What happens to labour debts when a company is bought

thesis This section is short in length and large in effect on one concrete transaction: buying a local supplier company. In an Argentine acquisition, unregistered labour liability is the item that most often kills the price or the deal itself, because it cannot be bounded: nobody knows how much it is, and the seller's warranty does not cover it. Putting the exemption in the law and tying it to due diligence does two things at once: it gives the buyer a defence that did not exist, and it puts economic value on doing the review properly — diligence stops being a legal expense and becomes what buys the exemption. ⇒ For the satellite ecosystem the effect is second-order but real: buying an Argentine supplier with a workforce becomes a viable way in for an outside player, and that puts an exit price on the SMEs currently inside the chain. ⚠️ What could break this reading: the law does not define what "due diligence acts" are, so until there is case law the buyer does not know how much it has to review to be covered — and whoever has to prove they did it will be the buyer. thesis