Challenge to the suspension of the board (art. 350 LGS)
Article 350 of the General Companies Law allows the suspended board of directors to bring an action within ten days to prove the inaccuracy of the trustee's grounds.
What article 350
Article 350 governs the defense of the board of directors suspended by the trustee.
The suspended board of directors may bring an action within a term of ten (10) days from notification, to prove the inaccuracy of the grounds alleged by the trustee. Once the action is brought, the liquidation may not be resolved until there is a final judgment; in the meantime the trustee shall limit itself to acts of conservation and ordinary administration.
Source: Law 19.550, art. 350 — InfoLEG (updated official text)
Commentary
It gives the board a means of defense against a suspension it considers unfounded: if it brings an action, the liquidation is halted until judgment, and the trustee only conserves. It balances the trustee's power with judicial control.
Do you need advice on this matter?
The firm is headquartered in Buenos Aires, Argentina, and advises clients worldwide.
Contact the firm