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OWNERSHIP OF REAL ESTATE in Buenos Aires – Argentina

The best Law firms, top Lawyers, Attorneys, Advocates, Solicitors and Barristers in Buenos Aires, Argentina

1. Is perpetual fee simple ownership of real property permitted? If not, what are the principal forms of ownership, or other principal form of ownership, of real property?

Yes, perpetual fee simple ownership of real property is permitted.

2. What instruments are used to convey fee simple ownership, or other principal form of ownership, of real estate?

Although a private contract of sale of a property (“Boleto de Compraventa”) will contain valid and binding obligations as between the parties under Argentine law, it will not be accepted for registration in the relevant Land Registry (“Registro de la Propiedad Inmueble”), unless the terms of transfer have been included in a deed of conveyance “escritura pública” executed before a notary public.

3. How in this jurisdiction is the ownership of real property recorded or searched? Who generally performs the search?

In the City of Buenos Aires the deed of conveyance must be presented for registration at the Land Registry within a period of 45 days (40 days in the case of the province of Buenos Aires) after its execution before a notary. If it is presented later, it may be subject to any charges or encumbrances that have been presented in the meantime. In addition the notary is responsible for checking the title deeds to the property and ensuring that there are no charges or encumbrances over the property of which the purchaser is unaware. The customary time period of ownership that is searched in Argentina is 20 years.

4. What assurances of ownership are available to purchasers of real property (e.g., title insurance or title opinions)? What is the cost of obtaining such assurances?

There is no title insurance system in Argentina. The Land Registry registers ownership of real property, and such registration is effective vis a vis third parties.

5. What are the most common forms of investment vehicles? What are the most common entities employed to own investment real estate in a tax efficient manner?

An Argentine corporation (sociedad anónima), an Argentine limited liability company (sociedad de responsabilidad limitada), or an Argentine trust are the most common forms of entities used.

6. Has this jurisdiction adopted, or is it considering, legislation permitting the creation of real estate investment trusts or similar entities?

Although there are specific REIT regulations for publicly offered REITS, they have not been used in practice. However, several other Argentine entities may be used to form an entity similar to a REIT, such as an Argentine corporation (sociedad anónima), an Argentine limited liability company (sociedad de responsabilidad limitada), or an Argentine trust.

7. What state or local transfer, stamp or similar taxes are levied generally on sellers or buyers upon the direct transfer of real estate?

The provincial stamp tax (“Impuesto de sellos”) is a local tax levied on monetary acts, contracts or transactions which are evidenced in writing. While each provincial jurisdiction and the City of Buenos Aires has its own particular legislation, their provisions are very similar.

In principle, the tax is imposed on contracts executed in the relevant provincial jurisdiction. In the case of real estate, if the contract is executed in a different jurisdiction from the location of the real estate, in principle tax will be due both in the jurisdiction where the real estate is located as well as the jurisdiction of execution of the contract, unless there is provision for the avoidance of double taxation in the relevant provincial jurisdiction. Care must therefore be taken when dealing with real property to ensure that any contractual documentation is executed generally only in the jurisdiction where the property is located. In practice, provincial stamp tax is normally borne in equal parts by the parties, however in as far as the tax authorities are concerned they may claim the full amount of the tax from any of the parties to the transaction. The transfer of real property is subject to stamp tax on the higher of the values resulting from the value of the property in the deed of acquisition and the fiscal value as established in the provincial (in the City of Buenos Aires the municipal) cadastral records. The applicable rate in most provincial jurisdictions is 4% and 2,5% in the City of Buenos Aires (usually 1% is paid at the time the preliminary sale contract (“Boleto de Compraventa”) is executed and the remaining balance is payable upon the execution of the notarial deed of conveyance).

8. What state or local transfer, stamp or similar taxes are levied generally on sellers or buyers upon the transfer of interests in entities which own real estate?

As stated above, the provincial stamp tax (“Impuesto de sellos”) is a local tax levied on monetary acts, contracts or transactions which are evidenced in writing. While each provincial jurisdiction and the City of Buenos Aires has its own particular legislation, their provisions are very similar in many respects. However, no stamp tax applies to transfers of interests in entities which own real estate in the City of Buenos Aires.

9. How significant is local regulation and taxation of real estate? How significant is the variation of real estate law among political subdivisions of this jurisdiction?

The provincial stamp tax may be applicable. See prior answers for additional information.

