragraph 14, and Joined Cases C‐258/90 and C‐259/90 *Pesquerias De Bermeo and Naviera Laida*v*Commission* [1992] ECR I‐2901, paragraph 26).

112    Accordingly, in so far as the Commission found that the test of a private creditor in a market economy had not been satisfied,
the review of the legality of the contested decision must be confined to verifying whether the Commission committed a manifest
error in the assessment of the facts.

113    In the second place, in order to undertake that review of legality, it is necessary inter alia to take account of the following
four parameters in the present case.

114    The first parameter is the – uncontested – fact that the Slovak tax authorities, which granted the measure in question, have
the status of creditor. According to settled case‐law, a public body which has granted a debt remission should be compared
to a private creditor who is seeking to obtain payment of sums owed to it by a debtor in financial difficulties. The status
of creditor should be distinguished from that of a private investor in a market economy pursuing a structural policy – whether
general or sectoral – guided by the longer-term prospects of profitability of the capital invested (see, to that effect, Case
T‐152/99 *HAMSA* v *Commission* [2002] ECR II‐3049, paragraph 167 and the case-law cited).

115    The second parameter is the – uncontested – fact that the public authority which granted the measure in question is a preferential
creditor. It should be borne in mind that, when a firm faced with a substantial deterioration of its financial situation proposes
an agreement or series of agreements for debt arrangement to its creditors with a view to remedying the situation and avoiding
liquidation, each creditor must make a decision having regard to the amount offered to it under the proposed agreement, on
the one hand, and the amount it expects to be able to recover following possible liquidation of the firm, on the other. Its
choice is influenced by a number of factors, such as the creditor’s status as a secured, preferential or ordinary creditor,
the nature and extent of any security it may hold, its assessment of the chances of the firm being restored to viability,
as well as the amount it would receive in the event of liquidation (*HAMSA*v*Commission*, paragraph 114 above, paragraph 168).

116    The third parameter is the Commission’s particularly cautious assessment of the proceeds from the sale of the applicant’s
assets in a bankruptcy procedure. In this respect, the Court finds that the proceeds from a bankruptcy procedure, as assessed
by the Commission in table 4 of the contested decision, namely SKK 275 million, represented a minimum assessment. The book
value of the applicant’s assets set out in that table was based (i) to a very large extent on the data provided by the applicant
and (ii) as regards the 17 June 2004 data, on the results of the inspection that the Slovak tax authorities had carried out
in the applicant’s premises on 21 June 2004.

117    In this respect, the Court notes that the applicant does not challenge the validity of the data collected by the Slovak tax
authorities at its inspection of 21 June 2004. Moreover, not only did the Commission display extreme caution when valuing
the assets, as is apparent in particular from footnotes 20 and 23 of the contested decision, but it also applied in that table,
as is apparent from recitals 84 to 87 of the contested decision, the liquidation factors used in the E report, even though
it considered those factors to be too low.

118    Moreover, in table 4 of the contested decision, the Commission presented a valuation of the proceeds from the sale of the
applicant’s non‐current assets as at 17 June 2004 in a bankruptcy procedure at SKK 90 million, whilst their book value amounted
to SKK 200 million. As is apparent from recital 87 of the contested decision, the Commission maintains that, since those claims
were secured, in the applicant’s own submission, in the amount of at least SKK 194 million, the amount of the proceeds that
the applicant would have been able to derive from the liquidation of the non‐current assets ought to have been at least equal
to the value of those secured claims. However, in table 4 of the contested decision, the Commission took care to apply the
liquidation factor used in the E report.

119    Lastly, in table 4 of the contested decision, the Commission applied a liquidation factor of 20%, set out in the E report,
to calculate the proceeds from the sale of the applicant’s stock in a bankruptcy procedure, even though, on 17 June 2004,
the book value of that stock had diminished by SKK 125 million, that is to say a reduction of 60% in comparison with the stock
which existed in March 2004.

120    It is apparent from the foregoing considerations that the Commission regarded the assessed value of the proceeds from the
sale of the applicant’s assets in a bankruptcy procedure as at 17 June 2004, as that assessment emerges from table 4 of the
contested decision, as the strict minimum that a private creditor would have taken into consideration in order to assess the
advantages of a bankruptcy procedure in comparison with the proceeds from the arrangement approved on 9 July 2004.

121    The fourth parameter is the partial remission of the applicant’s debt. Unlike an arrangement procedure, a bankruptcy procedure
does not enable a debtor to obtain from its creditor a debt remission. In other words if, at the end of the bankruptcy procedure,
the proceeds from the sale of a debtor’s assets have not sufficed to pay off all its creditors, those creditors can still
require from the debtor repayment of the outstanding sums due.

122    It is therefore appropriate to examine the applicant’s arguments under the fourth plea in the light of the foregoing considerations.

123    First, as regards the applicant’s argument that the Commission did not take the duration of a bankruptcy procedure in Slovakia
and third party reports in this regard into consideration, the Court would point out first of all that, contrary to the applicant’s
submission, the Commission not only stated, in recital 54 of the contested decision, that, according to the Slovak Republic,
the duration of a bankruptcy procedure would have been lower than average in the light of the specific circumstances of the
case, but also mentions, in recital 40 of the contested decision, that, according to the applicant, the bankruptcy procedure
lasts on average 3 to 7 years in Slovakia. The Commission stated that the applicant based its position on material, statistics
and an example of a Slovak company allegedly in a similar situation to its own. It cannot therefore be alleged that the Commission
ignored that question and the applicant’s position in this respect.

124    In addition, as regards the evidence available to the Commission, the Court would point out that the data, which were themselves
provided by the applicant, do not satisfy the requirements of reliability and consistency. The assessments of the duration
of a bankruptcy procedure in Slovakia that the applicant submitted to the Commission were general and did not take account
of the characteristics of this case. Similarly, some of those assessments were of an approximate nature and, to a certain
extent, were inconsistent with one another. The applicant relies on four reports, referred to in paragraph 96 above, in which
that duration was assessed variously at 4 years and 8 months, at a period of between 3 years and 7 years, or at more than
6 years.

125    The other reports to which the applicant refers are the Commission reports of 2002 and 2003 on the Slovak Republic’s progress
towards accession to the European Union. The applicant submits that in those reports the Commission referred to the concerns
and improvements necessary as regards bankruptcy and insolvency procedures in Slovakia. However, it must be pointed out that
those Commission reports relate to the bankruptcy procedure in Slovakia in general and do not take account of the characteristics
of this case.

126    Moreover, the Court observes that the applicant failed to refer to the results of the K report in relation to the possible
duration of a bankruptcy procedure concerning it. In that report, which the applicant itself submitted in this case, that
duration was assessed at ‘ca. 2 years (depending on conditions and trustee’s work)’. The Court would point out that not only
was that assessment of the duration of such a bankruptcy procedure clearly much more optimistic than the other assessments
submitted by the applicant but it also referred specifically to the applicant.

127    In addition, as the Commission maintains, where, as is the case here, the number of the debtor’s creditors is small and there
are assets with a positive liquidation value, the bankruptcy procedure can be carried out in a shorter than average period.
That is especially true in the present case since it is undisputed between the parties that the Slovak tax authorities’ claim
over the applicant represented approximately 99% of the applicant’s liabilities and that those authorities had the status
of a preferential creditor. It follows that the Slovak tax authorities would have had a decisive influence on the duration
of the bankruptcy procedure. It is true that the applicant asserts that the characteristics, the geographical location and
the outdated nature of most of its assets would have made it difficult to find a buyer and, therefore, slowed down the course
of the bankruptcy procedure. However, as the Commission stated in recital 88 of the contested decision, several factors, and
in particular the fact that some of the applicant’s production assets found a user after the withdrawal of its licence for
the production and processing of alcohol and spirits, tend to show that that assertion of the applicant is unfounded.

128    Lastly, as regards whether the most optimistic private creditor would have opted to receive SKK 225 million in December 2004
rather than potentially receiving up to SKK 239 million at some time in a period between ‘shorter than the average’ and 7
years, it should be borne in mind, as is observed in paragraphs 116 to 120 above, that the proceeds from the sale of the applicant’s
assets in a bankruptcy procedure, as assessed by the Commission, namely SKK 275 million, represented a minimum assessment.
Accordingly, the applicant’s calculation, in the light of the duration of the bankruptcy procedure and the proceeds that a
private creditor might have expected from the sale of the applicant’s assets in a bankruptcy procedure with account being
taken of the relevant interest income, is irrelevant in the light of the circumstances of the present case and in particular
of the caution displayed by the Commission regarding the assessment of those proceeds.

129    It follows from the foregoing that the Commission did not commit a manifest error in its assessment of the duration of the
bankruptcy procedure.

130    Second, as regards the applicant’s argument that the Commission did not take the costs of bankruptcy proceedings in Slovakia
and third party reports in this regard into consideration, the applicant maintains that, according to the E report, those
costs represented 22% of the estimated proceeds of SKK 204 million from the sale of its assets in such a procedure and, according
to the K report, 28% of the estimated proceeds of SKK 78 million from the sale of its assets in such a procedure.

