In Brazil, Federal Law 11,101/2005, known as the Brazilian Bankruptcy and Restructuring Law (BRL), came into effect on 9 June 2005, bringing significant changes to the legal treatment of Brazilian companies that are insolvent or facing financial difficulties.

Throughout its 11 years of effectiveness, several periods of judicial restructuring trends can be identified, directly related to the economic and financial crisis in Brazil and the rest of world, as well as the evolution of the proceedings and case law. The periods are:

  • a first period: airline companies, such as Vasp, Varig and BRA;
  • b second period: meatpacking and agribusiness industries, such as Arantes, Independencia, Quatro Marcos and Nilza;
  • c third period: electric power companies, such as Celpa and Grupo Rede;
  • d fourth period: oil, gas and mining companies, such as OGX, OSX and Eneva;
  • e fifth period: infrastructure, engineering and communication companies, such as OAS, Galvão Engenharia, Schahin, Sete Brasil and Oi.

In terms of the proceeding itself, smaller companies tend to be more successful in restructurings, since the smaller company’s structure and its number (and size) of creditors tend to facilitate the process. However, for both small and large companies, the financial conditions in which the company entered the restructuring proceedings will be the decisive factor for a possible recovery.

Recently, the Brazilian investigation known as Operação Lava-Jato (Operation Car Wash) led to a political and economic crisis without precedent in Brazil, leading construction companies and companies in the infrastructure sector involved in the investigation to request its judicial restructuring, as mentioned in the fifth period above.

A consequence of such political and economic crisis was that, according to Serasa Experian, 2015 had a record number of judicial restructuring requests since the BRL came into effect, with an increase of 55.4 per cent compared with 2014. The first semester of 2016 already established a new record in judicial restructuring requests, with an increase of 87.6 per cent compared with the first semester of 2015.


i Brief description of the proceedings

The BRL applies to entrepreneurs and business companies in general. It is not applied to state-owned companies, mixed-capital companies, financial institutions, insurance companies and some other entities expressly excluded by the law that are subject to specific insolvency proceedings.

The BRL establishes three major mechanisms that may apply to companies in difficulty: (1) judicial restructuring; (2) out-of-court restructuring; and (3) forced liquidation. As one of its main features, the BRL offers the debtor company flexibility and in some situations continuity of management and an opportunity for rehabilitation.

The mechanisms of judicial restructuring and out-of-court restructuring, which replaced the old concordata (a court-relief system for debtors), are used when a particular business can be maintained in operation, even with the change of subject or reduced operation, and may overcome its financial crisis.

The forced liquidation proceeding shall apply when a particular business is no longer viable. In this case, as a rule, the debtor (either an individual businessman or a company) is removed from its activities and the existing assets are attached and sold by a judicial administrator (which may continue the debtor activities if it is understood by the Bankruptcy Court to be beneficial for the creditors). Any proceeds derived from the sale of assets are distributed among different creditors according to a preference order established by law.

Judicial restructuring proceeding

Any debtor that meets certain conditions specified in the BRL may apply for a judicial restructuring proceeding. The request must be accompanied by several documents and information, including explanations about the financial difficulties faced by the debtor, financial statements, a list of creditors and a list of employees.

If the application is in the proper form, the court will authorise the initiation of judicial restructuring proceeding. A public notice will then be included in the official gazette containing, among others: a summary of the request made by the debtor; a list of creditors; and a warning about the applicable term for any challenges to the list of creditors, including requests for adjustments and inclusions.

In relation to the judicial restructuring proceeding, the BRL establishes that:

  • a only the debtor may file a court application for restructuring;
  • b there is a 180-day stay period for claims subject to the proceeding (the ones existing at the date of the filing, whether matured or not, with few exceptions provided by law), but it is not automatic upon filing, and applies only if and when the court authorises the proceeding;
  • c tax and a few other types of debt are not subject to the proceeding and creditors holding such debt may initiate or proceed with collection lawsuits against the debtor;
  • d the BRL does not provide for a specific status such as ‘debtor in possession’ as in Chapter 11 of the US Bankruptcy Code, and, as a general rule, the existing management of the debtor continues to operate the business and regular business acts are allowed, but any sale of ‘permanent’ assets is only allowed if authorised by the Bankruptcy Court or approved in the reorganisation plan approved by the creditors;
  • e the appointment of a creditors’ committee is optional and has more of a supervisory than decision-making role;
  • f while a judicial administrator nominated by the Court monitors the activities performed by the debtor, he or she mainly manages the judicial procedure acts, instead of replacing the management of the debtor company in operating the business;
  • g a judicial manager is only appointed when the debtor’s existing management has been removed from their positions in exceptional legal cases; and
  • h the general meeting of creditors is essential to the process, since it has the power to approve or reject the reorganisation plan.