10. Must ultimate beneficial owners of entities which own real estate be disclosed as a matter of public record?

No.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

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Immigration Law Argentina

Immigration Law Argentina: Argentina at the forefront of immigration policy

The country’s immigration law is serving as a model for the region

BUENOS AIRES, Argentina – Argentina is at the forefront of immigration policy in South America. Immigration Law Argentina

Through Law 25,871, which was issued in 2003 and considers migration a human right, the country has been promoting immigrant participation in society and fostering regional inclusion.

“It’s not the people who should be at the service of the state. It’s the state that should be at the service of the people,” said Martín A. Arias Duval, the director of the National Department of Immigration (DNM). “Therefore, all public policies are beginning to shift toward the recognition of rights.”

Two key initiatives are the Patria Grande program, which regularized the legal status of more than 200,000 foreigners between 2006 and 2010 and the creation of the DNM, which is focused on serving immigrants.

The law recognizes migration as an “essential and inalienable” right. It also provides for “equal access for immigrants and their families to the same protections, support and rights of citizens, particularly with regard to social services, public goods, education, health, justice, labor, employment and social security.”

Argentine legislation, which provides immigrants with the right to vote in municipal elections, has served as an inspiration for neighboring countries such as Brazil, which is considering a new immigration law.

“The Argentine law provides guidelines that promote not only the human rights of immigrants but also the integration between countries of the region,” said Paulo Illes, director of the Center for the Human Rights and Citizenship of Immigrants (CDHIC), which is headquartered in São Paulo. “It’s not just a law, it’s an immigration policy.”

The Argentine law is very different from the law currently on the books in Brazil, which is the Alien Statute of 1980, according to Illes.“That statute is guided by what the immigrants cannot do, such as join unions,” he added. “The Argentine immigration law is affirmative, as it’s based on the principle of promotion.”A focus on integrationThe current Argentine immigration law substituted the Videla Law, which was passed in 1981 and addressed the immigration issue from a perspective of national sovereignty and security.“At that time, even though the region’s governments collaborated with each other, there was a lot of mistrust. In fact, Argentina was about to go to war with Chile in 1978,” Duval said. “Now, we no longer analyze migratory patterns from a national security standpoint but rather in terms of integrating the immigrants into the society that is receiving them.”Communities form bonds

There are a total of 1,805,957 foreigners living in Argentina – accounting for 4.5% of the overall population – according to the most recent National Census, which was conducted in 2010.

The Paraguayan community is the fastest-growing immigrant population. Between 2001 and 2010, it experienced a 69% increase, reaching 550,713, according to the International Organization for Migration (IOM).

“The Paraguayan community has some of the deepest roots in Argentina,” said Ezequiel Texidó, the IOM’s regional representative in Buenos Aires. “We see a lot of mixed marriages between Paraguayans and Argentines.

There are also a significant number of immigrants from Bolivia (345,272), Chile (191,147), Peru (157,514), Uruguay (116,592) and Brazil (41,330).

However, due to the economic crisis, the number of foreigners has remained stable. There was only a 0.3% increase between 2001 and 2010, according to the IOM.

An example for the region

In 2002, Argentina, Brazil, Paraguay, Uruguay, Bolivia and Chile signed the Residency Agreement, which came into effect in 2009.

The agreement recognizes the right of the citizens of signatory countries to establish residency freely in the territory of other signatory countries.

The agreement was an important step toward free movement within the bloc, said Helion Povoa Neto, coordinator of the Interdisciplinary Center for Migration Studies (NIEM), at the Federal University of Rio de Janeiro.

“These citizens receive temporary residency, which after two years can be converted into permanent residency, provided they can show ties with the country [of destination],” he said.

There was a delay in implementing the agreement because Paraguay only ratified it in 2009. Prior to that, Argentina had implemented the agreement unilaterally.

“We encourage neighboring countries to adapt their regulations to recognize Argentine immigrants and to reciprocally offer them the same rights we grant their citizens,” Duval said.

Argentina signed a bilateral agreement with Brazil, whereby any Argentine citizen can directly receive permanent residency, bypassing the period of temporary residency, and vice versa.

“We also signed an agreement with Brazil regarding the connected regions along our borders,” Duval added. “It allows an Argentine to hold residency in Argentina and work in Brazil, and vice versa, without the need to establish residency in the other country.”

These agreements strengthen the union between the two countries, Duval added.

