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Corporate law Intra-enterprise liability

Corporate law Intra-enterprise liability. Latin American Law. Last updated 30 Nov 09. Who is …. Today’s topics. Protection of foreign investment Separation of assets / liability Disregard of separate incorporation Intra-enterprise liability: piercing factors

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Corporate law Intra-enterprise liability

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  1. Corporate lawIntra-enterprise liability Latin American Law Last updated 30 Nov 09

  2. Who is …

  3. Today’s topics • Protection of foreign investment • Separation of assets / liability • Disregard of separate incorporation • Intra-enterprise liability: piercing factors • Joint/several or secondary liability • Administration of insolvent company • Public policy grounds • Use of foreign group’s assets • Confiscation? … effectively raised serious questions about the validity of constitutional protections of economic activity, the proper role of government in business and society, and more broadly, the ideas of separation of powers and stare decisis. Michael Lennox

  4. “unified socio-economic unit” … Juan Peron “The idea that ‘the public interest’ supersedes private interests and rights can have but one meaning: that the interests and rights of some individuals take precedence over the interests and rights of others.”

  5. Value of knowing other legal systems • Model for borrowing • Gain perspective • Discover truths • Impose / power Lat Am vs multinationals … why? Stephanie Richeter / Dave Cardamone / Jeff Servas

  6. In re DeltecArgentina Supreme Court (1973)

  7. Multinational Corporation Shareholders Holding Company Lat Am Europe US Mexico Argentina Holding Colombia Operating Export

  8. Multinational Corporation Shareholders Holding Company Lat Am Europe US • Assets = $36.8 • Liabilities = $52 • Government creditor = $23 • Private creditors = $18 • Intracorporate = $11 Mexico Argentina Holding Colombia Operating Export

  9. “unified socio-economic unit” … Juan Peron “The idea that ‘the public interest’ supersedes private interests and rights can have but one meaning: that the interests and rights of some individuals take precedence over the interests and rights of others.”

  10. The change of vote from unconstitutional in Carter Coal to constitutional in West Coast Hotel by Justice Owen Roberts has been called “the switch in time that saved nine.” Jeff Servas

  11. How does “scope of group” relate to capitalism …

  12. Multinational Corporation Shareholders Holding Company Lat Am Europe US Mexico Argentina Holding Colombia Operating Export

  13. Multinational Corporation Shareholders Holding Company Lat Am Europe US Mexico Argentina Holding Colombia Operating Export

  14. Multinational Corporation Shareholders Holding Company Lat Am Europe US Mexico Argentina Holding Colombia Operating Export

  15. Multinational Corporation Shareholders Holding Company Lat Am Europe US Mexico Argentina Holding Colombia Operating Export

  16. Multinational Corporation Shareholders Holding Company Lat Am Europe US Mexico Argentina Holding Colombia Operating Export

  17. Multinational Corporation Shareholders Holding Company Lat Am Europe US Mexico Argentina Holding Colombia Operating Export

  18. Multinational Corporation Shareholders Holding Company Lat Am Europe US Mexico Argentina Holding Colombia Operating Export

  19. Argentina Business Organizations Act Article 54: Stockholders shall become fully liable for the obligations of the company when they use the company form to act illegally, inconsistently with the company’s stated business purpose, or to the detriment of third parties. * * * Model Business Corporation Act § 6.22(b): A shareholder of a corporation is not personally liable for the acts or debts of the corporation except that he may become personally liable by reason of his own acts or conduct. What factors in piercing?

  20. Liability of a Parent Corporation for the Obligations of an Insolvent Subsidiary Under American Case Law and Argentine Law, Hector Jose Miguens, 10 Am. Bankr. Inst. L. Rev. 217 (Spring 2002).

  21. Argentina reconsiders foreign investment …

  22. Foreign Investment Act (1973): “foreign investor liable for local company’s obligations” Foreign Investment Law (1976): transactions between foreign investor and local company “shall be considered as transactions between independent parties … when in accordance with normal business practices” What’s changed? How do investors feel?

  23. Multinational Corporation Shareholders Swift & Co Deltec Int’l Europe US Minority SHs DeltecArgentina Cia-Swift Esperanza

  24. Sacrifice property rightsin the public interest …

  25. In late 2008, the Siemens International and a host of its subsidiaries were fined over $1.6 billion in the United States under its Foreign Corrupt Practices Act (FCPA). Michael Lennox

  26. Multinational Corporation Shareholders Swift & Co. Deltec Int’l Europe US Mexico DeltecArgentina Colombia Was bankruptcy court’s administration a taking? Cia-Swift 10 others

  27. NY Court (1974): “The determination in Argentina that plaintiff is Bankrupt because it is in corporate group, where one member is insolvent, is not in conformity with American law … and may amount to a confiscation of property.” Dave Cadamone

  28. End

  29. Andean Pact, the Cartagena Agreement (1969): In addition to establishing a free trade regime, it proclaimed “one of the fundamental objectives of the common regime must be to strengthen the national enterprise.” Since the Argentineans believed that foreign companies hurt domestic companies, they handicapped foreign companies. Tim Corprew

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