ARGENTINA Law and Practice Contributed by: Agustin Ferrari, Hernán Alal and Astrid Nottebohm, Naveira, Truffat, Martínez, Ferrari & Mallo Abogados
7.3 Producing Financial Statements Within the framework of a public tender offer, infor - mation regarding the economic and financial situation of the offeror company for the last two fiscal years must be provided to the National Securities Commis - sion and in the offer prospectus, with identification of its net worth, turnover, total assets, indebtedness, results, and express reference to any relevant quali - fication or indication contained in the external audit reports in relation thereto. It must also provide infor - mation on its financial and commercial prospects. If applicable, such information must refer not only to the offeror company but also to the financial statements of the controlling company. If the transaction is set up as a merger and/or spin- off, special merger and consolidated merger financial statements must be produced and must be filed with In the case of a public takeover bid or OPA, the docu - ments specified in 7.1 Making a Bid Public must be submitted and included in the offer prospectus. For mergers and/or spin-offs, only the final merger agreement must be submitted, including the special and consolidated financial statements for the opera - tion. the Public Registry of Commerce. 7.4 Transaction Documents In all other cases, it is not necessary to submit addi - tional transaction documents, except in specific cases where the particular industry requires it.
To be released from any such liability, a director must promptly file written objections to the corporate reso - lution which caused the damage and either give notice of it to the relevant officials or file proceedings chal - lenging the decision. In addition to civil liability (for which damages is the available remedy), criminal liability can apply where directors’ actions fall under the category of criminal offences. Civil liability is presumed once the damage arising from the directors’ decision is evidenced, unless the director proves otherwise. However, for criminal liability, the director’s guilt must be proved by the prosecutor in a criminal trial. 8.2 Special or Ad Hoc Committees It is not a standard practice to establish special or ad hoc committees in business combinations. With respect to other types of committees, an audit committee is mandatory for companies that publicly offer their shares. The creation of other types of com - mittees is commonly used in companies with widely dispersed share capital and a need for specialised bodies. They are also frequently implemented in joint ventures and other cases requiring specialised gov - ernance structures. In such cases, the purpose of these committees is to allow shareholders to main - tain some level of control over specific business units. It is worth noting that the General Corporate Law allows the bylaws of corporations to establish execu - tive committees within the Board of Directors. These committees may only be composed of Board mem - bers. However, the creation of executive committees does not alter the obligations and responsibilities of the Board members. 8.3 Business Judgement Rule Since takeovers are very rare in Argentina, there is no substantive case law with respect to the board of directors in takeover situations.
8. Duties of Directors 8.1 Principal Directors’ Duties
Directors owe a duty of loyalty to the company and its shareholders, and must act with “the due care of a good businessman”. Directors are personally and without limit liable to the company, the shareholders and third parties for mis - management, violation of the law or the bylaws, and for any other damages caused by the director’s fraud, gross negligence or abuse of authority.
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