Fabiana Cristina de Arruda Cueva Soares
Lawyer at Marcos Martins Advogados
Article 47 of the Judicial Reorganization and Bankruptcy Law (Law 11.101/05) states:
The purpose of Judicial Recovery is to make it possible to overcome the debtor’s economic and financial 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 stimulation of economic activity.[1]
Thus, in the reorganization process, the principle of the relevance of creditors’ interests prevails, especially when they are at the forefront of the decision to approve, modify or reject the reorganization plan presented by the company under reorganization. In this respect, when the creditors decide to approve the Plan, it is clear that there has been an individual sacrifice for the benefit of the collective interest, with relevant consequences in the social context.
However, when the General Meeting of Creditors takes place, we often witness copious conflicts between creditors with highly differentiated economic powers and creditors with more modest claims.
This is where the big problem arises, since these creditors, by voting against the plan, jeopardize the will of the majority of creditors who, after weighing things up, have concluded that the Reorganization Plan will meet their expectations of receiving their credits.
In this context, this creditor with large claims, by voting, does not reveal an honest or loyal concern for the satisfaction of his claim, in the words of Gabriel Saad Kik Buschinelli,[2] but rather conduct that is inappropriate for the improvement of the company in a state of crisis, in real confrontation with the interests of the other creditors, the Recovering Companies themselves and the recovery universe as a whole.
It is understandable that the rejection of the Recovery Plan, in the meantime, represents not only the annihilation of all the efforts made for the real recovery of the company, but also a clear abuse, which results in an outrage against the spirit of the law.
It is not uncommon to call on the Judiciary to resolve situations like these. The legal profession has faced up to this in practice and has demonstrated the need to request judicial intervention for approval of the Plan, through legality control, with the aim of avoiding abuses committed by these creditors, who represent a significant part of the credits.
Thus, once invoked, the reorganization court makes the vote of the other creditors triumph, disregarding the abusive votes of those who have a position capable of hindering the approval of the Plan.
The eminent professors João Pedro Scalzilli, Luiz Felipe Spinelli and Rodrigo Tellechea, in their book Recuperação de Empresas e Falência, also express their opinion on the position of these creditors who do not indicate a minimum of reasonableness and loyal intention to satisfy their claims:
the vote marked by this specific economic-individual function, does not cease also to represent, precisely that it is subverted by abuse, therefore to be avoided, an essential instrument for the realization of the principle of the preservation of the company, a basic value guideline of Brazilian competition law.[3]
Faced with the challenges inherent in the reorganization process, Marcos Martins Advogados is prepared to go to the courts to seek approval of the Judicial Reorganization Plan when faced with voting abuses, so as not to allow purely selfish positions taken by a particular creditor or creditors to prevail, to the detriment of the interests of society.
[1] Article 47 of Law 11.101/2005.
[2] Buschinelli, Gabriel Saad Kik. Abuse of voting rights at the general meeting of creditors. São Paulo: Quartier Latin, 2014, p. 74.
[3] Scalzilli, João Pedro; Spinelli, Luis Felipe and Tellechea, Rodrigo. Business Recovery and Bankruptcy: theory and practice in Law 11.101/2005. São Paulo: Almedina, 2016, p. 207.
