Restructuring and insolvency
The idea is to establish transitional measures, for one year or while the economic crisis resulting from the pandemic continues, to help business owners and all economic players to restructure their businesses and minimize the impacts of the crisis.
Import or export problems, decreased production, and falling consumption have forced companies undergoing judicial reorganization to navigate an even more delicate situation. The current quarantine also prevents meetings of creditors from approving new reorganization plans.
From January to June of this year, 829 applications for bankruptcy and 685 applications for judicial reorganization were filed for Brazilian companies, according to Serasa Experian. The high numbers reflect Brazil’s unstable economic situation and overwhelm the Judiciary with complex bankruptcy proceedings due to the huge number of participants and the diversity of legal issues involved.
The Judicial Reorganization and Bankruptcy Law (LRF) establishes that, once the request for judicial reorganization is accepted, all lawsuits and enforcements against the debtor will be suspended during the stay period, except for claims that are labor in nature, those that involve illiquid amounts and tax foreclosures.