In the course of judicial restructuring proceedings, in principle, there will be no change in management. Therefore, the managers of the debtor will retain their positions, although working under the supervision of the Creditors Committee (if any) and a judicial administrator appointed by the court.

In certain circumstances, however, managers shall be removed from their positions, including when: there are indicia of bankruptcy crimes; they have acted with willful misconduct or engaged in fraudulent schemes against creditors; they have been making personal expenditures that are not compatible with their income; or their removal is specified in the reorganisation plan.

The debtor company shall submit a reorganisation plan within 60 days from the publication of the court order authorising the initiation of the proceeding. If the plan is not submitted, the debtor shall be declared bankrupt (as forced liquidation). The reorganisation plan must contain: a detailed description of restructuring mechanisms to be used, which may include debt rescheduling, corporate reorganisation, transfer of corporate control, partial sale of assets, leasing of going-concerns, and a series of other measures; demonstration of the economic feasibility of the debtor’s business; and a report on the debtor’s assets prepared by an expert appraiser or company. The plan cannot provide that overdue labour credits and credits deriving from accidents at work will be paid in a term longer than one year from the ratification of the approved plan by the Bankruptcy Court.

Creditors will be informed about the reorganisation plan and the applicable term to challenge the plan through a public notice. If any objection to the proposed plan is submitted by any creditor, the court shall call a General Meeting of Creditors. In the meeting, creditors may approve the plan as originally proposed, approve a modified version of the plan, as long as there is no opposition from the debtor and no harm to absent creditors, or reject the plan, in which case the debtor should be declared bankrupt (as forced liquidation).

The reorganisation plan may provide for a judicial sale of branches or individual going-concerns belonging to the debtor. The judicial sale may take the form of an auction, be effected through proposals submitted in sealed envelopes, or be a combination of the former two options.

Once the judicial sale is effected, the relevant branch or going-concern will, in principle, be free and clear of any liens and encumbrances, and the purchaser will not succeed the debtor with respect to any indebtedness. As a consequence, creditors from a debtor that is subject to judicial restructuring will not be able to claim any amount from the purchasers of branches or going-concerns, and the corresponding assets will not be attached to satisfy their credits. Therefore, creditors will simply retain their original claims against the debtor.

Any reorganisation plan must be approved by the following four categories of creditors in a General Meeting of Creditors: (1) labour creditors and creditors from accidents at work; (2) secured creditors; (3) unsecured creditors, creditors with special or general preference, and subordinated creditors; and (4) small business creditors.

In the first and fourth classes of creditors, approval is achieved with the favourable vote of the majority of creditors present at the meeting, regardless of the amount of their credits. In the other two classes, approval is achieved with the favourable vote of both creditors representing more than half of the credit amounts represented at the meeting and the majority of creditors present at the meeting.

If certain vote combinations specified in the BRL are recorded in the General Meeting of Creditors, the court may grant the judicial restructuring, even when the plan was not approved pursuant to the quorum requirements explained above, if some requirements are fulfilled.

Judicial restructuring proceedings shall remain in place until all obligations maturing within two years that are specified in the plan are fully complied with by the debtor. If the debtor fails to comply with any obligation within such period, it shall be declared its forced liquidation. Any obligation unfulfilled after the two-year period entitles creditors to initiate collection proceedings or request the declaration of the debtors’ forced liquidation.

Verifying that all obligations maturing within two years were fulfilled, the Court shall order the termination of judicial restructuring proceeding. It should be noted that, although no longer subject to court proceedings, the debtor remains liable for all obligations specified in the plan that are still outstanding.

Out-of-court restructuring proceeding

Any debtor that meets certain conditions specified in the BRL may propose and negotiate with its creditors an Expedited Reorganisation Plan, also called an Out-of-court Reorganisation Plan, and request its judicial ratification, with the possibility of enforceability towards creditors whose credits are treated in the Plan and who did not adhere to it, if a certain quorum of adherence is obtained.

In other words, despite being deemed ‘out-of-court’, the plan must be ratified by a Bankruptcy Court to bind creditors who did not even adhere to the plan. This does not mean that the plan will be conducted within the context of court proceedings. It just needs to be ratified.