“Easy access to legal residency even helps in the fight against human trafficking,” he said.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

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INSOLVENCY, REORGANIZATION AND BANKRUPTCY LAW IN ARGENTINA: AN OVERVIEW

I. Introduction and General Characteristics

A. Introduction

The current federal bankruptcy law for the Republic of Argentina (“Argentina”) may be found in law number 24,522 of the Commercial Code (the “Code”) which was enacted on July 20, 1995 and made effective December 9, 1995 following approval by the Executive branch of government.

The preceding Bankruptcy law, law number 19,551 of the Code, was enacted in 1972 and was later modified by law number 22,917 of the Code enacted in 1983. The current bankruptcy law is identical to approximately eighty (80) percent of the prior law. Therefore, doctrine and jurisprudence applying law number 19,551, as modified, may serve to interpret a large portion of the new law. Nevertheless, numerous commentaries have already been published regarding the new law, particularly with respect to its new aspects.

B. General Characteristics

By way of comparison with the prior legislation, the new law contains the following general characteristics:

1. Preservation of Structure

The new law maintains the structure of the prior legislation in the order by which various topics are presented, both generally and specifically. The new law also maintains substantially the same text as the old law in the majority of its chapters. Despite the introduction of new and important changes – including modifications in the “spirit” of certain statutory solutions to problems posed by insolvent entities – the preservation of structure and text permits better application of the new law by building on the important doctrine and jurisprudence created under the old law. This also permits better understanding by the non-specialist, who will find that an update in reviewing the new legislation can be completed in relatively short order.

2. Abandonment of the Project ProPosing to Adopt Foreign Legislation

Prior to the enactment of the new legislation, a proposal was circulated to adopt, in general terms, the bankruptcy law of the United States. The proposal ultimately failed, which, according to the author, was correct since insolvency legislation in any country should reflect the variety of cultural and environmental conditions present in the host country. Additionally, the author believes that bankruptcy laws of a given nation should fit, in “glove-like” fashion, the legal norms of the host country which nominally dictate the principles by which solvent institutions regulate themselves and which are applied to insolvent debtors. Each country therefore requires specific legislation for its own judicial institutions which are not copies of those present in other countries, while preserving the significant advantages of applying comparative law principles to analyze and create solutions.

3. Parallel Projects of the Ministry of Justice and Domestic Doctrine and

Legislation

Prior to the foregoing proposal, a commission created by the Ministry of Justice developed a study which was ultimately published.’ While many of the solutions incorporated in the new law originated from this study, the new law also preserves certain traditional doctrines and jurisprudence.

4. Argentine National Reality and Economic Momentum

Domestic political and economic conditions in existence in Argentina affected the formulation of the new law. An illustration of this phenomenon may be found in certain articles See, e.g., Alegria, “Lights and Shadows in the New Bankruptcy Law”, Enoikos, Faculty of

Economic Sciences (year 4, number 11).

II. Basic Structure of the New Law

Similar to its predecessor, the new statute is divided into four articles with the titles “General Principles”, “Reorganization (“Concurso Preventivo” and “Liquidation” (“Quiebra”).

The fourth section, due to a transcription error in the text of the statute, does not have a title and contains administrative provisions common to all of the other sections, including rules regarding professionals, procedure, small cases and transitions.

The provisions under the reorganization article of the new law are comparable to the reorganization provisions in chapter 11 of the United States Bankruptcy Code (11 U.S.C. et seq.). Nevertheless, the reorganization article also follows certain traditions in Argentine law.

The publisher of the study was Abelado-Perrot, which published the text in 1993.

All terms of art used in this manuscript will be followed in parentheses by the translated original term in Spanish which will be in italics. The translator used certain discretion in translating terms used in the Argentine legal system which do not have a precise counterpart or equivalent in the U.S. legal system.

III. General PrinciPles

A. Cessation of Pavments

The fundamental concept in the commencement of a reorganization continues to be the state of cessation of payments, which originates from European law and is interpreted extensively in Argentine doctrine and jurisprudence.

B. Entities Qualifying to Reorganize

Reorganizations and liquidations may encompass the assets and liabilities of any entity in the general civil arena (including associations and foundations) and in the commercial arena. The new law expressly excludes insurance companies, administrators of retirement plans and pension funds, all of which are subject to unique treatment.

The new law includes the novelty of permitting the reorganization and the liquidation of entities in which the national, provincial or municipal state may be a party regardless of the degree of the state’s participation. A case is currently pending in which this new provision is being applied.

