Post by account_disabled on Feb 22, 2024 3:44:07 GMT -6
In June 2023, Bill No. 2,925/23 was presented to the National Congress, which intends to amend Laws No. 6,385/76 (Securities Law) and No. 6,404/76 (SA Law), with the objective, according to the menu, to “provide for transparency in arbitration processes and the system of private protection of the rights of investors in the securities market” . Even before it was approved, the PL has already been generating a series of debates.
The PL intends to address issues highlighted in studies carried out by the CVM in collaboration with the OECD [1] and, in current terms, promises to change the current private enforcement regime . This is a subject of great relevance, as “the private protection of interests can be as efficient or more efficient than state regulation — or complementary to it”.
Incentives for litigation
In the case of currently foreseen liability actions against Bulgaria WhatsApp Number administrators (article 159 of the LSA) or controllers (article 246 of the LSA), corporate law grants extraordinary legitimacy to minority shareholders as long as they represent at least 5% of the capital social security or, in actions against controlling shareholders, to provide a deposit.
The PL, in turn, brings new incentives to litigation. This is because liability actions could now be proposed by shareholders representing 2.5% of the share capital or a value equal to or greater than R$50 million, updated annually by the IPCA, in the case of publicly-held companies (wording of the PL for articles 159, § 4 and 246, § 1, of the LSA) — against, therefore, the current 5%.
In addition, the responsible author would receive a premium of 20% of the value of the conviction, deducting succumbing fees (PL proposal for articles 159, §5º-A and 246, §2º, of the LSA), including in the case of transaction successful (proposed wording for articles 159, §5º-C and 246, §2-Bº, of the LSA). The provision, unprecedented in the case of actions against the administrator, is intended to protect the rights of investors and, consequently, investments in Brazilian companies.
Division of the award and discount on succumbing fees
The PL also proposes the division of the award, if there is an active joinder, according to the “contribution to the result of the process” (wording of the PL for articles 159, §5-B and 246, § 2º-A, of the LSA). Considering, however, the complexity of corporate disputes, perhaps the PL would go well if, from the outset, it established objective parameters for measuring the effort of each author for the purpose of distributing the award by the judge.
Another criticism made of the proposed wording concerns the inaccuracy in determining the discount for the loss of suit fees. This is because it is not clear what distribution will be made between the shareholder and his lawyer of the bonus to be paid by the controller or administrator, especially if it is considered that the values of the succumbence funds can reach 20% of the value of the judgment (article 85, § 2nd, of the CPC). This type of situation could reduce the winning author's award, as well as create discomfort between him and his lawyer.
The PL intends to address issues highlighted in studies carried out by the CVM in collaboration with the OECD [1] and, in current terms, promises to change the current private enforcement regime . This is a subject of great relevance, as “the private protection of interests can be as efficient or more efficient than state regulation — or complementary to it”.
Incentives for litigation
In the case of currently foreseen liability actions against Bulgaria WhatsApp Number administrators (article 159 of the LSA) or controllers (article 246 of the LSA), corporate law grants extraordinary legitimacy to minority shareholders as long as they represent at least 5% of the capital social security or, in actions against controlling shareholders, to provide a deposit.
The PL, in turn, brings new incentives to litigation. This is because liability actions could now be proposed by shareholders representing 2.5% of the share capital or a value equal to or greater than R$50 million, updated annually by the IPCA, in the case of publicly-held companies (wording of the PL for articles 159, § 4 and 246, § 1, of the LSA) — against, therefore, the current 5%.
In addition, the responsible author would receive a premium of 20% of the value of the conviction, deducting succumbing fees (PL proposal for articles 159, §5º-A and 246, §2º, of the LSA), including in the case of transaction successful (proposed wording for articles 159, §5º-C and 246, §2-Bº, of the LSA). The provision, unprecedented in the case of actions against the administrator, is intended to protect the rights of investors and, consequently, investments in Brazilian companies.
Division of the award and discount on succumbing fees
The PL also proposes the division of the award, if there is an active joinder, according to the “contribution to the result of the process” (wording of the PL for articles 159, §5-B and 246, § 2º-A, of the LSA). Considering, however, the complexity of corporate disputes, perhaps the PL would go well if, from the outset, it established objective parameters for measuring the effort of each author for the purpose of distributing the award by the judge.
Another criticism made of the proposed wording concerns the inaccuracy in determining the discount for the loss of suit fees. This is because it is not clear what distribution will be made between the shareholder and his lawyer of the bonus to be paid by the controller or administrator, especially if it is considered that the values of the succumbence funds can reach 20% of the value of the judgment (article 85, § 2nd, of the CPC). This type of situation could reduce the winning author's award, as well as create discomfort between him and his lawyer.