To produce effects with respect to all creditors contemplated in the plan, including those that have not expressly adhered to the settlement, the BRL provides that the ratified plan must have been approved by creditors representing more than three-fifths of credits in each species of creditors contemplated by the plan.

Once the debtor requests the ratification of the plan, the creditors will have the opportunity to challenge such ratification. Nevertheless, any challenges may be based solely on an alleged illegality or a failure by the debtor to comply with all necessary legal requisites or formalities.

If the challenges are not accepted by the Court, the Out-of-court Reorganisation Plan will be ratified and be applicable to all creditors contemplated in the Plan. The Plan’s provisions and obligations are judicially enforceable after the ratification decision.

Bankruptcy/forced liquidation

According to the BRL, debtors that are facing a financial crisis and do not meet the conditions to benefit from judicial restructuring or out-of-court restructuring proceedings should request the declaration of their own forced liquidation. The prerequisite of a forced liquidation request is related to the company’s financial and economic situation. In other words, the main condition that shall be analysed by the Court in terms of the forced liquidation declaration is the self-management ability of the company as well as its financial and economic viability.

In this case, the debtor has the duty to explain the reasons why the company cannot continue with its economic activities. Further, the debtor must present to the Court a relation of several documents, which are listed in the BRL.

In addition, any creditor may request the forced liquidation of a debtor in certain circumstances, including the following:

  • a failure by the debtor to comply with payment obligations in excess of 40 times the prevailing Brazilian minimum wage, provided that a protest with a public registry has been lodged with respect to the corresponding indebtedness. To reach the above threshold, two or more creditors can combine their credits;
  • b the existence of debt collection proceedings against the debtor where no assets have been attached or no money has been deposited to secure payment of the relevant obligations;
  • c the debtor has engaged in actions such as unjustified sales of assets or fraudulent schemes against the interests of creditors; and
  • d failure by the debtor to comply with obligations under a judicial reorganisation plan.


The forced liquidation proceeding is led by the Bankruptcy Court, the public prosecutor, the judicial administrator and creditors. The Bankruptcy Court will appoint the judicial administrator that will manage the bankruptcy estate, attach and sell all the company’s assets, so there is no need for the company to appoint a liquidator or administrator (and no due diligence required).

According to the BRL, the payment to creditors in a forced liquidation proceeding is made after all restitutions and payments of non concurrent credits and should observe the list of creditors produced by the Court according to the order of preference under the BRL.

The order of preference for payments to creditors in the forced liquidation proceeding established in the BRL is as follows:

  • (1) labour claims of up to 150 times the prevailing minimum wage for each creditor, and claims deriving from accidents at work;
  • (2) secured credits up to the value of the relevant collateral;
  • (3) tax debts;
  • (4) credits with special privileges;
  • (5) credits with general privileges;
  • (6) unsecured credits;
  • (7) contractual penalties, tax penalties and fines deriving from violations of legal provisions; and
  • (8) subordinated credits (as considered by law or agreement, and shareholders’ and certain managers’ credits).

Some credits should be prioritised and paid before all of those mentioned above, in the order set forth below:

  • (1) the compensation payable to the trustee and his or her assistants, and labour-related claims or occupational accident claims referring to services rendered after the decree of the forced liquidation;
  • (2) sums provided to the bankruptcy estate by the creditors;
  • (3) expenses with schedules, management, asset sale and distribution of the proceeds, as well as court costs of the forced liquidation proceedings;
  • (4) court costs with respect to actions and enforcement suits found against the bankruptcy estate; and
  • (5) obligations resulting from valid legal acts performed and contracts agreed during the judicial restructuring proceeding, such as loans and continuity of supply, or after the decree of the forced liquidation, and taxes relating to triggering events postdating the decree of the forced liquidation.


In addition, if the debtor is in possession of assets (including money) that belong to third parties at the time the forced liquidation is decreed (by a leasing or fiduciary sale agreement or advance of foreign exchange currency agreement, for example), rightful owners may request restitution of their assets before the payment of any creditor, which may be understood also as a priority over the order of preference of the BRL. This is the case because such assets (which may include money) are understood by law and case law to not belong to the debtor, and, therefore, cannot be included as part of the bankruptcy estate.

After the forced liquidation is judicially decreed, the debtor company will be liquidated so that its assets can be attached and sold by the judicial administrator, and the amount obtained will pay the creditors. Only after the extinguishment of all obligations may the shareholders request the rehabilitation of the company, in order to explore its activity once again.

