Liquidation by the trustee (floating security) (art. 348 LGS)
Article 348 of the General Companies Law governs liquidation by the trustee in debentures with floating security: it realizes the assets and distributes among the debenture holders.
What article 348
Article 348 establishes the liquidation by the trustee under floating security.
If the debentures were issued with floating security, once liquidation has been resolved, the trustee shall proceed to realize the assets that constitute the security and to distribute their proceeds among the debenture holders, after the claims with better privilege have been paid. Once the debt for principal and interest has been satisfied, the remainder shall be delivered to the company.
Source: Law 19.550, art. 348 — InfoLEG (updated official text)
Commentary
The trustee liquidates the charged assets and pays the debenture holders (after the higher privileges); whatever remains returns to the company. It is an orderly collective enforcement of the security.
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