BRAZIL Law and Practice Contributed by: Renata Iezzi, Nicole René Gomes e Cunha and Marcela Correa, Basch & Rameh
Exporting Repossessed Aircraft This has not prevented lessors and owners from exporting repossessed aircraft. In most cases, air - craft can be flown to locations outside Brazil without the prior issuance of a DU-E, which can be obtained after an aircraft has left Brazil. In 2019, this procedure was used with approximately 35 aircraft redelivered by a bankrupt airline. However, due to inconsistencies between the SRF offices in different locations in Brazil, some problems have arisen with repossessed aircraft that lessors intend to move out of Brazil prior to the issuance of a DU-E. Most cases were resolved without litigation, but there is a chance a lessor might need to seek a court order for removal. According to the Cape Town Convention, the SRF should assist authorised parties named in registered IDERAs to export aircraft. This has not yet occurred. Consequently, export procedures should be carefully reviewed on a case-by-case basis. A DU-E cannot be issued in advance; once issued, it is valid for a limited number of days. 2.8.13 Costs, Fees and Taxes Concerning Export of Aircraft There are nominal fees for DU-Es. 2.8.14 Practical Issues Related to Deregistration of Aircraft As mentioned in 2.6.1 Restrictions on Lessors’ Abili- ties , a lessor should confirm if it will need a certificate of airworthiness for export, since these can only be obtained prior to deregistration. Therefore, when deal - ing with repossessed aircraft, it is preferable for the next registry to be one that does not require a certifi -
Article 199 of the Bankruptcy Law relates specifical - ly to commercial aircraft leases, and stipulates that rights under aircraft (and engine) leases are not sub - ject to suspension or stay due to a judicial recupera - tion proceeding. In addition, claims arising under such leases are excluded from judicial recuperation pro - ceedings. Thus, a lessee under judicial recuperation may not prevent or delay lessors from repossessing leased aircraft unless the lessee is up to date with its obligations under the relevant lease. Furthermore, the Cape Town Convention became effective in 2013 when Brazil adopted Alternative A. A close analysis of Cape Town Convention Aircraft Protocol Article XI(2) demonstrates that there is no applicable stay period against lessor repossession. This zero-day stay applies to leases only. Aircraft financed through other means, such as mortgages, are subject to the 30-day waiting period contained in Brazil’s Cape Town Convention Declarations. 2.9.2 Overview of Relevant Types of Voluntary and Involuntary Restructurings, Reorganisations, Insolvencies and Receivership There are two main types of insolvency proceedings provided by the Brazilian Bankruptcy Law: • reorganisation under the auspices of a bankruptcy court, called judicial recuperation (Brazil’s rough equivalent to the US Chapter 11); and • liquidation (similar to Chapter 7). See 2.9.1 Overview of Relevant Laws and Statutory Regimes Governing Restructurings, Reorganisa- tions, Insolvencies and Liquidations regarding the laws and articles relevant to a lessee domiciled in Brazil. If a Brazilian airline seeks judicial recuperation protec - tion, leases will not be set aside. In a 2019 case (Oceanair, dba “Avianca Brasil”), how - ever, lessors were erroneously stayed from repossess - ing aircraft for approximately 120 days, during which Oceanair paid one month’s rent. The last court deci - sion on the merits in the Oceanair matter upheld the lessor’s right to repossess aircraft, so there should be
cate of airworthiness for export. 2.9 Insolvency Proceedings 2.9.1 Overview of Relevant Laws and
Statutory Regimes Governing Restructurings, Reorganisations, Insolvencies and Liquidations Insolvency proceedings are regulated in the Brazil - ian Bankruptcy Law (2005; amended 2020), includ - ing restructurings, reorganisations, insolvencies and liquidations.
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