131    In this respect, the Court would point out first of all that the rate of 28% on which the applicant relies is manifestly incorrect.
As is apparent from the K report, the proceeds from the sale of the applicant’s assets in a bankruptcy procedure, under variant
III, were assessed at SKK 100 million. In order to calculate those proceeds, the auditor subtracted SKK 22 million corresponding
to the costs of the bankruptcy procedure. Those costs therefore represented 22% and not, as the applicant claims, 28% of the
proceeds from the sale of its assets in such a procedure.

132    The applicant also complains that the Commission subtracted from the estimated proceeds of SKK 275 million from the sale of
the applicant’s assets in a bankruptcy procedure an amount of SKK 36 million in respect of the costs of such a procedure.
In the applicant’s submission, that amount of SKK 36 million corresponded to the costs associated with estimated proceeds
of SKK 204 million from the sale of its assets in a bankruptcy procedure.

133    In this respect, the Court notes that, in recital 89 of the contested decision, the Commission found as follows:

‘In addition, the credibility of [E’s] report is also affected by the manner of calculating the various fees involved in a
bankruptcy procedure that were to be subtracted from the total yield from the sale of the assets. Whereas [the company E]
deducted SKK 45 million in fees, the [applicant] in its submission gave the figure of SKK 36 million and the estimate of [its
internal auditor, Ms K.] is SKK 22 million at most. Such discrepancies raise doubts as to the accuracy of [the company E’s]
assumptions regarding the level of the fees and, therefore, also the level of the yield that could have been obtained in a
bankruptcy procedure. It is noted, nevertheless, that, considering the [applicant’s] situation on 17 June 2004, even with
fees of SKK 36 million, the yield in bankruptcy would have been higher than with the proposed arrangement.’

134    The applicant is right to complain that the Commission compared the two relative values of the costs of a bankruptcy procedure
as calculated in the E report and the K report without taking account of the fact that those values had been calculated in
proportion to two absolute values, namely the proceeds from the sale of the applicant’s assets in a bankruptcy procedure as
estimated in those reports, which were not comparable. The applicant is therefore also right to challenge the reasons that
led the Commission to disregard the data in those reports in this regard. As is apparent from paragraphs 130 and 131 above,
in those two reports, the costs of a bankruptcy procedure represented 22% of the estimated value of the proceeds from the
sale of the applicant’s assets in the bankruptcy procedure set out in those reports.

135    Similarly, it is necessary to reject as unfounded the Commission’s argument that during the investigation procedure the applicant
merely specified that, for proceeds of SKK 203.6 million, the remuneration of the bankruptcy administrator would have been
1.9% of the proceeds, without indicating the likely level of all the other costs. It is explicitly clear from paragraph 50
of the applicant’s comments of 24 October 2005 that it stated that the costs of bankruptcy, estimated at approximately 18%,
would amount to SKK 32 million, in addition to the remuneration of the bankruptcy administrator, estimated at SKK 3.8 million
(that is to say 1.9% of the estimated proceeds of SKK 203.6 million from the sale of the applicant’s assets in a bankruptcy
procedure).

136    However, it should be pointed out that, in recital 89 of the contested decision, the Commission not only expressly took account
of the fact that the applicant had given a figure of SKK 36 million for the costs of a bankruptcy procedure, but also states
that, even if those costs are subtracted from the proceeds of the sale of the applicant’s assets in such a procedure, the
sum obtained by the Slovak authorities would have been higher than the sum proposed in the arrangement procedure. It is apparent
from paragraph 50 of the applicant’s comments of 24 October 2005 that the estimate of the costs of the bankruptcy procedure
at SKK 36 million resulted from the addition of the remuneration of the bankruptcy administrator and the costs of bankruptcy
(SKK 3.8 million + SKK 32 million = SKK 35.8 million). Moreover, it cannot be disputed that that assessment of the costs of
a bankruptcy procedure was based on estimated proceeds of SKK 204 million from the sale of the applicant’s assets in that
procedure.

137    As the applicant itself acknowledges in its pleadings, the relative proportion of the costs of a bankruptcy procedure as a
percentage of the proceeds from the sale of the debtor’s assets decreases as those proceeds increase. By using SKK 36 million
as the amount to subtract from proceeds of the sale of the applicant’s assets in the bankruptcy procedure in which the proceeds
were estimated at SKK 275 million, the Commission would thus have arrived at a proportion of the costs of a bankruptcy procedure
also equivalent to 13% of those proceeds (SKK 275 million – SKK 36 million = SKK 239 million). If the Commission had deducted
an amount corresponding to 18% of those proceeds, that is to say the rate that the applicant considers to be appropriate in
the light of the World Bank report of 2004, the Commission would indeed have had to find that the proceeds from the sale of
the applicant’s assets in a bankruptcy procedure, after deduction of the costs relating thereto, would have been SKK 225.5
million. None the less, although that amount is virtually equal to the amount repaid to the creditors pursuant to the arrangement,
account should be taken of the fact that, as was observed in paragraphs 116 to 120 above, the Commission displayed extreme
caution when estimating the proceeds from the sale of the applicant’s assets in a bankruptcy procedure. The Court therefore
finds that, in the present case, the sum that the Slovak authorities would have been able to obtain from the sale of the applicant’s
assets in a bankruptcy procedure, after deduction of the costs relating thereto, was necessarily higher than the sum that
they obtained pursuant to the arrangement. It is apparent from the foregoing arguments that the Commission did not manifestly
err in finding that the proceeds from the sale of the applicant’s assets in a bankruptcy procedure, after deduction of the
costs relating thereto, would have been more advantageous than the amount obtained by the Slovak authorities pursuant to the
arrangement.

138    Third, the applicant cannot succeed in arguing that the Commission did not properly take into consideration the additional
labour and operating costs with which the applicant would have been faced if bankruptcy proceedings had been initiated. The
applicant’s claims are not supported by any evidence. Furthermore, the applicant does not contest that, as the Commission
maintains, notwithstanding the loss of its licence for the production and processing of alcohol and spirits on 6 March 2004,
it pursued its other production and distribution activities, which necessarily meant that turnover was being generated which
could cover part of the personnel and operating costs.

139    Fourth, as regards the applicant’s argument that the Commission did not take a precedent in the Slovak spirit market into
consideration, namely the declared bankruptcy of Liehofruct, it must be stated that, contrary to the applicant’s assertion,
the Commission did not ignore that precedent in the contested decision.

140    In fact, in footnote 9 which appears under recital 40 of the contested decision, the Commission stated, as regards the applicant’s
arguments on the duration of a bankruptcy procedure in Slovakia and the proceeds from the sale of the applicant’s assets in
a bankruptcy procedure in Slovakia, that ‘[the applicant] gives an example of a company owning similar assets and operating
in the same sector ...’. It is apparent from the applicant’s comments of 24 October 2005 that the only precedent in Slovakia
on which the applicant relied relates to Liehofruct. The Court therefore finds that the example cited by the Commission in
the contested decision relates to the bankruptcy of Liehofruct.

141    In addition, it is apparent from paragraph 43 of the applicant’s comments of 24 October 2005 that the applicant had not, at
that stage of the investigation procedure, sent to the Commission information which would have made it possible to establish,
as the applicant submits, that the situation of Liehofruct was similar to its own.

142    Furthermore, the applicant is wrong to submit that it was the Commission’s duty to investigate that very question and that
its failure to do so constitutes a manifest error. According to the case‐law, the Commission is under no obligation to consider,
of its own motion and on the basis of prediction, what information might have been submitted to it (see *Fleuren Compost*v*Commission*, paragraph 48 above, paragraph 49 and the case-law cited to that effect).

143    Lastly, contrary to the applicant’s submission, it is not apparent from the Commission’s pleadings that the Commission claims
that the sale of the applicant’s assets in a bankruptcy procedure would have generated an amount equal to their market price.
It is apparent from paragraph 123 of the defence that the Commission merely claimed that, in the light of its status as a
preferential creditor, the Slovak tax authorities could have received close to 100% of the proceeds from the sale of the applicant’s
assets in a bankruptcy procedure, as assessed, in the table above paragraph 123 of the defence, at the market value after
application of the liquidation factors. In addition, as is apparent from the contested decision and, in particular, from table
4 thereof, the Commission did not dispute that it was necessary to apply a liquidation factor to the book value of the applicant’s
assets in order to assess their market value.

144    Fifth, as regards the applicant’s argument that the Commission did not have regard to the report of the Slovak Ministry of
Justice of 2004, according to which, in a bankruptcy procedure, preferential creditors very rarely managed to recover more
than between 5 and 10% of their claims over an insolvent debtor, the Court would point out that, as the Commission maintains,
that report was of a general nature and was not designed to assess the specific situation of the applicant and the characteristics
of its principal creditor, the Slovak tax authorities. In addition, the information provided by the Slovak Republic to the
Commission in the investigation procedure related necessarily to the applicant’s specific situation and took account of the
specific status of its principal creditor. It cannot therefore be complained that the Commission committed a manifest error
in not taking account of the report of the Slovak Ministry of Justice of 2004.

