Tatiane Bagagí Faria
Lawyer at Marcos Martins Advogados
In January 2021, Law No. 14.112/2020 came into force, bringing important changes and innovations to the reorganization and bankruptcy sphere, until then regulated by Law No. 11.101/2005, in particular the express encouragement to adopt alternative methods for resolving conflicts.
For some years now, Brazilian legislation has been encouraging the resolution of conflicts through the adoption of alternative methods, in particular through mediation and conciliation. The landmark paradigm shift in the judicial sphere took place, in particular, with the enactment of Resolution 125/2010 of the National Council of Justice (CNJ), which implemented the National Judicial Policy for the Adequate Treatment of Conflicts of Interest, with the aim of reducing excessive judicialization.
In the context of judicial reorganization, the National Council of Justice (CNJ) issued Recommendation No. 58 on 22/10/2019, aimed at courts that hear judicial reorganization and bankruptcy claims , recommending that judges use mediation whenever possible to help resolve conflicts between litigants.
Despite the incentive, in 2019, there were more than 41,000 new cases of judicial reorganization distributed in the Brazilian judiciary, according to statistical data from the CNJ. The problem, of course, has been exacerbated by the economic crisis brought on by the Covid-19 pandemic, which has led to a much higher number of lawsuits of this nature.
Thus, the change brought about by Law No. 14,112/2020, in Section II-A of the Judicial Reorganization and Bankruptcy Law, starting with article 20-A, contains an express incentive to adopt conciliation and mediation, in order to resolve, in a consensual manner, some conflicting points of the dispute in the context of reorganization or bankruptcy, as an antecedent or incidental to judicial reorganization proceedings, such as:
- disputes between partners and shareholders of a company in difficulty or under judicial reorganization, as well as disputes involving creditors not subject to judicial reorganization, under the terms of §§ 3 and 4 of article 49 of the LRF, or extrajudicial creditors, whether in the pre-procedural or procedural phase;
- conflicts involving concessionaires or permissionaires of public services under judicial reorganization and regulatory bodies or municipal, district, state or federal public entities;
- non-recourse claims against companies undergoing judicial reorganization during a state of public calamity, in order to allow essential services to continue to be provided;
- negotiation of debts and respective forms of payment between the company in difficulty and its creditors, prior to filing for judicial reorganization.
An important innovation in favor of companies in crisis, contained in §1 of article 20-B, is the possibility of suspending ongoing executions for a period of up to 60 (sixty) days, so that there can be an attempt at composition between the debtor company and its creditors prior to the request for reorganization, provided that the mediation or conciliation procedure is initiated before the Cejuscs or specialized chambers, a period that will be deducted from the stay period,
The legislative update, however, prohibits the use of alternative methods of conflict resolution when the legal nature and classification of credits are under discussion, as well as the voting criteria of the General Meeting of Creditors.
Given this scenario, the adoption of self-composition methods in judicial reorganization and bankruptcy proceedings, considering the current economic and social situation, can be beneficial for those involved in the dispute, as it is a faster and less costly procedure, allowing problems to be solved so that companies in crisis situations have better conditions for recovery and, at the same time, reducing the number of cases before the courts.
Marcos Martins Advogados is aware of this issue and is prepared to provide qualified legal advice to its clients.
