BRAZIL Law and Practice Contributed by: Vitor Henriques and Gabriela Sella, Franco Leutewiler Henriques Advogados
may impact the company’s shareholders or the market. This includes details about the terms of the transaction, any significant agreements or contracts involved and potential risks or implica - tions for shareholders. The requirement to disclose transaction docu - ments in full may depend on the nature and significance of the documents, as well as any confidentiality or competitive concerns that may arise. In some cases, parties may seek to redact certain sensitive or proprietary information from transaction documents before disclosure, par - ticularly if the documents contain commercially sensitive information or trade secrets. The CVM may provide guidance or specific requirements regarding the disclosure of trans - action documents, particularly if the transaction involves complex or high-profile transactions. The CVM aims to ensure that disclosure prac - tices adhere to the principles of transparency, fairness and investor protection, while also bal - ancing the need to protect sensitive information and maintain market integrity. Overall, publicly held companies engaged in business combinations or M&A transactions in Brazil are subject to stringent disclosure require - ments established by the Brazilian Corporation Law and regulated by the CVM. Compliance with these requirements is essential to ensure trans - parency, investor confidence and regulatory compliance throughout the transaction process.
oversight aimed at ensuring transparency, fair - ness and accountability in corporate governance practices. These duties are enshrined in the Bra - zilian Corporation Law and are further reinforced by regulations established by the CVM. Directors and officers in a business combina - tion have a range of duties and responsibilities designed to protect the interests of the company and its stakeholders. They are required to exer - cise care, diligence, loyalty and transparency in the performance of their duties, which entails making informed decisions based on thorough analysis and consideration of relevant factors, while also avoiding conflicts of interest that could compromise their impartiality or judgement. The duties of directors and officers are primarily owed to the company, but, to the extent they conflict with the company’s interest, there is growing recognition of the importance of con - sidering the interests of stakeholders, including shareholders, creditors, employees and busi - ness counterparts. 8.2 Special or Ad Hoc Committees It is relatively common to establish special or ad hoc committees in business combinations, par - ticularly when conflicts of interest arise among directors and when the transaction involves anti - trust concerns, which many impose the neces - sity of forming clean teams. These committees are tasked with ensuring fairness and proper governance throughout the transaction process. 8.3 Business Judgement Rule In Brazil, the business judgement rule is not expressly set out in the legislation, although it is interpreted by the courts and doctrine as being implicit from the rationale of the fiduciary duties applicable to board members.
8. Duties of Directors 8.1 Principal Directors’ Duties
In Brazil, directors and officers engaged in a business combination are subject to a robust framework of legal obligations and regulatory
299 CHAMBERS.COM
Powered by FlippingBook