145    Lastly, sixth, as regards the applicant’s assertion that the assessment – which it does not contest – that it possessed liquid
assets as at 17 June 2004 of SKK **[confidential]** took account of the postponement of payment dates granted by Old Herold following the proposed arrangement, the Court notes
that, as the Commission observes, that claim is not backed up by any material in the file supporting the conclusion that the
Commission ought to have taken account of the fact that part of those liquid assets were allegedly the result of such a postponement.

146    First of all, it is not apparent from the material in the file that, during the procedure, the applicant ensured that the
Commission was informed on that specific point. Next, the Court considers, like the Commission, that the applicant’s argument
in its pleadings by which it seeks to justify its assessment of the amount of the liquid assets allegedly resulting from the
postponement of payment dates granted by Old Herold is confused, or even contradictory.

147    In this respect, it must be observed, as the Commission states, that, in the application, the applicant asserts that Old Herold’s
claim amounted to SKK **[confidential]** on 31 July 2004 and that that claim continued to increase and was SKK **[confidential]** at the time of execution of the arrangement in December 2004. Accordingly, the applicant cannot now claim, without contradicting
itself, that the entirety or a significant part of the liquid assets at its disposal on 17 June 2004 could not be taken into
account, since it resulted from the postponement of payment dates granted by Old Herold. In addition, the fact that the applicant
submits, as set out in paragraph 104 above, in support of the fifth plea, that those liquid assets were in any event earmarked
for the Slovak tax authorities accentuates the confused and contradictory nature of its arguments in this regard. In view
of the foregoing considerations, it must be held that the applicant is clearly not able to justify why the liquid assets at
its disposal on 17 June 2004 could not be taken into account in a potential bankruptcy procedure.

148    Furthermore, it is apparent from the data contained in table 4 of the contested decision, which was drawn up, as is apparent
from recitals 80 and 82 of the contested decision, on the basis inter alia of the liquidation factor and the data in the E
report regarding the situation on 31 March 2004, that, on the one hand, between 31 March and 17 June 2004, the book value
of the applicant’s stock diminished by SKK 125 million, that is to say by slightly more than 40%. Thus, the conditions under
which the applicant’s stock was sold between those two dates were much more advantageous than those relied on in the E report,
in which a liquidation factor of 20% in respect of the stock was applied. On the other hand, between 31 March and 17 June
2004, the book value of the applicant’s liquid assets increased by SKK 111 million. In such circumstances, and in the absence
of any information provided by the applicant in this respect, it cannot be complained that the Commission found that that
increase in the liquid assets resulted from the sale of the stock during that period. Moreover, the applicant does not dispute
that the proceeds from the sales of its stock to Old Herold were SKK **[confidential]**. It asserts however that that sale was based on a long-term agreement concluded with Old Herold and on the latter’s belief
that the arrangement would be successful. That assertion cannot be taken into account since it has not been backed up by any
evidence submitted during the investigation procedure in respect of the measure in question.

149    It follows from all the foregoing that, since none of the arguments raised by the applicant in support of its fourth plea
is well founded, the applicant has failed to demonstrate that the Commission committed a manifest error in finding that the
bankruptcy procedure was more advantageous than the arrangement procedure.

150    In addition, the review of the contested decision, as regards the assessment of whether a bankruptcy procedure would have
been more advantageous than an arrangement procedure, does not cast doubt on the factual accuracy, reliability and consistency
of the evidence relied on by the Commission. On the contrary, that evidence constitutes a body of relevant data that the Commission
was justified in relying on in order to substantiate its finding that the test of a private creditor in a market economy had
not been satisfied in the present case.

151    It follows from all the foregoing that, to the extent that they seek to establish that the Commission was wrong to find that
the bankruptcy procedure was more advantageous than the arrangement procedure, the arguments raised in the fourth plea must
be rejected as unfounded.

The arguments put forward in the sixth plea, in so far as they concern the bankruptcy procedure

–       Arguments of the parties

152    The applicant submits that the Commission has not proved that the Slovak Republic had not acted like a private creditor but
has relied solely on the absence of evidence in support of the applicant’s position, thereby unduly shifting the burden of
proof to the applicant. The Commission also disregarded ‘the legal standards set forth by the Court of Justice on the application
of the test of a private creditor’.

153    More specifically, in order to assess whether a debt remission confers a competitive advantage on the recipient, the Commission
must, inter alia, as is apparent from paragraph 170 of *HAMSA*v*Commission*, paragraph 114 above, determine whether it is manifestly more generous than that which would have been granted by a private
creditor who makes cautious and pessimistic assumptions. It is incumbent upon the Commission to adduce ‘objective economic
evidence’, which can be reviewed by the General Court, to support a finding that the test of a private creditor in a market
economy has not been satisfied in the present case and the debt remission therefore constitutes State aid. It is not for the
Member State concerned or the beneficiary of that debt remission to adduce evidence that there was no State aid involved.

154    In the present case, the Commission not only drew erroneous conclusions in respect of the reports drawn up by independent
third parties which were provided by the applicant but also failed to fulfil its obligation to adduce evidence to support
its view that a bankruptcy procedure was more advantageous than an arrangement procedure. In any event, the Commission has
failed to demonstrate that the arrangement was manifestly more generous than what a private creditor would have agreed to
on the basis of cautious and pessimistic assumptions. The Commission merely concluded, on the basis of the evidence submitted,
that the sale of the applicant’s assets in a bankruptcy procedure would in all probability have led to a higher ‘yield’ for
the creditors than the sums paid pursuant to the arrangement. Furthermore, the Commission failed to have regard to the presumption
applied in Commission Decision 2003/283/EC of 27 November 2002 on the measures implemented by Spain in favour of Refractarios
Especiales SA (OJ 2003 L 108, p. 21; ‘the Refractarios Especiales decision’) that a private creditor makes cautious and pessimistic
assumptions. Consequently, such a creditor would attach a great deal of importance to the ‘negative image’ of bankruptcy procedures
in the Slovak Republic.

155    The applicant also maintains that, in the Commission’s pleadings, the Commission is wrong to complain on several occasions
that the applicant did not submit evidence during the investigation. That argument highlights, first, the failings of the
Commission and, secondly, its misunderstanding of its obligations under the EC Treaty.

156    The Commission, supported by the intervener, contends that all the arguments raised in support of the sixth plea should be
rejected to the extent that they concern the bankruptcy procedure.

–       Findings of the Court

157    To the extent that they seek to establish that the Commission was wrong to find that the bankruptcy procedure was more advantageous
than the arrangement procedure the arguments put forward in the sixth plea may be summarised as a complaint (i) that the Commission
relied solely on the fact that the applicant had not adduced any evidence in support of its position in order to find that
the Slovak Republic had not acted like a private creditor and (ii) that the Commission did not correctly apply the test of
a private creditor in a market economy.

158    In the first place, as regards the applicant’s argument that the Commission relied solely on the fact that the applicant had
not adduced any evidence in support of its position in order to find that the Slovak Republic had not acted like a private
creditor, the Court finds, first, that, as was recalled in paragraph 142 above, in the course of supervising aid measures,
the Commission is under no obligation to consider, of its own motion and on the basis of prediction, what information might
have been submitted to it.

159    Second, it is apparent from the material in the file that, on several occasions during the pre-litigation procedure laid down
in Article 88 EC, the applicant was presented with an opportunity, not only by means of exchanges of correspondence, but also
during the meeting of 28 March 2006, to provide the Commission with all the information in its possession in order to clarify
matters for the Commission with regard to its future action.

160    Third, it is apparent from the contested decision, in particular from recitals 78 to 92 thereof, that the Commission took
account of the information provided by the applicant at the stage of the pre‐litigation procedure laid down in Article 88
EC in establishing that the proceeds from the sale of the applicant’s assets in a bankruptcy procedure would have been lower
than the amount obtained pursuant to the arrangement.

161    Fourth, as regards the applicant’s claim that the Commission not only drew erroneous conclusions in respect of the reports
drawn up by independent third parties provided to the Commission but also failed to fulfil its obligation to adduce evidence
to support its view that a bankruptcy procedure was more advantageous than an arrangement procedure, it is apparent from the
considerations set out in paragraphs 123 to 151 above that that claim is unfounded.

162    Fifth, the Court would point out that, while, in paragraph 38 of the decision to initiate the formal investigation procedure,
the Commission had stated that the value of the Slovak authorities’ secured assets was approximately SKK 397.5 million, the
Commission not only stated, in the contested decision, that, according to the applicant, the value of the assets pledged in
favour of the Slovak authorities was SKK 194 million (see recital 87 of the contested decision), but also took into account
that amount for the purposes of weighing the proceeds from the sale of the applicant’s assets in a bankruptcy procedure against
the amount obtained pursuant to the arrangement.

163    It follows from the foregoing that the applicant cannot succeed in arguing that the Commission relied solely on the fact that
the applicant had not adduced any evidence in support of its position in order to find that the Slovak Republic had not acted
like a private creditor.

164    In the second place, as regards the applicant’s argument that the Commission did not correctly apply the test of a private
creditor in a market economy, the Court finds, first, that the applicant is wrong to submit, on the basis of *HAMSA*v*Commission*, paragraph 114 above, that, in order to assess whether a debt remission confers a competitive advantage on the recipient,
the Commission is required to show that that remission was manifestly more generous than that which would have been granted
to it by a private creditor who makes cautious and pessimistic assumptions.