C. Cross Border Insolvency

The fourth article of the new law contains many of the same provisions which were present in article four of the old law. The foreign creditor may exercise its rights in reorganizations and liquidations initiated in Argentina in accordance with certain internationally recognized insolvency principles. In the event of a cross border insolvency involving a domestic liquidation in Argentina and a reorganization overseas, foreign creditors receive their distributions after Argentine domestic creditors receive their distributions.

IV. Reorganizations (“Concursos Preventivos”)

A. Generality

Reorganizations, as well as nonjudicial workouts (“concursos preventivos extrajudiciales”), are the only measures available to prevent a “straight” liquidation under Argentine law. In practice, massive or global credit refinancings have been permitted in Argentine reorganizations (“clubes de bancos”).

B. Filing. Effects of Filing and the “Apertura”

The new law imposes requirements on the debtor in both the initiation and in the period immediately following the commencement of a reorganization which is designated in Argentine jurisprudence as the “Apertura”.

The effects of the Apertura include the administration of the debtor’ s affairs by management with certain restrictions and the supervision of a trustee. If certain acts are imposed contrary to certain legal requirements, management can lose administrative control over the debtor during the course of the reorganization. The Apertura serves to stay or suspend activity against the debtor by interested parties, it permits the debtor to resolve certain pending contracts and it retains certain important effects over pending litigation. The new law also acts to suspend collective bargaining agreements with labor unions over a three (3) year period, applying only general labor law. The new law also contemplates the creation of an interim collective bargaining agreement (“convenio colectivo de crisis”) which is followed until the reorganization plan (“propuesta de acuerdo”) is implemented.

C. Duration the Course of the Reorganization

Once the judge initiates the reorganization, certain rulings and letters to creditors are issued. The new law includes new provisions which permit the debtor to remove itself from the reorganization, provided that a certain majority of creditors agree with the debtor’s removal. This alternative does not require the proposal of a plan of reorganization.

Creditors have a certain period time within which to prove or verify their claims to the trustee or the judge. The verification process is complete upon the entry of a judicial ruling which verifies the claim, or which alternatively finds that the claim is admissible or inadmissible. Creditors with verified claims which have not been reviewed by the debtor or the trustee will have the advantage of resolution by adjudication. However, creditors with admissible claims by judicial ruling but which have also been reviewed by the debtor or the trustee are the onlv creditors whose claims will be counted for voting purposes in connection with a plan of reorganization.

D. General Information. Process and Voting

The trustee presents a general report (“inforrne general”) regarding the background of the debtor and any activity during the course of the reorganization.

The new law contains certain important modifications to the plan of reorganization and the voting process:

(i) Differentiation of voting creditors by classifying creditors and creditor groups in the plan. The classification is proposed by the debtor but is resolved by the judge prior to voting;

(ii) Designation by the judge of an interim creditors’ committee, the composition of which is determined by plan classes;

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(iii) An exclusive period which varies from thirty (30) to sixty (60) days commencing from the date on which the judge creates the voting classes, during which a debtor has the exclusive right to propose a plan and obtain creditor approval;

(iv) Broad latitude in making plan proposals involving any solution which may be legally implemented (such as amortization payments, refinancings, asset transfers, etc.);

(v) A requirement that the debtor propose, at a minimum, treatment for unsecured creditor classes; however, the debtor may also incorporate agreements involving secured creditor classes;

(vi) Plan voting by written and certified (by judicial or administrative notary) ballot submitted by the voting creditors. This modification is particularly significant since, under the old law, plan voting was accomplished by a special creditors’ committee (“junta de acreedores”) which is no longer in existence;

(vii) Following the expiration of the exclusive period, alternative plans may be proposed by creditors or third parties for certain types of debtor entities, namely limited liability companies (“sociedades de responsablidades limitadas”), cooperatives (“cooperativas”) or entities in which the government retains an interest. In contrast to the U.S. system, the debtor cannot make a competing proposal since the expiration of the debtor’s exclusive period in effect creates another exclusive period in favor of third party creditors. Under Argentine law and in stark contrast to U.S. Iaw, the judge does not have the authority to impose a plan on any class of creditors by means of a “cramdown”, nor do shareholders or partners comprise a separate creditor class. Another unique and controversial feature of Argentine insolvency law is a doctrine establishing that the first plan proposal to be approved by sufficient votes will be confirmed by the court regardless of the merits of a competing plan proposal which may be submitted for approval after the first plan. The plan obtaining the majority vote may request valuation of the debtor’s assets by the judge in a complex and lengthy proceeding. In practice, most confirmed plans are proposed by the debtor itself; and

