In a recent decision1, the Superior Court of Justice (STJ) consolidated the understanding that private law foundations (which are non-profit organizations) do not have legal standing to file for judicial reorganization, under the terms of Law 11.101/2005, which regulates judicial reorganization and bankruptcies.
What the Superior Court of Justice says
The STJ pointed out that article 1 of the 2005 law, even after the changes introduced by Law 14.112/2020, does not include private law foundations among the entities eligible to file for judicial reorganization.
The court emphasized that granting this measure to non-profit entities would be unfeasible, as the legal provision does not cover them.
In addition, it was pointed out that such foundations already benefit from tax immunity, i.e. they don’t have to pay some taxes, and therefore allowing them to apply for judicial reorganization would entail a new payment to society, without an adequate analysis of the competitive and economic impacts this could generate, in addition to compromising legal certainty.
In this way, by restricting judicial reorganization exclusively to business companies, the STJ avoids an imbalance in the market, ensuring that this mechanism remains aimed at profit-making businesses.
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