165    On the one hand, as was recalled in paragraph 114 above, a public body, such as the Tax Office, should be compared to a private
creditor who is seeking to obtain payment of sums owed to it by a debtor in financial difficulties. Moreover, the applicant
cannot refer to the Refractarios Especiales decision in order to substantiate its assertion that a private creditor makes
cautious and pessimistic assumptions. In that decision, the Commission merely found that it was necessary to review the elements
at issue ‘under cautious and pessimistic assumptions and in accordance with the private creditor principle’ (see recital 62
of the Refractarios Especiales decision). Consequently, in that decision, the Commission, far from characterising the private
creditor as cautious and pessimistic, clearly distinguished two examination parameters, specific to that case, namely (i)
an examination under cautious and pessimistic assumptions and (ii) an examination in the light of the test of a private creditor
in a market economy. The applicant’s assertion that a private creditor makes cautious and pessimistic assumptions is therefore
unfounded.

166    On the other hand, as regards whether the Commission was required to show that the debt remission obtained by the applicant
pursuant to the arrangement was manifestly more generous than that which would have been granted by a private creditor, it
should be borne in mind that, as was observed in paragraphs 116 to 120 above, the proceeds from the sale of the applicant’s
assets in a bankruptcy procedure, as assessed by the Commission, namely SKK 275 million, represented a minimum assessment.
Similarly, as was observed in paragraph 121 above, account must be taken of the fact that, following a bankruptcy procedure,
if the proceeds from the sale of a debtor’s assets have not sufficed to pay off all its creditors, those creditors can still
require from the debtor repayment of the outstanding sums due. Accordingly, the amount of SKK 275 million relied on by the
Commission as the proceeds from the sale of the applicant’s assets in a bankruptcy procedure cannot constitute a reference
level for assessing whether that amount would have been higher than that obtained pursuant to the arrangement approved on
9 July 2004. In the light of the securities which the Slovak Republic enjoyed and of the fact that, as was found in paragraph
148 above, the conditions under which the applicant’s stock was sold between March and June 2004 were much more advantageous
than those relied on in the E report, and in the light of the liquid assets at the applicant’s disposal as at 17 June 2004,
it is reasonable to consider that the proceeds from the sale of the applicant’s assets in a bankruptcy procedure would have
been much higher than the amount obtained pursuant to the arrangement. The Commission was therefore right to find that the
test of a private creditor in a market economy was not satisfied in the present case.

167    Second, the applicant is wrong to criticise the Commission for not adducing ‘objective economic evidence’ in support of the
Commission’s findings in relation to the test of a private creditor in a market economy. As was recalled in paragraph 108
above, the Commission’s application of that test involves complex economic appraisals. In this respect, as stated in paragraphs
109 and 110 above, the Commission has a margin of discretion and, although the Courts of the European Union may review the
Commission’s interpretation of information of an economic nature, they must not substitute their own economic assessment for
that of the Commission when conducting such a review. The Commission cannot therefore be required to adduce ‘objective economic
evidence’ in support of its findings when applying the test of a private creditor in a market economy.

168    It follows from the foregoing that the applicant’s argument that the Commission did not correctly apply the test of a private
creditor in a market economy must fail. Accordingly, to the extent that they seek to establish that the Commission was wrong
to find that the bankruptcy procedure was more advantageous than the arrangement procedure, all the arguments raised in the
sixth plea must be rejected as unfounded.

The arguments put forward in the seventh plea, in so far as they concern the bankruptcy procedure

–       Arguments of the parties

169    The applicant complains, in essence, that the Commission did not carry out a diligent investigation and assessment of the
reports which it provided to the Commission.

170    The applicant maintains that, since the Commission had concluded that the reports provided by the applicant, in particular
the E report, were unreliable on account of ‘specific inconsistencies’, it should have requested clarification from the applicant
of the data submitted and sought an expert opinion on the E report or on the entire arrangement, which the applicant expressly
suggested. The Commission’s failure to obtain clarification deprives the contested decision of ‘any credibility’ and constitutes
a ‘serious infringement’ of the Commission’s obligation diligently and impartially to investigate and to examine the available
evidence.

171    None of the Commission’s assertions seeking to show that the E report is unreliable is factually accurate. It cannot be complained
that the company E used data from 31 March 2004 given that, at the time the report was being prepared in May 2004, only that
data was available.

172    The Commission errs in alleging that, in its report, the company E used a liquidation factor for stock which was too low,
namely 20%. First, the applicant maintains that a bankruptcy administrator could not have sold the stock of finished products
at the contractually agreed price and states that the stock of unfinished products and raw materials was unmarketable. Secondly,
it maintains that the company E regarded the yield from the inventory as being lower than 20%.

173    The applicant states that the company E estimated, in its report, the ‘proceeds’ for short-term receivables to be higher than
20%. It also maintains that a large amount of the receivables to which reference is made in the E report was not recoverable
and had to be written off. In addition, a sum of SKK 10 million has to be deducted from the ‘total nominal value’ of the short-term
receivables inasmuch as that sum corresponded to a deferred tax receivable. Lastly, the applicant submits that the double
adjustment applied in recital 86 of the contested decision ‘is entirely inaccurate’.

174    As regards the liquidation factor for non-current assets and the value of the mortgaged assets, the Commission also erred
in arguing, based on the value of the pledged assets, that in bankruptcy proceedings the value of the assets is higher than
that resulting from the application of the factor of 45% used in the E report. That factor reflects the fact that interest
in the facilities in question is minimal and that they are in poor condition, obsolete or have been written off. The Commission
cannot equate the value of the pledged assets with the sums which the Slovak tax authorities could hope to gain upon the sale
of those assets in bankruptcy proceedings. Any reasonable private creditor would have known that the book value of non-current
assets is higher than the actual market value, in particular in the event of a forced sale. Moreover, the Commission has recognised
in other decisions on State aid that there is a fundamental difference between the price when assets are sold by a bankruptcy
administrator and the market price. The Commission even found in the Refractarios Especiales decision that the fact that other
creditors accepted a very significant debt remission amounted to a confirmation that a very low actual amount can be expected
in the event of bankruptcy proceedings.

175    Lastly, as regards the Commission’s decision to reject both the K report and the H report as evidence either in support or
against the applicant’s assertion that the test of a private creditor in a market economy had been satisfied, the applicant
states, as regards the K report, that the Commission neither requested the report nor sought any clarification as regards
its alleged inconsistencies with the E Report. Likewise, in dismissing the H report, the Commission failed to take account
of the fact that in bankruptcy proceedings there may be a significant period of time before debts are recovered and that,
as stated in the report, **[confidential]**. The Commission has adduced no evidence rebutting the assessment contained in the H report.

176    The Commission, supported by the intervener, disputes all the arguments raised by the applicant in support of the seventh
plea, to the extent that they seek to establish that the Commission was wrong to find that the bankruptcy procedure was more
advantageous than the arrangement procedure.

–       Findings of the Court

177    First, it is necessary to reject the applicant’s argument that, since the Commission concluded that the reports provided by
the applicant were unreliable on account of ‘specific inconsistencies’, it should have requested clarification from the applicant
of the data submitted and sought an expert opinion on the E report or on the entire arrangement, which the applicant expressly
suggested.

178    According to the case‐law, under the procedure for reviewing State aid, the role of interested parties other than the Member
State concerned is confined to providing the Commission with all the information needed to guide it with regard to its future
action (Case 70/72 *Commission* v *Germany* [1973] ECR 813, paragraph 19). Accordingly, they cannot themselves lay claim to an exchange of arguments with the Commission
such as that initiated in regard to that Member State (Case C-367/95 P *Commission*v*Sytraval and Brink’s France* [1998] ECR I-1719, paragraph 59, and *Falck and Acciaierie di Bolzano*, paragraph 49 above, paragraph 82).

179    Moreover, of the interested parties, the recipient of the aid does not play a special role pursuant to any provision governing
the procedure for the review of State aid. The procedure for the review of State aid is not a procedure initiated ‘against’
the recipient or recipients of aid by virtue of which it or they could rely on rights as extensive as the rights of the defence
as such (*Falck and Acciaierie di Bolzano*v*Commission*, paragraph 49 above, paragraph 83).

180    Lastly, as was recalled in paragraphs 49 and 50 above, the legality of the contested decision is to be assessed in the light
of the information available to the Commission when the decision was adopted and it is for the Member State concerned and,
where appropriate, the recipient of the aid to adduce evidence to show that the aid is compatible with the common market and,
if necessary, to plead specific circumstances relating to recovery of the aid already paid should the Commission require its
repayment.

181    It follows from the foregoing that the applicant is wrong to submit that the Commission’s failure to obtain clarification
constitutes a serious infringement of the Commission’s obligation diligently and impartially to investigate and to examine
the available evidence.

182    Second, the applicant’s argument that it is not legitimate to complain that the company E used data from 31 March 2004 must
be rejected as ineffective, since, as was stated in paragraph 86 above, the decision of the Tax Office to approve the arrangement
was taken on 9 July 2004. Accordingly, the Commission was only required to identify the most up‐to‐date data on 9 July 2004
in order to review whether the test of a private creditor in a market economy had been satisfied in the present case.