All the debtor company’s obligations will be considered extinguished if it is able to pay all of its debts, if it is able to pay up to 50 per cent of its unsecured debts, after five years of the end of the proceeding, or after 10 years of the end of the proceeding if there was any conviction for a bankruptcy crime.

The forced liquidation proceeding is a case of total judicial dissolution of the company. If, after the selling of all assets and the payment of creditors, there is any amount left – which is very difficult to identify – this amount will be given to the shareholders in proportion to their participation in the company’s equity.

ii Taking and enforcement of security

In Brazil, there are several types of security over assets. The main ones are: mortgage (over real state assets), pledge (over moveable assets) and fiduciary transfer of assets (real estate and moveable).

In judicial restructuring proceedings, credits secured by mortgage and pledge and existing at the date of the filing will comprise the secured creditors category, to the extent of the security it holds. Any use or disposal of collateral by the debtor should be approved previously by the relevant secured creditor. All the categories of creditors are paid according to what is established in the reorganisation plan. Therefore, the secured creditors subjected to the proceeding do not hold a different means for seeking remedies for protection of their collateral, other than negotiating the payment of the respective credit under the reorganisation plan. If the secured credit is not subject to the proceeding because of time limitation, it can be enforced.

Some creditors are not subjected to the judicial restructuring proceeding because of the sort of security they hold: creditors secured by fiduciary transfers of assets, lessors, sellers in irrevocable real estate purchase agreements with instalment payments, and sellers of goods with title retention. This is because in such situations, the creditor is indeed the actual owner of the assets, even when the assets are being used by the debtor. Thus, the original contractual arrangements and corresponding debts remain in place, and the guarantee can be enforced in case of default. The only restriction is that for a period of 180 days from the authorisation of the judicial restructuring proceeding by the Bankruptcy Court, the sale or removal of assets that are essential to the activities carried out by the debtor is prohibited. Currently, the most relevant debate on this topic refers to whether fiduciary assignments of credits should be included in the exception above.

In forced liquidation proceedings, credits secured with mortgage and pledge (limited to the value of the collateral) rank behind labour credits (limited to 150 times the prevailing minimum wage) and credits deriving from accidents at work, but ahead of tax credits and unsecured credits. Also, credits with fiduciary transfer of assets are not subject to the legal preference order of payment in the forced liquidation proceeding and may request the restitution of their assets before the payment of any creditor.

For credits secured by mortgage or pledge that are not subject to the proceeding, the creditor may, if all requirements are fulfilled, file an enforcement proceeding against the debtor company by means of enforcement of the security and the credit, pursuant to the Brazilian Code of Civil Procedure. In such an enforcement proceeding, the creditor is able to seize and attach the guarantees granted by the debtor company and other assets, up to the full amount of the debt if necessary. The judicial enforcement proceeding may take a couple of years to be concluded, especially if there is a judicial restructuring in course, if enough assets are duly seized, attached and sold. If not, and the creditor has difficulty finding assets of the debtor company, it may take several years.

For enforcement of fiduciary transfer of real estate assets, when the debtor is not under forced liquidation, the mechanism applicable in case of default is provided by Law 9.514/97. The debtor shall be notified by the Real Estate Registry Office, upon request of the creditor, to pay the total debt and solve the arrears within 15 days. The payment has to be made to the Real Estate Registry Office, to be delivered within three days to the creditor, discounted the costs for collection and summons.

If the debtor does not make the payment, the Real Estate Registry Office shall certify this fact and register the consolidation of the asset ownership in the name of the creditor, after the payment of the correspondent transfer tax. The creditor will then have 30 days to promote public auction for the forced sale of the property.

In a first auction, the property can only be sold for an amount equal to or higher than the value of the asset stated in the agreement. If the asset is not sold in a first auction, another auction will be held within 15 days. In the second auction, the property can only be sold for an amount equal to or higher than the amount of the debt and related charges and expenses.

If the selling of the asset in a public auction occurs, the creditor will give the debtor the amount left after debt settlement and related charges and expenses are solved. If the property is not sold in the second auction, the claim or credit will be extinguished and the ownership of the real estate asset, which had been consolidated in the name of the creditor, will remain with him or her.

Also, Law 9.514/97 provides the possibility for the debtor to offer the creditor its right to the property of the asset, after the default and proceedings for the early maturity of the whole debt amount, making the proceeding of public auction dispensable. According to the referred legal proceeding, there is a risk that after the sale of the real estate asset in public auction and with the payment of the price, it could be considered a full discharge of all secured obligations and debt amounts, even if the outstanding debt is higher than the proceeds obtained, considering what is provided in Law 9.514/97. Recent case law defends that the full discharge only applies to housing finance.

