Amanda Couto
Trainee at Marcos Martins Advogados
A company that provides interstate passenger transportation services has asked the reorganization court to withdraw the amounts deposited in the case file from auctions to fund the operation. In its pleadings, it claims to have suffered a drastic reduction in activity due to the social isolation measures imposed by the government authorities. It also presented figures for the drop in income from its activities and estimated the costs necessary to maintain the operation until August 2020.
The judge in charge of the case authorized the company to use 80% of the money to fund its operation, claiming that “with the survival of the entire social context caused by the COVID-19 pandemic, there was a drastic reduction in the volume of ticket sales, due to the decrease in passenger traffic and the closure of some state borders, and this situation has remained until now.”
He also pointed out that
it is necessary to adapt the judicial reorganization process to its object (social benefits of the company described in art. 47 of the law) and its subjects (creditors who must discuss the direction of the activity and the debtor who must have the opportunity to demonstrate the viability of the company), so that insolvency law can be fully applicable in this situation of abnormality caused by the COVID-19 pandemic.
The Magistrate also stated that the company is an “economic structure with recovery potential”, which justifies granting the measure and thus avoiding the bankruptcy of the Recovering Company.