183    In the event, the Slovak Republic provided the Commission with data from 17 June 2004, collected during an on‐the‐spot inspection
carried out by the Slovak tax authorities on 21 June 2004, the reliability of which the applicant has not disputed. Lastly,
even if, as the applicant asserts, the E report was prepared in the course of May 2004, the applicant states itself that a
draft of that report was sent to the Slovak tax authorities at the end of June 2004 and that the final version of that report
was sent on 7 July 2004.

184    Thus, at those two points in time prior to the arrangement hearing of 9 July 2004, the applicant and consequently the company
E had in their possession the June 2004 data collected by the Slovak tax authorities on 21 June 2004 and the applicant could
not have failed to be aware that those data had in fact been collected by the services of the Tax Office. It would therefore
have been entirely possible for the applicant to establish, before 17 June 2004, itself or through the company E, a table
comparable to table 4 in the contested decision in order to assess the change in its financial situation since March 2004.

185    Third, it is necessary to reject the applicant’s argument that the Commission errs in alleging that in its report company
E used a liquidation factor for stock which was too low, namely 20%.

186    According to recital 85 of the contested decision:

‘The Commission observes that in 2004 the [applicant] was able to generate SKK [less than 150] million from the sale of its
stocks ... This is more that [40-50]% of the book value of stocks on which [company E] based its assessment. This strongly suggests
that the liquidation factor of 20% was too low. The changes in the balance sheet in 2004 with regard to stocks supports this
conclusion. In addition, the [applicant] itself in its business plan estimated the yield from the sale of stocks over the
period March-May 2004 to be SKK [less than 110] million ... [The company E] ignored this estimate. Finally, from the nature
of the [applicant’s] activities it can be assumed that the stocks comprised final products that could have been easily sold
direct to distributors or consumers, rather than semi-finished products requiring further processing.’

187    Furthermore, as was observed in paragraph 119 above, the book value of the applicant’s stock had diminished by SKK 125 million,
that is to say a reduction of 60% in comparison with the stock which existed in March 2004. Accordingly, in addition to the
two other items set out by the Commission in recital 85 of the contested decision, the Commission possessed information which
was sufficiently reliable and consistent to call in question the liquidation factor of 20% used by the company E for the applicant’s
stock in respect of the March 2004 data.

188    Fourth, the applicant’s complaints regarding short-term receivables must be rejected. First of all, contrary to the applicant’s
assertion, it is not apparent from the E report that its author had estimated that the ‘proceeds’ for those receivables would
be higher than 20%. That complaint therefore has no factual basis. Next, the applicant claims that the double adjustment applied
in recital 86 of the contested decision ‘is entirely inaccurate’. Since that complaint is in no way substantiated by the applicant,
it must be rejected as inadmissible. Lastly, the same applies as regards the applicant’s assertions that (i) a large amount
of the receivables to which company E refers in its report was not recoverable and had to be written off and (ii) a sum of
SKK 10 million had to be deducted from the ‘total nominal value’ of the short-term receivables inasmuch as that sum corresponded
to a deferred tax receivable.

189    Fifth, as regards the applicant’s argument that, concerning the liquidation factor for non-current assets and the value of
the mortgaged assets, the Commission argued that, based on the value of the pledged assets, in bankruptcy proceedings the
value of the assets is higher than that resulting from the application of the factor of 45% used in the E report, recital
87 of the contested decision states as follows:

‘Furthermore, the liquidation factor of 45% for non-current assets seems to be too low. According to the [applicant], the
value of its assets pledged in favour of the tax office was SKK 194 million. This value is, according to the [applicant],
expressed in prices estimated by independent experts at around the end of 2003/beginning of 2004. In the Commission’s view,
such an “expert price” should normally reflect the general price of the asset, expressing the price at which the asset could
be sold at the time. [The company E] does not provide any clarification as to why the yield from the bankruptcy sale of the
non-current assets would generate only 45% of their book value of SKK 205 million whereas the [applicant] himself valued these
assets much higher.’

190    Moreover, as the Commission maintains in its pleadings, it is not apparent either from the E report or from the material in
the file that the facilities constituting the non‐current assets were in poor condition, obsolete or written off. Similarly,
the applicant does not challenge the argument, advanced by the Commission both in recital 87 of the contested decision and
in its pleadings, that the value of pledged assets should normally reflect the general price of assets, expressing their market
value. In this respect, it should be added that a creditor, such as the Slovak tax authorities, even if preferential, will,
as a rule, take care to ensure that the value of its securities corresponds at least to the market value of the assets to
which those securities relate. Although, as the applicant suggests, it was not necessary to take account of the market price
in the present case, the applicant was required to provide the Commission with information in this respect. However, the applicant
merely refers to the behaviour of a reasonable creditor, without even taking into account the fact that its principal creditor
was a creditor with a preferential claim over a part of its non‐current assets. Such a preferential creditor will inevitably
assess its chances of recovering the sums due to it by taking account of the extent of the priority of its claims.

191    Lastly, sixth, the applicant’s argument that the Commission was wrong to dismiss both the K report and the H report as evidence
in support of the applicant's assertion that the test of a private creditor in a market economy had been satisfied in the
present case must be rejected as ineffective. Contrary to the applicant’s assertion, and as the Court has already observed,
the Commission was not required either to request the K report or to seek any clarification as regards its alleged inconsistencies
with the E Report. As regards the applicant’s complaints concerning the Commission’s assessment of the H report data in relation
to the bankruptcy procedure, it is apparent from the findings made in paragraph 124 above that those complaints are unfounded.

192    It follows from all the foregoing that, to the extent that it seeks to establish that the Commission was wrong to find that
the bankruptcy procedure was more advantageous than the arrangement procedure, the seventh plea must be rejected as unfounded.

The arguments put forward in the eighth plea, in so far as they concern the bankruptcy procedure

–       Arguments of the parties

193    The applicant maintains that the Commission’s assessment of the issues in this case has been impaired by the weight which
it has given to the fact that the Slovak Republic contested the arrangement procedure before a national court and to the internal
differences within the Slovak tax authorities. While these factors have had an unfairly prejudicial impact on its assessment,
the Commission has had no regard to the outcome of the national litigation initiated by the Slovak Republic before that national
court. The Commission chose to ignore all and any of the evidence submitted by the applicant and merely adopted as its own,
without critically assessing them, the unsubstantiated claims of the Slovak Republic and statements which are uncorroborated
by the facts. The Commission had been informed that key elements of the Slovak authorities’ case had been proved wrong by
the Slovak courts. Likewise some statements, such as the statement that Old Herold was a potential purchaser of the applicant’s
production assets, are erroneous. Old Herold would have had no interest in acquiring the production assets. According to the
applicant, Old Herold had unused capacity in its Trenčin (Slovakia) manufacturing facility, which is evidenced by the fact
that during the period from April to September 2004 that company was able to distil all the products belonging to the Frucona
brand in Trenčin without having to scale down its own production. The Commission’s ‘uncritical reliance’ on the statements
of the Slovak Republic constitutes a manifest error of assessment.

194    More specifically, the applicant alleges that the Commission used the letters of 15 January and 6 July 2004 as evidence in
order to prove that the Slovak authorities were not in favour of the applicant’s arrangement. It is apparent from the judgment
of the Špeciálny súd v Pezinku of 6 March 2006 that the Slovak Tax Headquarters did not observe the principle that local tax
offices are autonomous in their decision-making. Likewise, it is apparent from the decisions of the Najvyšší súd Slovenskej
republiky of 25 October 2004 and 27 April 2006 that the Slovak tax authorities were properly represented at the arrangement
hearing of 9 July 2004. The applicant adds that, in so far as State aid is an objective concept and it is not for the Commission
to decide on internal differences of the authorities – which undeniably exist in the present case – the Commission should
only have taken into consideration the test of a private investor in a market economy. However, the Commission chose to ignore
the fact that the director of the Tax Office who had approved the arrangement had been acquitted by the Špeciálny súd v Pezinku
of all charges against him. In its judgment, that national court found (i) that that director had acted within his competencies
and had properly defended the interests of the Slovak Republic when agreeing to the arrangement and (ii) that, contrary to
the prosecutor’s claim, the Slovak tax authorities could not have ‘immediately settled’ for the amount of SKK 308 million
of the applicant’s current assets, the amount relied on by the Commission in recital 97 of the contested decision. According
to the applicant, the Špeciálny súd v Pezinku thus found that that amount of SKK 308 million was too high. In addition, the
applicant observes that the national court found that the letters of 15 January and 6 July 2004 (on which the Commission relies
in recital 101 of the contested decision) were not binding. Following an appeal brought before the Najvyšší súd Slovenskej
republiky against the judgment of the Špeciálny súd v Pezinku, the Najvyšší súd Slovenskej republiky referred the case back
to the Špeciálny súd v Pezinku and requested that it gather more evidence. In September 2006, the Špeciálny súd v Pezinku
commissioned a report to evaluate the findings of the E report and that report was submitted to it in December 2006.