For operations of fiduciary transfer of moveable assets by financial companies, the applicable proceeding is the one provided in Law 911/69, being the adequate proceeding to obtain the possession of the asset a lawsuit for search and apprehension of the assets. For operations of fiduciary transfer of moveable assets by non-financial companies, the applicable law is the Brazilian Civil Code. It provides that, if the debt is not paid in due time, the creditor shall sell, judicially or not, the assets to third parties, use the price obtained to pay the debt plus charges and expenses, and deliver the balance to the debtor, if any. In this case, the Brazilian Civil Code provides that, if the price obtained with the selling of the assets is not enough to pay the debt, the debtor remains obligated to pay the remaining amount of the debt.

iii Duties of shareholders and directors of companies in financial difficulties

In forced liquidation proceedings, shareholders, controlling shareholders, directors and executive officers may be considered liable for debts and acts if the Court understands that some requirements have been fulfilled.

Regarding this topic, the BRL provides that the Bankruptcy Court may investigate and determine the shareholders’ and managers’ liability if it verifies that they performed any act or omission that contravenes Brazilian law – for example, corporate laws, tax laws and labour laws – regardless of the collection of the assets and impossibility to pay all the creditors of the company.

As an example, the Brazilian Corporate Law sets forth the definition and the rules of conduct that shall be observed by the controlling shareholder, and provides the liability rule applicable to the controlling shareholder. Also, the BRL provides the duties of the company’s directors and executive officers, and in case of violation of such duties or illegal acts in conducting the businesses, managers shall be deemed liable for their acts.

In principle, if the company’s shareholders or managers have contravened one of the legal provisions mentioned above, the Court may deem them responsible for certain obligations or acts.

The BRL predicts that in those cases, a responsibility lawsuit will begin in the Bankruptcy Court, and in this lawsuit, the defendant’s assets can be blocked in compatible amount to the damage caused, until the final judgment. The term for the filing of a responsibility lawsuit ends two years after the decision that ends the forced liquidation proceeding becomes unappealable.

According to the Brazilian Civil Code, the Court may disregard the company’s corporate veil if it considers that there was an abuse of its legal personality (in case of equity confusion and misuse of purpose). In this case, the shareholders would be considered liable for all of the company’s debts.

In limited liability companies, the shareholder’s liability is initially limited to the price of the stocks emission or to the full payment of the company’s capital (stock). The company’s estate cannot be confused with the shareholder’s estate, and the company is the only one that responds for their obligation.

The possibility of piercing the corporate veil was created as an exception to the limited liability of the shareholders, and once decreed by the judge, the shareholders shall respond with their estate for a specific obligation. This possibility is predicted on the Civil Code, and can also be applied to a company that is bankrupted.

The essential requirements are: abuse of the corporate veil, with deviation of the company’s purpose or estate confusion between company and shareholders. In each concrete case, the judge will analyse the presence of such requirements – these requirements are more objective than just ‘fraud’ or ‘abuse’, but the decision by the Court remains very subjective.

Finally, if the public prosecutor understands that the shareholders, officers or directors committed a bankruptcy crime, he or she may file a criminal action. The BRL sets out several criminal offences related to bankruptcy, whose penalties can vary from one to six years of imprisonment, plus a fine.

iv Clawback actions

In case of forced liquidation, the BRL contains a list of actions that shall produce no effects with respect to the bankruptcy estate, regardless of whether the parties were aware of the financial difficulties facing the debtor or whether there was any fraudulent intent. Such actions are deemed incompatible with the reasoning underlying the BRL. Accordingly, they may be disregarded automatically by the court or at the request of any interested party.

Actions considered ineffective include, for instance: payment of unmatured debts during the suspect period; payment of overdue debts effected during the suspect period in a manner that is different from what was established in the original agreement; the creation of security interests during the suspect period to secure payment of pre-existing indebtedness; and donations and other equivalent actions effected within the period of two years preceding the forced liquidation.

In addition to those actions deemed automatically ineffective, any action aimed at intentionally defrauding creditors may be revoked. In this case, however, the party seeking the revocation must prove, in a separate lawsuit, that there was a fraudulent scheme arranged between the debtor and a third party, and that the bankruptcy estate actually suffered damages as a result of such scheme.

