In a recent decision, the 3rd Panel of the Superior Court of Justice (STJ) established that, in exceptional circumstances, the recognition of an economic group allows the judge to include companies in the active party of a Judicial Recovery Action (“RJ”).
This decision stems from the Dolly Group‘s RJ, in which the inclusion of the company Ecoserv in the active pole of the process, initially initiated by only three companies in the group, was determined.
The active position, in simple terms, corresponds to the party initiating the lawsuit. In the context of a Judicial Recovery, it is the companies that file the petition to reorganize their debts.
On the STJ’s understanding
In this way, the STJ has settled a controversial understanding of the Judicial Reorganization and Bankruptcy Law (Law 11.101/2005), reaffirming the possibility of so-called “substantial consolidation ” – joint treatment of two or more companies as a single legal entity due to confusion between assets and liabilities.
The winning vote, delivered by Justice Nancy Andrighi, defended the need for a unified approach to the assets and liabilities of different debtors belonging to the same economic group.
The aim is to prevent the group undergoing Judicial Reorganization from manipulating the law to select which assets and liabilities will be subject to the process. In other words, it prevents the group from selecting which debts and assets will be included in the reorganization process, ensuring that creditors (those who have amounts to receive) are not unduly harmed.
From the STJ’s point of view
This position has closed loopholes in the Judicial Reorganization and Bankruptcy Law, making it more difficult for debtors, if they are acting in bad faith, to protect their own interests to the detriment of creditors by evading their obligations.
In other words, this decision helps to close loopholes in the law, preventing companies from using illegal maneuvers to avoid paying their debts.
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