195    The Commission disputes all the arguments raised by the applicant in support of the eighth plea, to the extent that they seek
to establish that the Commission was wrong to find that the bankruptcy procedure was more advantageous than the arrangement
procedure.

–       Findings of the Court

196    First, it should be borne in mind that, in the light of the circumstances of the present case referred to in paragraph 114
above, the test of a private creditor in a market economy was alone applicable in the present case. The applicant is therefore
wrong to submit that the Commission should only have taken into consideration the test of a private investor in a market economy.

197    Second, as was observed in paragraph 83 above, the fact that the Špeciálny súd v Pezinku held that the letters of 15 January
and 6 July 2004 had no binding effect and, accordingly, that they constituted mere recommendations, cannot prevent the Commission
from finding in the present case that, in those two letters, reference was made to the Slovak Tax Directorate’s opposition
not only to the applicant’s proposed arrangement, but also to any tax remission in the Slovak Republic.

198    Third, as regards the applicant’s argument that the Commission was wrong to find that Old Herold was a potential purchaser
of the applicant’s production assets, it is apparent from the material in the file that Old Herold was manifestly interested
in both the applicant’s short‐term assets, in the case of the stock, and in its more or less long‐term assets, in the case
of the non-current assets. Since, at the time when it adopted the contested decision, the Commission had no other information,
it cannot be criticised for finding that the fact that Old Herold agreed to lease the tools of production from the applicant
after the applicant had lost its licence for the production and processing of alcohol and spirits revealed, in itself, not
only that those leased assets were operational, but also that Old Herold was interested in the prospect of being able to have
those tools of production at its disposal. In any event, even if, as the applicant submits, Old Herold might have had unused
capacity in its Trenčin manufacturing facility, that does not rule out the possibility that Old Herold might have wished to
develop its activities on the alcohol and spirits market in order to strengthen its cooperation with the applicant, especially
as the applicant was responsible, in accordance with their cooperation agreement, for distributing Old Herold’s alcohol and
spirit products. It follows from the foregoing considerations that that argument must be rejected as unfounded.

199    Fourth, the applicant is also wrong to claim that, in the light of the judgment of the Špeciálny súd v Pezinku of 6 March
2006, the Commission should have found that the amount of SKK 308 million, on which the Commission relied, was too high. It
is apparent from that judgment that the Špeciálny súd v Pezinku found merely that, in so far as the amount of the secured
claims was SKK 200 million, it was not possible to claim that the sum of SKK 308 million could have been recovered immediately.

200    Moreover, it is apparent from the judgment of the Špeciálny súd v Pezinku of 6 March 2006 that that national court confirms
approximately (namely approximately SKK 200 million) the applicant’s assessment (namely SKK 194 million) of the value of the
applicant’s assets pledged in favour of the Slovak authorities. Accordingly, as already stated in paragraph 162 above, in
so far as the Commission took care in the contested decision to find that the amount of the secured claims was at least equal
to the applicant’s assessment (and not to the Slovak Republic’s assessment, namely SKK 397 million), it cannot be alleged
that the Commission ignored the information that the applicant provided to it in this respect.

201    In conclusion, to the extent that it seeks to establish that the Commission was wrong to find that the bankruptcy procedure
was more advantageous than the arrangement procedure, the eighth plea must be rejected as unfounded.

The arguments put forward in the ninth plea, in so far as they concern the bankruptcy procedure

–       Arguments of the parties

202    The applicant alleges that the Commission did not provide an adequate statement of reasons for the contested decision.

203    More specifically, the Commission failed to explain its reasoning in a number of respects. First, the applicant does not deny
that the Slovak tax authorities, as a preferential creditor, were in a legally more advantageous position than that of its
other creditors, but it argues that the Commission did not explain the reasons why it claimed that the Slovak tax authorities
were in a more advantageous economic position than that of the applicant’s other creditors. Second, the applicant submits
that it is not clear ‘what purpose [recital] 100 et seq. ... of the contested decision serve in relation to the Commission’s
finding of State aid’.

204    The Commission disputes all the arguments raised by the applicant in support of the ninth plea.

–       Findings of the Court

205    As regards the applicant’s argument that the Commission did not give any explanation for its assertion that the Slovak tax
authorities were in an economically more advantageous position than that of its other creditors, it should be noted that,
in recital 74 of the contested decision, the Commission stated as follows:

‘However, prior to the arrangement, the tax office was in a legally and economically more advantageous position than [that
of] the creditors before the arrangement. It therefore needs to be examined in detail whether the tax office used all the
means at its disposal to obtain the highest possible repayment of its receivables, as a market economy creditor would do.’

206    It is true that the Commission’s assertion regarding the more advantageous economic and legal situation of the Slovak tax
authorities is not clearly substantiated in the contested decision.

207    However, that finding cannot have any effect whatsoever on the legality of the contested decision. The applicant does not
contest either the legal status of the Tax Office, namely that of a preferential creditor, or the more advantageous consequences
connected with that status under the provisions of the Slovak legislation in force at the material time as compared with the
applicant’s other creditors. As the Commission maintains in its pleadings, in the present case, the legal advantage of the
Tax Office as a preferential creditor also constituted an economic advantage, since, in that capacity, the Tax Office was
guaranteed to be able to recover its claim with priority over the applicant’s private creditors at any time during the bankruptcy
procedure from the secured assets, the value of which was at least SKK 194 million. It is therefore necessary to reject that
first argument of the applicant as unfounded.

208    As regards the applicant’s argument that it is not clear ‘what purpose [recital] 100 et seq. ... of the contested decision serve
in relation to the Commission’s finding of State aid’, the Court observes that, in recital 78 of the contested decision, the
Commission announced the three parts of its analysis under the heading ‘State aid within the meaning of Article 87(1) [EC]’,
the third part of which was to involve an examination of the circumstantial evidence submitted by the Slovak authorities and
the applicant. In recitals 100 to 109 of the contested decision, the Commission did indeed carry out such an examination.
That argument is therefore manifestly unfounded.

209    Consequently, to the extent that it seeks to establish that the Commission was wrong to find that the bankruptcy procedure
was more advantageous than the arrangement procedure, the ninth plea must be rejected as unfounded.

210    It follows from the findings made in paragraphs 151, 168, 192, 201 and 209 above that the fourth plea must be rejected as
unfounded, as must, for the same reasons, the sixth, seventh, eighth and ninth pleas, to the extent that they are connected
with the fourth plea.

211    Lastly, in the light of the preliminary observations made in paragraphs 88 to 92 above and of the findings made in paragraphs
149 to 151 above, it is not necessary to adjudicate, for the purposes of assessing the legality of the contested decision
with regard to the classification of the measure in question as State aid for the purposes of Article 87(1) EC, on the merits
of the fifth plea, nor those of the sixth, seventh, eighth and ninth pleas to the extent that they relate to whether the Commission
was right to find that the tax execution procedure was more advantageous than the arrangement procedure.

212    The Commission was therefore right to classify the measure in question as State aid for the purposes of Article 87(1) EC.

5.     *The 10th plea: the Commission erred in fact and in law by not exempting the arrangement as restructuring aid and by retroactively
applying the 2004 Guidelines*

*Arguments of the parties*

213    The applicant claims that the Commission misapplied Article 87(3) EC and the 1999 Guidelines by not exempting the aid in question,
even though the applicant was a firm in difficulties and the arrangement was based on a restructuring plan which was limited
to the strict minimum and led to the restoration of the applicant’s long-term viability. Moreover, the Commission retroactively
applied the 2004 Guidelines, even though it admitted that the 1999 Guidelines applied. The applicant also states that the
Commission merely asserted that its viability was not restored and that the aid in question was not limited to the strict
minimum. The Commission did not examine the other criteria for classifying a measure as restructuring aid, such as the existence
of compensatory measures. Furthermore, the applicant claims that, although it is an SME, the Commission failed to have regard
to the provisions of paragraph 55 of the 1999 Guidelines, which provides that the conditions laid down in paragraphs 29 to
47 of those guidelines are to be applied less strictly to SMEs.

214    The applicant maintains, first, that, as regards the restoration of its long‐term viability, it submitted a restructuring
plan to the Krajský súd v Košiciach which included a number of measures. That plan was implemented and supervised by an administrator
appointed by the Krajský súd v Košiciach and resulted in the ‘restoration’ of the applicant’s viability without further government
intervention. Moreover, the Commission should have taken into consideration that that plan was drafted and submitted to the
Krajský súd v Košiciach prior to the accession of the Slovak Republic and thus it was not possible for the Slovak Republic
to notify it. The applicant submits that if the absence of a restructuring plan in the form required by the Commission automatically
led to the incompatibility of a measure, a new Member State of the European Union would be barred from applying or implementing
any restructuring measure before its accession, even if all other criteria were fulfilled. Such a policy would violate Article
12 EC.

