30 days of the new Bankruptcy Law

Lei nº 14.112/2020

Judicial recovery is a procedure designed to support the overcoming of the debtor’s economic-financial crisis, in order to preserve economic activity (art. 47). It is required by the entrepreneur or company, provided that the requirements provided for by law are cumulatively met (art. 48). The legislation also allows the debtor to propose a recovery plan out of court, the purpose of which is to negotiate its debts and obligations with creditors (art. 161).

A month ago, Law No. 14,112 / 2020 came into force, which amended Law No. 11,101 / 2005, responsible for disciplinary judicial, extrajudicial and bankruptcy recovery. The main changes refer, in summary, to: (1) the possibility of creditors presenting a recovery plan; (2) characterization of abusive voting; (3) economic groups; (4) incentive to grant credit to companies during judicial reorganization; (5) payment in installments and transactions in relation to federal tax debts; (6) facilitating extrajudicial recovery; and (7) promoting the most appropriate conflict resolution.

(1) Presentation of a judicial reorganization plan by creditors (art. 56, §§ 4 to 9): once judicial reorganization is requested, creditors may propose the debtor’s judicial reorganization plan, when the one organized by him is rejected, the which will be put to a vote, once the conditions foreseen by law are satisfied (art. 56, § 6, I to VI).

(2) Abusive vote (art. 39, § 6): the possibility for the Judiciary to cancel the creditors’ vote was restricted to proof of abuse, that is, that it was exercised with the objective of obtaining an unlawful advantage for itself or for others.

(3) Economic groups (art. 69-G to 69-L): the request for judicial reorganization under procedural consolidation was made available to debtors who are part of a group under common corporate control. To this end, specific rules were envisaged to ensure the independence of debtors, provided that the hypotheses of substantial consolidation are not configured, at the same time that the costs for the companies involved in these procedures are reduced.

(4) Financing (art. 69-A to 69-F): a procedure has been established for the conclusion of financing contracts with the company under judicial reorganization, which will have an extra-bankruptcy nature (art. 84, I-B). This must also meet the requirements of express judicial authorization and provision in an approved judicial or extrajudicial recovery plan (art. 66-A and 69-A). In addition, the provision of a guarantee on one or more assets of the debtor may be authorized, without the consent of the one who holds the original guarantee (art. 69-C).

(5) Federal tax debts: are subject to new installment options (art. 10-A and 10-B, Law 10,522 / 2002) upon adherence to the term of commitment (art. 10-A, § 2-A, Law No. 10,522 / 2002), as well as the presentation by the company in judicial reorganization of the transaction, which will be analyzed by the Attorney General of the National Treasury according to requirements provided by law (art. 10-C, Law No. 10,522 / 2002). Both modalities have a maximum discharge period equivalent to 120 months (art. 10-A, V and 10-C, I, Law No. 10,522 / 2002).

(6) Extrajudicial recovery (art. 161 to 167): in order to expand the use of this instrument, the rule of conduct included – the suspension of executions since the respective request (art. 163, § 8); the subjection of labor liabilities through collective bargaining (art. 161, § 1); and the reduction in the quorum for approval of the extrajudicial recovery plan (art. 163, caput).

(7) Conciliation and mediation (art. 20-A to 20-D and 22, I, “j”): they should be encouraged in any degree of jurisdiction, being admitted prior and incidentally to judicial reorganization processes. In addition, it is now among the duties of the judicial administrator to encourage appropriate conflict resolution methods.

Wilson Sales Belchior