BRAZIL Law and Practice Contributed by: Thiago Fernandes Chebatt and Luiz Eugênio Araújo Müller Filho, Müller Chebatt Advogados
7.10 Expedited Restructurings Expedited outcomes are possible in Brazil when terms are substantially pre-negotiated with key creditor groups before a filing and then implemented through judicial reorganisation or, in narrower cases, through a court-homologated out-of-court reorganisation. The limiting factor is usually creditor mapping and the abil - ity to secure sufficient support early, particularly from financial and secured creditors. Although Brazil does not have a single “pre-pack” regime identical to some jurisdictions, practice has developed to approximate pre-pack dynamics through early lock-ups, co-ordi - nated disclosure and rapid plan submission once a filing occurs. The enforceability of restructuring sup - port and voting agreements is context-dependent and must be drafted with care to align with court- supervised voting and public policy constraints. When done properly, pre-negotiation can materially reduce value erosion by compressing the period of opera - tional uncertainty.
cial reorganisation provides the benefits of a stay and a class voting framework to bind dissenters, but it also introduces delay and litigation risk, so lenders weigh the trade-off carefully. In-court processes can facili - tate asset sales or broader balance sheet solutions, but they require disciplined creditor co-ordination and a defensible plan structure. In many cases, the practi - cal difference between out-of-court and in-court suc - cess is whether cash flows can be stabilised early enough to preserve enterprise value. 7.9 Dissenting Lenders and Non-Consensual Restructurings Dissenting lenders are primarily addressed through the mechanics of judicial reorganisation, where class voting can bind dissenters if statutory thresholds and court requirements are met. Dissenters retain proce - dural and substantive protections, including the abil - ity to challenge classification, voting rights, unequal treatment within a class and plan provisions that vio - late mandatory principles or feasibility requirements. In practice, dissent often drives litigation over collat - eral treatment and guarantees, and it can delay imple - mentation even when a plan is approved. Private cred - it providers therefore seek early alignment through intercreditor arrangements, lock-ups and restructur - ing support frameworks where appropriate, while pre - serving the ability to contest a plan that improperly dilutes secured rights. The strategic emphasis is on combining negotiation leverage with litigation readi - ness to ensure the process remains disciplined and value-preserving.
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