215    Secondly, the applicant submits that its long‐term viability has been restored. It maintains that, contrary to what the Commission
states in the contested decision, the restructuring of its distillery activities and its cooperation with Old Herold has been
key to that success. In so far as its financial difficulties stemmed from the conditions for the payment of excise duty in
respect of its distillery activities, the applicant submits that it has avoided a recurrence of such difficulties by no longer
distilling. In addition, the Commission’s argument that the applicant could re-apply for a licence for the production and
processing of alcohol and spirits must be rejected since the applicant has not re‐applied for such a licence and does not
intend to do so. It has thus left the very market on which the measure in question is said to distort competition.

216    As regards whether the aid was limited to the strict minimum, the Commission argues (i) that the Slovak Republic should not
have agreed, in respect of the arrangement, to the applicant's repaying an amount lower than 35.84% of the debt and (ii) that
the applicant’s own contribution was too low. The applicant maintains that a higher return rate would have jeopardised the
‘viability of the arrangement’. The applicant states that, since it could not secure a bank loan, the funds raised, a total
of SKK 231 million, in order to finance its liabilities resulting from the arrangement were obtained by other means. The supplier
loan of SKK **[confidential]** provided by Old Herold was one of those means. The Commission misunderstood the concept of that loan. The amount of that
loan was not paid out to the applicant but its maturity was merely postponed to enable the applicant to accumulate cash. In
its decision of 27 April 2006, the Najvyšší súd Slovenskej republiky confirmed that the amount of liquid assets available
to the applicant post-arrangement was the minimum necessary to ensure its continued existence. The applicant maintains that
it has no surplus cash and that there was no distortion of competition on the market in question after July 2004.

217    As regards the Commission’s assessment of the applicant’s own contribution to the restructuring, the applicant claims that
the Commission made a manifest error of assessment in taking the view that the loan provided to it by Old Herold did not constitute
such a contribution on the ground that a maturity of 40 days can be viewed as common practice. In this respect, the applicant
maintains that the granting of such a maturity period during the arrangement procedure exceeded ‘common business practice’
and therefore constitutes a restructuring measure. In its submission, a supplier which, unlike Old Herold, has no ‘long-term
financial interest in [the applicant]’ would not have delivered goods to it without requesting payment in advance or other
securities. Moreover, it is apparent from the Commission’s previous practice that it has in the past considered 35% to be
sufficient in terms of the beneficiary’s contribution to the restructuring plan.

218    Thirdly, and lastly, the applicant claims that the Commission applied the 2004 Guidelines retroactively by relying on the
new threshold for participation contained in those guidelines. Such a retroactive application in itself constitutes sufficient
grounds for annulment. In any event, in applying the new threshold in the 2004 Guidelines, the Commission should also have
had regard to the fact that those guidelines provide that, in assisted areas such as the region in which Košice was located,
the conditions for assessing the level of the applicant’s own contribution may be less stringent.

219    The Commission, supported by the intervener, disputes all the arguments raised by the applicant in support of the 10th plea.

*Findings of the Court*

220    It should be noted as a preliminary point, first, that, with respect to the applicant’s argument alleging infringement of
Article 12 EC, the applicant does not state at any point to what extent that provision, which relates to the prohibition on
discrimination, might have been infringed in the present case. Accordingly, it is necessary, in the light of the provisions
of Article 44(1)(c) of the Rules of Procedure, to reject it as manifestly inadmissible.

221    Second, the Court would point out that the applicant’s assertion that the Commission applied the 2004 Guidelines retroactively
is unfounded. It is explicit from numerous recitals of the contested decision, and particularly from recitals 116 to 118 and
120 to 136 thereof, that the Commission not only found that the 1999 Guidelines applied in the instant case, but also examined
the compatibility of the measure in question with those guidelines. Moreover, although the Commission did in fact mention
in recital 152 of the contested decision, by reference to footnote 36 thereof, the threshold of 40% for the applicant’s own
contribution contained in the 2004 Guidelines, that reference cannot substantiate the applicant’s assertion that those guidelines
were applied retroactively in the contested decision. It must be stated that that reference was made only to illustrate the
Commission’s finding that its practice in applying the 1999 Guidelines and the trend in Commission policy with respect to
the criterion of limiting the amount and intensity of the aid to the strict minimum ‘[led] to the introduction of thresholds
under the 2004 [G]uidelines’. Furthermore, as is clear from the second sentence of recital 152 of the contested decision,
the Commission expressly stated that the applicant’s own contribution of less than 27% ‘might be accepted under the 1999 [G]uidelines
only if all the other conditions for approving the aid were fulfilled’. The Court therefore finds that the Commission applied
the 1999 Guidelines and that, accordingly, the applicant’s argument that the 2004 Guidelines were applied retroactively must
be rejected as unfounded.

222    Third, the applicant is equally wrong to submit that the Commission failed to have regard to the provisions of paragraph 55
of the 1999 Guidelines, which relate to the conditions of application of those guidelines to SMEs. In fact, in recital 119
of the contested decision, the Commission found that the applicant was a ‘medium-sized company’ within the meaning of European
Union legislation. Moreover, in recital 129 of the contested decision, the Commission stated that, for SMEs, the 1999 Guidelines
stipulated that the conditions for authorising aid may be less stringent as regards the implementation of compensatory measures
and the content of monitoring reports. The Commission went on to state, in the second sentence of that recital, that ‘[n]onetheless,
these factors do not exempt such companies from the requirement to draw up a restructuring plan or the Member States from
the obligation to make the granting of the restructuring aid conditional upon implementation of a restructuring plan’. It
follows from the foregoing that the applicant’s argument that the Commission failed to have regard to the provisions of paragraph
55 of the 1999 Guidelines must be rejected as unfounded.

223    Fourth, it is apparent from recital 2 of the contested decision that, in its letter of 4 January 2005, the Slovak Republic
expressly asked the Commission to approve the measure in question as rescue aid to a company in financial difficulties.

224    Primarily, it should be noted that the applicant essentially contests the Commission’s finding that the measure in question
was not compatible with the common market in the light of the 1999 Guidelines.

225    In the first place, it must be borne in mind that, pursuant to Article 87(3)(c) EC, ‘aid to facilitate the development of
certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an
extent contrary to the common interest’ may be considered to be compatible with the common market.

226    Moreover, in accordance with settled case-law, Article 87(3) EC confers on the Commission a wide discretion to allow aid by
way of derogation from the general prohibition laid down in Article 87(1) EC, since the determination in such a case of the
question whether State aid is or is not compatible with the common market raises problems which presuppose the examination
and appraisal of complex economic facts and conditions which may be liable to change rapidly (see Case C‐39/94 *SFEI and Others* [1996] ECR I‐3547, paragraph 36 and the case-law cited). Since it is not for the Courts of the European Union to substitute
their own assessment of the facts, particularly the economic circumstances, for that of the author of the decision, the Court
must, in such a context, confine its review to determining whether the Commission complied with the rules governing procedure
and the provision of the statement of reasons, whether the facts are accurately stated and whether there has been any manifest
error of assessment or misuse of powers (Case T‐126/99 *Graphischer Maschinenbau*v*Commission* [2002] ECR II‐2427, paragraph 32, and Case T‐137/02 *Pollmeier Malchow*v*Commission* [2004] ECR II‐3541, paragraph 52).

227    Furthermore, in accordance with settled case-law, the legality of a measure falls to be assessed on the basis of the elements
of fact and of law existing at the time when the measure was adopted and the complex assessments made by the Commission must
be examined solely on the basis of the information available to it at the time when those assessments were made (Case T‐123/97
*Salomon*v*Commission* [1999] ECR II‐2925, paragraph 48, and *Graphischer Maschinenbau*v*Commission*, paragraph 226 above, paragraph 33).

228    In addition, the Commission may adopt a policy as to how it will exercise its discretion in the form of measures such as the
guidelines in question, in so far as those measures contain rules indicating the approach which the institution is to take
and do not depart from the rules of the Treaty (see Case C‐278/00 *Greece*v*Commission* [2004] ECR I‐3997, paragraph 98 and the case-law cited).

229    Lastly, in the absence of a credible restructuring plan, the Commission is justified in refusing to authorise the aid in question
under the 1999 Guidelines (see, to that effect and by analogy, Case C‐17/99 *France*v*Commission* [2001] ECR I‐2481, paragraphs 44 to 49).

230    In the present case, the Commission examined the aid granted to the applicant in the light of the 1999 Guidelines, which define
the criteria to be used in the evaluation of the compatibility of aid for restructuring firms in difficulty.

231    As is clear from paragraph 31 of the 1999 Guidelines, in order to be declared compatible with Article 87(3)(c) EC, individual
aid to undertakings in difficulty must be bound to a restructuring programme which has been endorsed by the Commission. Moreover,
under paragraphs 32 to 40 of the 1999 Guidelines, the restructuring plan, the duration of which must be as short as possible,
must inter alia restore the long‐term viability of the firm within a reasonable timescale and on the basis of realistic assumptions
as to future operating conditions, whilst limiting the amount and intensity of the aid to the strict minimum. In addition,
in accordance with paragraphs 43 and 45 of the 1999 Guidelines, the company concerned must fully implement the restructuring
plan as accepted by the Commission. That implementation and the satisfactory progress of the plan must be monitored by the
Commission, to which detailed annual reports must be submitted. It is therefore necessary to ascertain whether those requirements
were complied with in the present case.