(viii) The judge then confirms the plan which has either been proposed first by the debtor during its exclusive period or later by a creditor or a third party in the subsequent exclusive period. In order for the judge to confirm the plan, the requisite majority votes must exist. The old law contained a provision which has been repealed permitting a judge to reject plan confirmation, even with the requisite vote, when the plan was against the “general interest”. A new provision under the new law permits the judge to declare the completion of the reorganization following confirmation and the completion of immediate plan requirements. The trustee may therefore exit the case at an earlier stage than under the old law, which required the trustee ‘ s involvement until all plan provisions had been implemented. However, the new law also perrnits the judge to rule that the plan provisions have been satisfied and completed (“el cumplimiento del acuerdo”) through a special ruling entered when all plan provisions have been met.

E. Group Reorganization Cases

A significant development under the new law which was promoted by the project study sponsored by the Ministry of Justice involves one reorganization proceeding of various entities collectively joined in an economic group. In order for such a proceeding to be initiated, a single judge and one trustee must retain jurisdiction over all of the proposed entities in a given economic group. Despite this requirement, the new law permits that a plan be submitted individually for each entity in the group or collectively by the entire group. If an individual plan is not consummated, only the one entity which submitted the defaulted plan will be liquidated, whereas a default under the collective plan will result in the liquidation of all of the members of the group.

F. Noniudicial Workouts

Another feature under the new law is the separate treatment of nonjudicial workouts. Generally, Argentine law has provided for nonjudicial workouts (“acuerdos preconcursales”) consisting of private agreements between a debtor and all or certain of its creditors. These provisions responded to the practice of implementing nonjudicial workouts through “clubes de bancos”, and permitted certain reasonable assurances for creditors, particularly in the event of subsequent liquidation.

The current nonjudicial workout provisions under the new law implement a new procedure which is ironically judicial in nature. This procedure serves to legitimize a workout agreement by insuring that it contains certain basic provisions and by subjecting the parties to a brief proceeding. Under the new law, the workout agreement only binds the creditors which executed the agreement. Furthermore, once the agreement has been approved by the judge, it may not be collaterally attacked by preexisting or future creditors in the event that the debtor subsequently liquidates.

Significantly, the new law does not specify whether nonjudicial workouts which are not subjected to this procedure are valid and enforceable. For example, the validity of a partial or complete debt refinancing is unclear under these new provisions.

V. Liquidations (“Ouiebras”)

A. Generality

Unlike the numerous changes in the reorganization article, the new law provides fewer novel provisions with regard to liquidations. The liquidation article will therefore be summarized with brevity.

B. Declaration of a Liquidation

A judge will enter an order and thereby initiate a liquidation upon the request of a debtor or a creditor or following a default or nullification of a plan in a reorganization proceeding or nonjudicial workout. The petition filed by the creditor is processed very quickly and in many cases is used to collect accounts receivable or other debts.

C. Conversion to a Reorganization (“Conversion”)

This new procedure replaces the prior procedure under the old law, denominated the “acuerdo resolutorio”, by which an agreement was obtained following the judicial initiation of a liquidation as a means to resolve the state of liquidation. This procedure permits the debtor to require the judge to convert a liquidation proceeding to a reorganization proceeding. This may occur quickly but will not be permitted in the event that a default occurred in an agreement arising from a nonjudicial workout.

D. Effect of a Liquidation

The new law contemplates a large number of effects resulting from the initiation of a liquidation proceeding, some of which will be listed below:

(i) The debtor, its owners and management are prohibited from conducting their business from the date of the judicial declaration for a period of at least one (1) year. This restriction also applies to prior management who were active during the statutory lookback period (“periodo de sospecha”) which is described below. The prohibition period may be reduced by the judge in the event that no evidence of criminal activity exists. On the other hand, this period may be extended or even reestablished if the debtor or its management are subject to a criminal action;

(ii) The debtor is divested (“desapoderado”) of its assets which are administered and eventually disposed by the trustee in accordance with procedures set forth in the new law;

