Subsidiary Liability of the Parent Company

Law 222 of 1995, which amended Book II of the Code of Commerce, issued a regime of bankruptcy proceedings and other provisions, in the paragraph of Article 148 created the regime of subsidiary liability of the parent or controlling companies, a rule that was repealed by Article 126 of Law 1116 of 2006, which establishes the corporate insolvency regime, in which Article 61 reiterated the provisions concerning such liability. According to the provision contained in article 61 of the mentioned law, it is understood that the subsidiary liability requires the existence of a parent or controlling company, of a subordinate company in insolvency or judicial liquidation and of a causal relationship between the acts of the parent company and the state of insolvency or judicial liquidation of the subordinate company.