The bankruptcy legal term, also known as the ‘suspect period’ or ‘look-back period’, shall be set by the court upon the declaration of forced liquidation. It may retroact until 90 days before: the forced liquidation request; the application for judicial restructuring later converted into forced liquidation; or the first protest for non-payment lodged against the debtor.


The BRL has been in effect for 11 years. In this time, it has only seen a few amendments, modifications and complements. The mains ones are:

  • a Complementary Law No. 147/2014, which amended the BRL in relation to ‘small businesses’ (which are categorised as such by Brazilian law based on yearly revenues). Small businesses are now a specific class of creditors and are classified as credits with special privileges, and now have specific provisions when companies are debtors in insolvency proceedings;
  • b Federal Law No. 13.043/2014, which provides for a specific federal tax relief system for companies under judicial restructuring proceeding (REFIS). To be able to benefit from this relief system, some specific requirements must be fulfilled (such as not judicially discussing the tax debt to be renegotiated), and if the request is approved by the Federal Tax Authorities, the debtor company will be able to pay its tax debts in up to 84 instalments. The first 12 instalments must correspond to 0.666 per cent of the debt; from the 13th to the 24th, the instalments must correspond to 1 per cent of the debt; from the 25th to the 83rd instalments, each shall correspond to 1.333 per cent of the debt; and the last instalment must correspond to the remaining amount of the debt. Also, the debtor company can only request this benefit once in each judicial restructuring proceeding, and it must refer to all of its federal tax debts.


As mentioned above, Operation Car Wash, among other factors, led Brazil to a severe political and economic crisis, and several important infrastructure companies in Brazil requesting judicial restructuring proceedings. The most significant restructuring in 2015 was the OAS judicial restructuring proceeding, in which the debts exceeded 10 billion reais. It was a very innovative judicial restructuring because of its debtor-in-possession financing structure, right to top the bids in the judicial auction and a stalking-horse proposal, which is why the case won Latin Lawyer’s Deal of the Year Award in the Restructuring category in 2015.

Recently, the Oi group filed for judicial restructuring, with debts that exceeded 65 billion reais – the biggest judicial restructuring in Brazil to date. This judicial restructuring is sure to set new parameters and standards for such proceedings in Brazil, including changes in case law, that has evolved in the past years.


The BRL, or any other Brazilian laws, do not contain any specific rules dealing with extraterritorial bankruptcy or insolvency proceedings or provisions regarding the recognition of other countries’ statutory processes, unlike Chapter 15 of the US Bankruptcy Code, for example. In fact, bankruptcy and restructuring proceedings involving Brazilian companies, with its centre of main interest in Brazil, must necessarily be administered by a Brazilian Court. As a result, any effects and consequences of possible ancillary or parallel proceedings in foreign jurisdictions will have to be dealt with on a case-by-case basis, subject to applicable conflicts of law provisions in cross-border matters.

In addition, Brazil has not adopted the UNCITRAL Model Law or any other treaty related to EC Regulation regarding insolvency proceedings.

There are, however, provisions in Brazil that allow recognition of foreign decisions by the Superior Court of Justice, once legal requirements are fulfilled, but not recognition of processes themselves. The main requirements are:

  • a the decision must have been rendered by a competent court;
  • b the parties must have been duly summoned;
  • c the decision must be final, binding and unappealable and have all the requirements to be able to be enforced in the jurisdiction in which it was rendered;
  • d the decision must have been certified by a Brazilian Consul and sworn translated; and
  • e the decision must be in compliance with the Brazilian public policy, sovereignty and principles of morality.


The current economic and political crisis in Brazil, the volatility in the global market and the rise in corporate restructurings have had no impact on Brazil’s insolvency regime so far. However, these events have had significant impact on the analysis made by the courts when judging appeals related to insolvency proceedings, with stricter control over the companies. The most important amendments currently envisaged are:

  • a Legislative Bill No. 314/2014, which intends to alter the name of the BRL to the ‘Ramez Tebet Law’. It has already been approved by the Brazilian Senate and is currently in the Brazilian House of Representatives for analysis. Ramez Tebet was a former senator and participated significantly in the drafting of the BRL; and
  • b Legislative Bill No. 5587/2013, from the Brazilian House of Representatives, already sent to the Senate under No. 191/2015, which adds to the BRL a paragraph regulating the extension of the bankruptcy effects to affiliated companies and companies controlled by the debtor, when there is strong influence of a corporate economic group in the other, with the intention of harming creditors.


1 Luciana Faria Nogueira is a partner and Gabriela Martines Gonçalves is an associate at TozziniFreire Advogados.