(iii) The new law establishes a lookback period (“periodo de sospecha”) extending prior to the initiation of the liquidation proceeding and which commences on the date on which the debtor ceased paying its obligations. This period may not extend beyond two (2) years prior to either (a) the date of initiation of the liquidation or (b) the date in which the nonjudicial workout agreement is presented, whichever is applicable. In exceptional cases, such as conveyances for no consideration or payments in anticipation of indebtedness, the actions by the debtor during the lookback period may be void ab initio (“ineficaces de pleno derecho”). Remaining actions by the debtor during this period are voidable (“revocables”) if the party with which the debtor performed the act had knowledge that the debtor had ceased paying its obligations. These voidable transactions require a judicial determination which is usually initiated by the trustee but which in certain instances may be initiated by the creditors;

(iv) The new law contains general provisions (“efectos generales”) generally consisting of claims verification by all of the creditors, the suspension of the transfer of assets (with the exception of collateral pledged to secured creditors), the consolidation of all pending litigation into the liquidation proceeding and other matters; and

(v) A special chapter in the new law addresses contractual issues which are pending at the time of bankruptcy which are primarily resolved by application of traditional norms under Argentine law.

E. Extension of the Liquidation Proceedings to Nondebtors

Since 1972, under certain circumstances outside nondebtor entities may be subject to a liquidation proceeding in Argentina. The extension of a liquidation proceeding automatically occurs, without any limitations, to the partners of a liquidating commercial entity. Individuals or corporate entities may also be subject to a liquidation proceeding by “piercing the corporate veil” (“sociedad pantalla”) under which parties abused their control of the corporate entity or transferred title of the debtor’s assets.

F. Other Responsible Parties

The new law provides that fraudulent activity non-debtor parties, including partners, owners or management of the debtor, will result in liability for these parties and their being subject to the bankruptcy proceeding.

G. Elimination of Conduct Evaluation (“Calificacion de Condllcta”)

The new law eliminates the conduct evaluation provisions of the old law which had been criticized for their lack of efficiency. The drafters of the new law recognized the redundancy of keeping the conduct evaluation provisions given the liability provisions for fraudulent and negligent activity under the new law which are described above.

H. Other Matters

The liquidation article in the new law also includes provisions regarding the following:

(i) The administration and sale of assets (which must be initiated four (4) months from the initiation of the liquidation). Under exceptional circumstances, a business may continue to operate after the filing;

(ii) The distribution of proceeds to creditors;

(iii) The conclusion of the liquidation proceeding by agreement among the creditors or by satisfaction of claims in full; and

(iv) Closure of the proceeding due to final distributions having been made or the liquidation of all of the debtor’s assets.

VI. Common Provisions (“Disposiciones Comunes”)

The unnamed Article IV in the new law corresponds to the same article under the old law with the title “Dispociones Comunes”.

A. Priorities

Priorities under the new law are genera]ly the same as under the former bankruptcy law in Argentina. Subordinated loans are recognized under the new law.

B. Trustees and Professionals in Bankruptcv Cases

1. Trustees

The trustee provisions in the old law have been preserved, with certain minor modifications, under the new law. Trustees in Argentina consist primarily of certified public accountants. The new law contains new provisions regarding the creation of two lists which include (i) List A, comprised of firms which serve in large, complex reorganizations and liquidations and (ii) List B, comprised of independent professionals who serve in the remaining cases. The trustees serve on each list for a period of four (4) years and the trustees are designated by each judge by drawing lots.

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2. Other Professionals

Other professionals who participate in the Argentine bankruptcy process include:

(i) Administrators (“coadminstradores”‘) who serve by judicial appointment and generally have a business degree or experience relating to the debtor’s business;

(ii) Creditors’ Committees are appointed. although the role of these committees is controversial partially due to their mandatory appointment in the process;

(iii) Liquidators serve to liquidate the debtor’s assets and may include auctioneers, banks, investment banks or other specialized professionals; and

(iv) Appraisers calculate the value of the debtor’s assets which comprise the bankruptcy estate.

3. Compensation

The new law has substantially reduced professional compensation in bankruptcy cases. Generally, compensation has been reduced by fifty (50) percent.

C. Procedural Rules

Since this is a federal law which is applied nationally in Argentina, the procedural rules have similar universal application through the country.

D. Small Business Reoroanizations and Liquidations

The new law contains two articles addressing small business reorganizations and

liquidations. In order to qualify for special treatment, the debtor must have one of the following characteristics: (i) liabilities totaling less than $100,000; (ii) no more than twenty (20) unsecured creditors; or (iii) no more than twenty (20) employees. In any event, the “simplification” of the proceedings described in the article for these small cases do not appear to be sufficient.

