Judicial Reorganization and Bankruptcy

When a company enters distress, time stops being a resource and becomes a risk. Every week without a decision erodes asset value, shortens cash and narrows the alternatives available. Law No. 11,101/2005 (the Brazilian Bankruptcy and Reorganization Act), especially after the reform introduced by Law No. 14,112/2020, considerably expanded the menu of solutions — pre-insolvency conciliation, out-of-court reorganization with a reduced quorum, DIP financing, sales of isolated productive units (UPIs). What decides the outcome, in practice, is rarely the choice of instrument. It is how early that choice is made.

On the other side, creditors face the mirror-image problem: finding out early whether their claim is subject to the collective proceeding, whether their security survives the process, and whether negotiating is worth more than enforcing.

Who we act for

• Companies in financial distress, in structuring an out-of-court restructuring or filing for judicial reorganization
• Individual creditors and creditor groups, in filing and defending claims and acting in the General Meeting of Creditors and the Creditors’ Committee
• Financial institutions and secured or fiduciary creditors, in establishing that claims fall outside the proceeding and in enforcing security
• Distressed-asset investors, in acquiring claims, assets and isolated productive units
• Rural producers, in the judicial reorganization governed by §§ 2 and 3 of Art. 48 of Law No. 11,101/2005
• Partners, officers and board members of companies in crisis, regarding their personal exposure

How we work

We have acted since 2005 on both sides of insolvency proceedings and also, by judicial appointment, as court-appointed judicial administrator (administrador judicial) — a practice described in Judicial Administration and Court-Appointed Mandates. That dual experience is what structures our method: having conducted claims verification, chaired creditors’ meetings and monitored plan compliance, we can anticipate where a plan will stall, which objection the court is likely to uphold and which clause will not survive confirmation.

In practice, this means starting with a mapping of the liabilities before discussing instruments: separating what is subject to the collective proceeding from what falls outside it, identifying which security interests withstand Art. 49, § 3, and only then deciding whether the path is bilateral negotiation, out-of-court reorganization (Art. 161) or judicial reorganization.

Insolvency proceedings usually demand simultaneous workstreams — labour, tax, environmental, litigation — in different judicial districts. For each case we assemble the project team with partner lawyers in the locations and specialties the liabilities require, keeping strategy under single coordination.

Scope of work

• Liability diagnostics and classification of claims by class (Art. 41)
• Structuring of bilateral restructurings and out-of-court reorganizations
• Drafting, negotiating and defending judicial reorganization plans (Art. 50)
• Representation in the General Meeting of Creditors and the Creditors’ Committee
• Proofs of claim, challenges and claim discrepancies
• Defence of claims backed by fiduciary security, finance leases and conditional ownership (Art. 49, § 3)
• Enforcement of security and credit-preservation measures
• Structuring and acquisition of isolated productive units — UPIs (Arts. 60 and 141, II)
• Structuring of DIP financing (Arts. 69-A to 69-F)
• Procedural and substantive consolidation disputes (Arts. 69-G to 69-L)
• Bankruptcy petitions, defence against bankruptcy petitions and inclusion in the general list of creditors
• Pre-filing or incidental conciliation and mediation (Arts. 20-A to 20-D)

Related practice areas

Judicial Administration and Court-Appointed Mandates · Corporate Law and Commercial Contracts · Agricultural Law · Arbitration and Litigation

To discuss a specific matter, please get in touch and schedule a consultation.