GUATEMALA Law and Practice Contributed by: Ignacio Andrade Aycinena, Alejandro Solares Solares, Claudia Pontaza Rubio and Lester Meda Ruano, Lex Atlas
9.4 Directors’ Duties The directors hold the same liability and duties when enacting defensive measures as when exercising their duties. Directors are not mandat - ed to transmit sales proposals to shareholders. 9.5 Directors’ Ability to “Just Say No” Directors cannot “just say no” . They are sub - ject to the decision of the supreme authority of the company, the shareholders’ meeting or the equity partners’ meeting, and the director is obliged to comply with the resolution taken by this authority. Directors do not have the author - ity to decide upon offers to purchase shares. Directors have authority, except where limited by statute, to accept or not the sales of assets. Litigation is not common in connection with M&A deals when the acquisition is for the total - ity of the shares or assets of the target. Minor - ity rights litigation is more normal when minor - ity shareholders’ rights are not protected in the deal. Arbitration is the most common manner in which M&A disputes are resolved locally and internationally. 10.2 Stage of Deal 10. Litigation 10.1 Frequency of Litigation Because the deal is not made public until final - ised, litigation comes after acquisition in most cases in which it arises. Typically, litigation is brought due to causes related to the price or the condition of the target and its contingencies,
Arbitrations have been conducted on issues such as electricity and regulated matters.
11. Activism 11.1 Shareholder Activism
Shareholder activism is a force upon the infringe - ment of minority rights as a root cause. Due to the shareholding structure, it is not an important force. Shareholding tends to behave in certain entities as a dividend provision scheme in cases of utilities and other entities, in some cases with employee share participation, and the driving force is when dividends are not distributed. Social activism does exist in Guatemala, espe - cially in the mining, hydroelectric and telecom - munications industries. The activism is referred to as the implementation of the ILO 169 Con - vention. 11.2 Aims of Activists Shareholder activism does not seek any of the above-stated results. Social activism seeks major divestitures and even the close of operat - ing businesses, which even cause capital flights. Social activism was affected during the pandem - ic, due to different factors, such as limited hours and transportation, and the informal economy was not supported with the loans granted by the government. On the other hand, cybernetic activism arose. 11.3 Interference With Completion Activists do seek to interfere with the completion of announced transactions, especially the M&A transactions in the mining, hydroelectric and tel - ecommunications industries.
which are found after acquisition. 10.3 “Broken-Deal” Disputes
Litigation has been menaced in broken deals within the region, in cases in which deals have been made subject to US jurisdiction.
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