Dissatisfied Chilean buyers once pursued civil litigation for contract rescission or damages; now they file criminal complaints arguing sellers’ provision of false information constitutes inexcusable fraud. Similarly, sellers alleging buyers misrepresented financial capacity turn to criminal courts rather than contractual remedies. Francisca Franzani of DLA Piper details how this cultural shift demands heightened standards in negotiation and contract drafting, with share-purchase agreements requiring enhanced representations covering regulatory compliance and robust indemnity mechanisms designed to mitigate criminal liability exposure.
Historically, disputes arising from mergers and acquisitions (M&A) transactions in Chile have been resolved through commercial or civil proceedings. Common issues include breach of representations and warranties, indemnification claims and contractual liability. Criminal law has traditionally been regarded as a last resort and usually irrelevant to private transactions.
This landscape is changing. The enactment of the Economic and Environmental Crimes Act has created a new dynamic, with an increasing number of criminal complaints, such as fraud or willful mismanagement, being filed in connection with M&A transactions. Allegations often focus on sellers intentionally…
