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Representatives of debt-holders and contributors

With almost a decade in the role of legal representative of holders of bonds, commercial paper, and other titles of debt (that companies have issued on the public and private market) and which the stock market law of the Dominican Republic currently refers to in general under the name of representative of debt holders, we can state that the primary function has been to watch out for the interests of investors, so that they not be adversely affected during the term of the titles issued, providing them with the best protection possible.

Specifically, we can state that this function has made it possible to perform all the acts of administration and preservation that have been necessary to exercise the rights and defense of the common interests of investors.

In addition to the role of representing the holders in everything regarding their common or collective interest, is the important role of informing them as well as the Superintendency of Securities as quickly as possible and through the proper channels of any noncompliance with obligations deriving from the issue by the issuing entity, and that of acting in the name of the debt holders in judicial and bankruptcy proceedings, and even in processes of obligatory administrative liquidation.

It´s worth noting that the representation must be exercised by the legal representative of the debt holders, from the date of the authorization by the Superintendency of Securities of the public offering of the respective debt instruments, until their redemption, unless the general assembly of debt holders removes the representative or the latter resigns, either due to serious cause, which case will be analyzed by the Superintendency of Securities, or due to just cause foreseen in the contract of the respective issue.

In this regard, when the issuer is advancing the liquidation process or restructuring of liabilities, the actions of the legal representative of debt holders shall be extended until the process concludes, since even when within the process the stage of acknowledgement of credits has already transpired,they must still proceed to cancel or pay them.
It could also occur that the issuing entity for some reason not comply and not make the payment of the amounts owed, in which case the debt holders would not have anyone to represent them to collect the amounts owed, which fact violates the provisions of current norms regarding the legal representation of debt holders.

In recent months we have been called on to start with the role of representative of contributors, which is how investors are called who purchase portions of participation in closed funds, and who the legal framework of the Dominican securities market establishes as the indebted individual identified in the public records of this type of funds.

According to Article 414 of Regulation 664-12, the common representative contributors to closed funds will watch out for the rights and interests of the contributors to the closed investment funds, and will be governed by the general norms of the representative of the collective of debt holders, insofar as applicable.

José Salas / Managing Partner Salas, Piantini & Asociados

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