E Special Aspects of the New Law

1. “Cramdown”

Since no parallel laws were distinctly used as a guideline for the new law, certain practical problems exist in its application. One dilemma involves the valuation issues addressed by a judge when confronted with a “cramdown” scenario in a plan of reorganization to be imposed upon opposing creditors. These classic valuation problems may be manifested by overly optimistic values attributed to a debtor’s assets or by depressed values which do not reflect such assets as intangibles.

2. Creditors’ Committees

As discussed, the new contains numerous imprecise provisions, among them a requirement of the creation of three (3) separate creditors’ committees during the course of a reorganization. In practice, these committees are not effective or have very limited effects.

3. Small Business Reorganizations

In practice, the vast majority of reorganization cases in Argentina involve small debtors. The old law, and in part the new law, require long and convoluted reorganization proceedings which are inefficient economically and occupy substantial amounts of judicial and professional resources. A consensus exists in the professional community to greatly simplify these proceedings in order to avoid protracted resolution and great expense. The study sponsored by the Ministry of Justice contained a more comprehensive and efficient proposal than that which was ultimately enacted under the new law.

4. Time Issues

The application of the new law in reorganizations and liquidations, particularly immediately following enactment, is resulting in numerous conflicts which protract the proceedings and foster insecurity and slowness which are contrary to the goals of this legislation.

5. VotinsJ System and “Cartas Poder

The old law in Argentina provided for a simple document, the “carta poder”, which was used in voting for or against plans of reorganization. The new law omits this provision, thereby creating numerous difficulties and increasing costs, particularly in nonjudicial workouts.

6. Restrictions on Business Activitv

While the elimination of the “calificacion” system for evaluating fraudulent activity can be viewed as a positive development, its substitution by a doctrine of automatic restrictions on any business activity for the debtor and its management may be considered unjust and draconian since the duration of these restrictions may be indefinite if criminal litigation is pending.

7. Liquidation of Assets

The new law provides for a brief period during which assets are to be liquidated.

The author agrees with this concept but also believes that a more streamlined procedure with greater judicial powers should be implemented in order to further expedite asset liquidation.

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8. Refinancings and Private Agreements

The lack of any provisions in the new law regarding refinancings and nonjudicial workouts which are not judicially ratified – and the excessive costs and formalities associated with the nonjudicial workout provisions under the new law – both generate uncertainty when business refinancings or restructurings occur in practice.

Argentina Law Firms – Buenos Aires, Lawyers and Attorneys – Find Law Firms and Lawyers in Argentina

INSOLVENCY, REORGANIZATION AND  BANKRUPTCY LAW IN ARGENTINA: AN OVERVIEW

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The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com

 

A renaissance in Argentina’s mining industry.

