Milena Paternosti
Lawyer at Marcos Martins Advogados
This study aims to address special judicial reorganization, created to give special treatment to micro and small businesses. The topic is very relevant considering that 99% of small businesses are made up of micro and small companies, according to data provided by SEBRAE[1], which generate around 50% of the jobs in the industrial sector[2].
The study of the specificities of the law for these companies is of the utmost importance, considering that in 2015 the number of requests for judicial reorganization increased substantially, with micro and small companies leading the way in this regard. [3]
It should be noted that Law no. 11. 101, of February 9, 2005, notably in its articles 70, 71 and 72, sought to give such companies a less onerous and more simplified legal treatment, with the aim of achieving the objective set out in its article 47, “judicial reorganization aims to make it possible to overcome the debtor’s financial economic crisis, in order to allow the maintenance of the source of production, the employment of workers and the interests of creditors, thus promoting the preservation of the company, its social function and the stimulus to economic activity”.
It is worth saying that the differentiated treatment for micro and small companies is in line with the provisions of articles 170, item IX and 170 of the Federal Constitution.
To make this study easier to understand, it is necessary to mention that the legal definition of micro or small companies is contained in article 3 of Complementary Law 123/2006, which identifies the entrepreneurial company, the simple company, the individual limited liability company and the entrepreneur, duly registered with the Commercial Companies Registry or the Civil Registry of Legal Entities, as the case may be, provided that: I – in the case of a micro-enterprise, it earns, in each calendar year, gross revenue equal to or less than R$ 360,000.00 (three hundred and sixty thousand reais) and II – in the case of a small business, it earns, in each calendar year, gross revenue greater than R$ 360,000.00 (three hundred and sixty thousand reais) and equal to or less than R$ 3,600,000.00 (three million and six hundred thousand reais).
The law allows micro and small companies to opt for ordinary judicial reorganization, applicable to other companies (art. 48), or for judicial reorganization under a special plan. In principle, the complexity of ordinary judicial reorganization makes it inadvisable for such companies to use it, but it may prove to be the best option in specific cases, as will be detailed below.
Under the terms of article 71, the special judicial reorganization plan must be submitted within the deadline set out in article 53 of the same law, i.e. within the non-extendable period of 60 (sixty) days from the publication of the decision granting the processing of the judicial reorganization, under penalty of being converted into bankruptcy.
Before opting for the common or special plan, it is necessary to analyze the debt profile of the company interested in reorganization.
This is because, under the special plan, only unsecured credits are covered, with the exception of those arising from the transfer of official resources and those provided for in articles §§ 3 and 4 of art. 49 of the same law, which deal with financial capital in general, excluding from reorganization debts relating to fiduciary alienation, leasing and others, as well as amounts due as advances on foreign exchange contracts.
In view of this limitation on the credits subject to reorganization, if most of the creditors of the micro or small business are not classified as unsecured, the option for the special plan is not indicated and the ordinary procedure should be adopted, since this modality does not only include unsecured credits and all creditors will be affected by the judicial reorganization plan, which means that all actions and enforcement will be suspended and not only those arising from unsecured credits.
Another very important analysis to be made is about the means of paying creditors, which directly interferes with the company’s recovery conditions.
In the special plan, debts can be divided into up to 36 equal and successive monthly installments, plus interest equivalent to the Special Settlement and Custody System (SELIC) rate, and may also include a proposal to reduce the value of the debts, with the first installment to be paid within a maximum of 180 days from the date of distribution of the request for reorganization.
However, it is worth noting that in ordinary judicial reorganization the deadlines for payment in installments can be more advantageous, since there is no limit on the number of installments established by law.
Another important point that needs to be highlighted is that, in the special plan, the Recovering Company must request authorization from the judge, who must hear the trustee and the Creditors’ Committee, if it wants to increase expenses or hire employees.
Thus, even if the debtor continues to manage his company as normal, he will be limited in his decision-making powers, which could hinder his decisions considerably, especially in cases of employee replacement.
It should be noted that the great attraction of special judicial reorganization is the exemption from calling a general meeting to deliberate on the reorganization plan, which entails a high cost to be borne by the company being reorganized, not to mention the risks arising from fluctuating moods and macroeconomic conditions. It should be added that, in ordinary judicial reorganization, the holding of a general meeting is provided for in several cases.
However, it should be emphasized that if more than half of the creditors subject to the special procedure express their opposition to the request for reorganization, the claim should, in theory, be dismissed, with the consequent decree of the debtor’s bankruptcy, although some judges may relax this understanding in order to achieve the reorganization objective which, as we have seen, is aimed at maintaining the source of production, workers’ jobs and creditors’ interests.
Negotiation with creditors before the plan is submitted is essential, as it can prevent them from opposing the request for reorganization.
In any case, the majority view is that the objection to the plan must be sufficiently substantiated to be accepted, avoiding abuse of power on the part of the creditors.
In order to file for special judicial reorganization, in addition to meeting the requirements common to the ordinary procedure, the debtor must have been carrying out its activities regularly for more than two (2) years and not have been granted judicial reorganization for less than five years. The original period was eight years, but was reduced by item III of article 48 of Complementary Law 147/2014.
Failure to comply with the obligations assumed in the reorganization plan presented by the debtor, in the manner and on the date set, could lead to the decree of bankruptcy, if the magistrate does not see the possibility of the company recovering.
Having made these points, it is important to note that although the special judicial reorganization plan was created to give micro and small companies less onerous and more simplified legal treatment, the option for this modality must be preceded by a careful assessment, notably of the nature of the credit that will be subject to its effects, the suitability of the means provided for in the law to achieve the reorganization objective, as well as the influence of the obstacles inherent in the special plan, such as the need for judicial authorization to hire employees.
It is necessary to consider the peculiarities of each company when choosing the judicial reorganization to be adopted, as the wrong choice can lead to high costs for the company being reorganized and make it impossible for it to recover economically, which will inevitably lead to its bankruptcy.
[1] SEBRAE. Small businesses in numbers. SEBRAE, São Paulo. Available at:<http://www.sebraesp.com.br/index.php/234-uncategorised/institucional/pesquisas-sobre-micro-e-pequenas-empresas-paulistas/micro-e-pequenas-empresas-em-numeros>. Accessed on: January 26, 2016.
[2] CNI – NATIONAL CONFEDERATION OF INDUSTRY. Microenterprise and Small Business. Available at:<http://www.portaldaindustria.com.br/cni/cni-em-acao/microempresa-e-empresa-de-pequeno-porte/2012/07/1,4716/microempresa-e-empresa-de-pequeno-porte.html>. Accessed on: 26 Jan. 2016.
[3] G1ECONOMIA. Increase in requests for judicial recovery is the highest in 9 years. G1 Economia, São Paulo, 11 Jan. 2016. Available at:<http://g1.globo.com/economia/noticia/2016/01/aumento-em-pedidos-de-recuperacao-judicial-e-o-maior-em-9-anos.html>. Accessed on: January 26, 2016.