232    In the second place, in the present case, it is apparent from the contested decision that, in finding that the conditions
laid down in the 1999 Guidelines had not been fulfilled, the Commission relied on the fact that there was no restructuring
plan and on the fact that the measure in question was not limited to the strict minimum.

233    First, as regards the finding made by the Commission that there was no ‘restructuring plan’ for the purposes of the 1999 Guidelines,
the applicant claims (i) that it submitted a restructuring plan to the Krajský súd v Košiciach which included a number of
restructuring measures, (ii) that that plan was implemented and supervised by an administrator appointed by the Krajský súd
v Košiciach and (iii) that the Commission failed to have regard to that plan.

234    However, nothing in the file indicates that, on the date on which the aid in question was granted, the Slovak authorities
actually had at their disposal a restructuring plan consistent with the requirements set out in paragraph 231 above which
could be submitted to the Commission.

235    In fact, it is apparent from the material in the file that, in its letter of 20 October 2004, the Tax Office had pointed out
to the applicant that the debt remission approved by the Tax Office constituted aid, which had to be approved by the Commission,
and that the Tax Office had therefore asked the applicant to provide it with an investment plan within approximately one month.
In its letter of 9 November 2004, the applicant not only contested the classification of the measure in question as State
aid for the purposes of Article 87(1) EC, but also formally refused to supply the investment plan requested by the Tax Office
with a view to seeking the Commission’s approval of the aid in question.

236    In addition contrary to the applicant’s submission, in the contested decision the Commission clearly took account of the business
plan submitted by the applicant in the arrangement procedure. Thus, in recitals 52 and 81 of the contested decision, the Commission
expressly referred to that business plan and, in paragraphs 130 to 141 of the contested decision (which appear under the part
dealing with the Commission’s examination of the compatibility of the measure in question), it assessed both formally and
substantively whether that business plan could be classified as a ‘restructuring plan’ for the purposes of the 1999 Guidelines.
In this respect, in recital 141 of the contested decision, the Commission stated that ‘[t]he combination of the absence of
a formal restructuring plan and of a genuine analysis of the difficulties, the measures necessary to address these difficulties
and the market conditions and prospects leads the Commission to the conclusion that the business plan submitted by the beneficiary
is not a genuine restructuring plan as required by the 1999 guidelines’. It therefore concluded that its doubts that the applicant
would restore long-term viability had not been ‘allayed’.

237    Although, in the contested decision, the Commission thus clearly took account of and examined the business plan submitted
by the applicant in the arrangement procedure, it must be pointed out that, in its pleadings, the applicant merely states
that the business plan that it submitted to the Krajský súd v Košiciach contained a number of restructuring measures, had
been implemented and supervised by an administrator appointed by the Krajský súd v Košiciach and had resulted in the restoration
of the applicant’s viability without further government intervention.

238    Accordingly, the Court would point out that the applicant does not put forward any argument capable of calling in question
all the considerations set out by the Commission in recitals 130 to 141 of the contested decision by reason of which it concluded
that, both formally and substantively, that business plan does not constitute a ‘restructuring plan’ for the purposes of the
1999 Guidelines.

239    Lastly, the applicant is equally wrong to submit that the Commission should have taken into consideration that that plan was
drafted and submitted to the Krajský súd v Košiciach prior to the accession of the Slovak Republic and thus it was not possible
for the Slovak Republic to notify it. That argument is based on the incorrect premiss that since the measure in question was
granted prior to the accession of the Slovak Republic, the obligation of notification prior to its implementation as referred
to in Article 88(3) EC did not apply. However, as was found in paragraph 86 above, it is only from the point in time that
the Tax Office formally approved the proposed arrangement, namely on 9 July 2004, that that office took its decision to waive
65% of its claims over the applicant. It was therefore after the accession of the Slovak Republic that the legally binding
act was adopted by which the Slovak authorities undertook to partially write off the applicant’s tax debt in the context of
an arrangement. Accordingly, the obligation of prior notification under Article 88(3) EC applied to the measure in question,
in accordance with the procedural and substantive rules applicable as at 9 July 2004. As was recalled in paragraph 231 above,
an aid measure such as the measure in question in the present case had to be bound to a restructuring programme for the purposes
of the 1999 Guidelines.

240    It follows from all of the foregoing considerations that the applicant has not established that the Commission made a manifest
error of assessment when concluding, in recital 141 of the contested decision, that the business plan submitted by the applicant
was not a restructuring plan for the purposes of the 1999 Guidelines.

241    In accordance with the case‐law recalled in paragraph 229 above, as the Commission observed in recital 142 of the contested
decision, in the absence of a credible restructuring plan, the Commission was justified in refusing to authorise the aid in
question under the 1999 Guidelines.

242    Second, it is apparent from recital 142 of the contested decision that the Commission took care to examine also the requirement
that the amount and intensity of the aid be limited to the strict minimum, as provided for in paragraph 40 of the 1999 Guidelines.
It is therefore necessary to examine, for the sake of completeness, the applicant’s arguments in support of the 10th plea,
in so far as they seek to show that the Commission was wrong to find that the measure in question did not satisfy that requirement.

243    In this respect, the applicant does not dispute that, under the 1999 Guidelines, beneficiaries must normally make a substantial
contribution to the restructuring through their own resources or through external financing secured under market conditions.

244    However, the parties disagree on whether the postponement of payment dates granted to the applicant by Old Herold constitutes
an own contribution by the applicant to its restructuring plan.

245    As the Commission stated in recitals 147 to 149 of the contested decision, the postponement of payment dates that Old Herold
had granted to the applicant cannot be considered to be a contribution from external resources and, in particular, from a
creditor that believed that the applicant would be restored to viability. It is sufficient to note that, at the meeting on
28 March 2006 between the Commission and the applicant, the applicant expressly stated that the ‘supplier loan’ had been granted
to it by Old Herold during the second half of 2004 and that the standard period for payment of sums due was between 14 and
60 days. Accordingly, the Commission was correct to find in recital 148 of the contested decision that the period of 40 days
granted to it by the Old Harold was a standard practice, in any event in the light of the standard period of between 14 and
60 days, communicated by the applicant itself, and that, therefore, that maturity period did not constitute a contribution
to restructuring from external resources.

246    It follows from the above that the applicant has not established that the Commission’s assessments regarding the proportionality
of the measure in question to the cost of the restructuring were manifestly wrong.

247    Consequently, the Commission was justified in finding that the conditions laid down in the 1999 Guidelines were not fulfilled
and, therefore, in declaring the measure in question incompatible with the EC Treaty.

248    It follows that the 10th plea must be rejected in its entirety as unfounded.

249    It follows from all the findings made in paragraphs 54, 61, 87, 210, 211 and 248 above that all the pleas raised in support
of this action must be rejected, and that the action must therefore be dismissed in its entirety.

**Costs**

250    Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been
applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the
costs, in accordance with the forms of order sought by the Commission and the intervener.

On those grounds,

THE GENERAL COURT (Second Chamber)

hereby:

1.      **Dismisses the action;**

2.      **Orders Frucona Košice a.s. to pay the costs.**

| Pelikánová | Jürimäe | Soldevila Fragoso |
| ---------- | ------- | ----------------- |

Delivered in open court in Luxembourg on 7 December 2010.

[Signatures]

Table of contents

Legal context

1.  Community legislation

2.  National legislation

Background to the dispute

1.  The applicant

2.  National administrative and judicial procedures

3.  Administrative procedure before the Commission

Procedure and forms of order sought

Substance

1.  The first plea: manifest error in the assessment of the amount of the aid measure in question

Arguments of the parties

Findings of the Court

2.  The second plea: infringement of an essential procedural requirement and of Article 33 EC

Arguments of the parties

Findings of the Court

3.  The third plea: infringement of Section 3 of Annex IV to the Treaty of Accession, Article 253 EC, Article 88 EC and Regulation
(EC) No 659/1999 inasmuch as the Commission lacked the competence to adopt the contested decision

Arguments of the parties

Findings of the Court

4.  The fourth, fifth, sixth, seventh, eighth and ninth pleas, alleging, in essence, errors of law and fact in relation to
the classification of the measure in question as State aid for the purposes of Article 87(1) EC

Preliminary observations

The legality of the contested decision, inasmuch as the Commission found the bankruptcy procedure to be more advantageous
than the arrangement procedure

The arguments expounded in the fourth plea

–  Arguments of the parties

–  Findings of the Court

The arguments put forward in the sixth plea, in so far as they concern the bankruptcy procedure

–  Arguments of the parties

–  Findings of the Court

The arguments put forward in the seventh plea, in so far as they concern the bankruptcy procedure

–  Arguments of the parties

–  Findings of the Court

The arguments put forward in the eighth plea, in so far as they concern the bankruptcy procedure

–  Arguments of the parties

–  Findings of the Court

The arguments put forward in the ninth plea, in so far as they concern the bankruptcy procedure

–  Arguments of the parties

–  Findings of the Court

5.  The 10th plea: the Commission erred in fact and in law by not exempting the arrangement as restructuring aid and by retroactively
applying the 2004 Guidelines

Arguments of the parties

Findings of the Court

Costs

---

- Language of the case: English.