Argentina: an Overview

After centuries of inactivity, the last decade has seen a renaissance in Argentina’s mining industry. Argentina is a country for mining entrepreneurs with an appetite for risk and eager for incredible geology. Despite the very name of Argentina being a reference to its mineral resources (in Latin, Argentina is the feminine noun for silver), the second biggest South American country has yet to develop its mineral potential. After remarkable growth in the mining sector over the last 10 years, the nation should now see the beginning of a new era with very large projects coming into place for the first time. According to the Secretary of Mining, there are a total of 614 mining projects, including the large scale Barrick Gold’s Pascua Lama and Vale’s Rio Colorado. These projects range from exploration to production and from industrial minerals to precious metals and are changing the face of Argentina. According to Julio Ríos Gómez, the president of the association of exploration companies in Argentina, GEMERA: “In 2003, commodity prices started increasing again and mining companies realized that it was a good moment to invest in exploring new deposits. About 70% of the exploration activities involves small and medium companies, and subsequently the industry started developing at a very quick rate.” It is surprising that Argentina is so underexplored when compared to neighboring countries Chile and Brazil. Theories explaining this vary widely. One of the most accepted explanations is that, because Argentina has such fertile land, most investments have been focused on agriculture, generally considered to be less risky than mining. “So far, Argentina has been known for its agriculture, but if mining develops to its full potential, we should see incredible changes. We are seeing ever-larger projects such as Rio Colorado and Pascua Lama, but we expect to see much more. Projects mining for copper such as El Pachón and Agua Rica are both going to invest nearly $5 billion. These and other projects will help change the Argentinean business landscape dramatically by bringing not only investments but development to the regions where they are located,” said Leonardo Viglione, a partner at PWC Argentina. There are several provinces that do not have the potential for agriculture but have geological potential that many believe, if put together, could be the equivalent of the sum of Chile and Peru. María Inés Llorvandi, the general manager of the Argentinean subsidiary of the Chilean engineering firm JRI is optimistic when it comes to Argentina’s geology. “The mining industry in Chile is very well developed and looking at the broader size of Argentina and the geology here, it is logical to expect that in the near future the benefits could be significantly higher than the ones that Chile has received,” she said.With gold prices reaching more than $1,700/oz, a favorable context has been set for explorers and Argentina saw an increase of 664% in drilling activities for different minerals by exploration companies since 2002. Nevertheless, despite great expectations when it comes to the geology of the country, private companies look at Argentina’s political scenario with caution that leads to pragmatism. Walter Soechting, general manager of Gold Fields in Argentina said that his company drilled 8,000 meters in 2011 but only 5,000 meters in 2012, a strategy that seeks to balance the risks associated with investing in the country and its geological potential. However it should also be noted that their activities in Las Taguas, their flagship project in the country, is also close to its final stages of exploration and should enter the development stage soon where less drilling is required. The president of the Argentine Chamber of Uranium Companies (CADEU), reckons that current regulations may also continue to stifle investments. “Some provinces are trying to force mining companies to associate with provincially controlled companies. I don’t particularly consider this a negative thing in all situations, but impositions tend to be inconvenient as a general rule to most projects. It is not clear what impact these initiatives will have on the industry. Clearly it is not a specific Argentinean issue; many countries are reviewing their mineral policy with a more interventionist view,” he said. Damián Altgelt, general manager of the Argentine Chamber of Mining Companies (CAEM) is part of the front that is working to set a better context for mining companies and its investors. This has proved to be a constant effort to create a more stable and homogeneous business environment and awareness so that, if efficiently regulated, the mining sector can have even greater positive effects. “Our regulatory framework has not provided all communities with the sense of stability and security they expect. Currently, there are seven or eight provinces which have antimining legislations. Some of these include provinces which do not have a lot of mining opportunities but the rest have adopted such legislation due to political reasons because ultimately it won them votes” Altgelt said.

Conclusion

Argentina faces significant problems: rising inflation, currency exchange restrictions and national debts numbering among them. Yet a large well-educated population, sophisticated industries and geological potential also are very much in evidence.Hunt Mining’s Silva synthesized what is being observed in Argentina right now. “Because Argentina has a very special federal arrangement, mining can help the provinces develop themselves and better connect this country by diminishing the regional economic differences. When this generation of geologists was still at university, many of us did not consider Argentina as a mining country. This opinion was valid until a few years ago, but with our recent achievements we are glad to see that Argentina is now becoming a mining country again.”

Find a lawyer in the major mining provinces of Argentina: Catamarca, Chubut, Córdoba, Jujuy, La Pampa, La Rioja, Mendoza, Neuquén, Río Negro,Salta, San Juan, San Luis, Santa Cruz, Tierra del Fuego and Tucumán.

Kier Joffe – Attorney at Law – Buenos Aires – Argentina – Practice Areas: : Hydrocarbons, Energy and Natural Resources Law; Competition and Antitrust Law; Administrative and Environmental Law; Mining.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com

Title Insurance Company – Buenos Aires – Argentina – Real Estate

Kier Joffe Title Insurance Company is a full service state-of-the-art title insurance underwriter providing title insurance and title related services for all types of residential and commercial transactions.  Kier Joffe Title Insurance Company issues its title policies through over its Issuing Agents as well as Title, Escrow and Abstracting offices dedicated to serving individuals, businesses, attorneys, developers, lenders and Realtors in all the Argentinean provinces: Autonomous City of Buenos Aires, Buenos Aires Province, Catamarca, Chaco, Chubut, Córdoba, Corrientes, Entre Ríos, Formosa, Jujuy, La Pampa, La Rioja, Mendoza, Misiones, Neuquén, Río Negro, Salta, San Juan, San Luis, Santa Cruz, Santa Fe, Santiago del Estero, Tierra del Fuego, Antártida e Islas del Atlántico Sur y Tucumán.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com