Suspension of the board and administration by the trustee (art. 346 LGS)
Article 346 of the General Companies Law allows the judge, at the trustee's request, to suspend the board of directors and place the administration in the trustee's hands.
What article 346
Article 346 governs the suspension of the board of directors at the trustee's request.
In the cases of subsection 3 of the preceding article, the judge, at the trustee's request and without further proceedings, shall order the suspension of the board of directors and shall appoint in its place the trustee or trustees, who shall receive the administration and the corporate assets under inventory.
Source: Law 19.550, art. 346 — InfoLEG (updated official text)
Commentary
It is the strongest protective measure: in the face of serious breaches, the trustee may remove the board of directors and take over the administration, in order to preserve the assets that secure the debenture holders.
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