Thyago Rodrigo da Cruz
Lawyer at Marcos Martins Advogados
There is a lot of discussion these days about the legality of a judicial reorganization plan providing that, in the event of non-compliance with any of its provisions, the business debtor benefiting from the aforementioned contest of creditors, the respective trustee or even the creditors themselves can call, on an urgent basis, a new General Meeting of Creditors to deliberate on the viability of the company’s bankruptcy or even to debate any changes to the approved plan, thus avoiding a bankruptcy that would be harmful to everyone involved. The discussion is gaining strength especially because Law 11.101/2005, which governs the entire system of bankruptcies and judicial and extrajudicial reorganizations of companies in Brazil, is extremely restrictive in determining in its article 73, item IV, that “the judge shall decree bankruptcy during the judicial reorganization process for non-compliance with any obligation assumed in the reorganization plan, pursuant to paragraph 1 of article 61 of this Law”.
It should be noted that the legislator did not give the judge the possibility of considering the bankruptcy of a company that fails to comply with the obligations set out in its judicial reorganization plan. It is stated that “the judge will decree bankruptcy”, which is, in theory, the judge’s duty.
The beauty of the law lies in its nuances, which are subtly discovered through the interpreter’s firm commitment to analyzing the legal rule in accordance with the logic of the established system, providing the best solution to the apparent conflict between rules.
This is why, a long time ago, Carlos Henrique Abrão, one of our country’s leading scholars in the area of bankruptcy and judicial and extrajudicial company recoveries, when analyzing the aforementioned article 73, item IV, of Law 11.101/2005, warned that “the imperative tone of the wording deserves to be tempered between the reality of the company and the non-compliance found, so that a period is opened for the interested party to manifest and the purpose of clarifying, justifying the reason why it failed to comply with the determination”¹.
The reason behind this consideration is rightly the principle of preserving the company, established by article 47 of Law 11. 101/2005 and also the sovereignty of assembly decisions, which, by the way, are already positively influencing the decisions of the São Paulo State Court of Justice’s Reserved Chambers of Business Law, which are beginning to understand the possibility of analyzing the viability of a possible bankruptcy, whether by the General Assembly of Creditors (Interlocutory Appeal No. 2229786-18.2016.8.26.0000) or even by the judicial reorganization court itself (Interlocutory Appeal No. 2111038-90.2017.8.26.0000).
This is therefore a change in jurisprudential understanding which, despite being recent, is absolutely positive, benefiting not only the business debtor but, ultimately, the entire group of creditors and society itself, to the extent that the harmful effects immediately resulting from the conversion of judicial reorganization into bankruptcy, namely the closure of business activities, resulting in the consequent paralysis of the circulation of wealth, the end of tax-generating events and, above all, the extinction of countless jobs, are undoubtedly of no benefit to anyone.
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¹ABRÃO, Carlos Henrique. Comentários ao Capítulo IV: da convolação da recuperação judicial em falência. TOLEDO, Paulo Fernando Campos Salles de Toledo et al. (Coords.). Comentários à Lei de recuperação de empresas e falência. 4. ed. rev. and updated. São Paulo: Saraiva, 2010, p. 282.
