BRAZIL Trends and Developments Contributed by: Marcelo Lucidi, Henrique Forssell, Octaviano Duarte and André Marcassa, Duarte Forssell Advogados
the termination of the non-main proceedings or after it is verified that, in the latter, there are no remaining liquid assets. Co-operation between courts Upon recognition of a foreign proceeding, the Brazilian court shall co-operate to the maximum extent possible with foreign courts or foreign representatives. The Brazilian court is entitled to communicate directly with, or to request infor - mation or assistance directly from, foreign courts or foreign representatives. How are Brazilian courts reacting to the new legislation? In less than five years since the new legisla - tion came into force, Brazilian courts have been receptive to the recognition of foreign insolvency proceedings, although a few questions remain. Freezing order over assets of Scottish debtor In a 2024 ruling, Judge Rapporteur Osmar Mohr from the State Court of Santa Catarina issued an order freezing all known assets of a Scottish individual who was subject to insolvency pro - ceedings in Scotland and was accused of dis - sipating and concealing assets worldwide. In the case, a liquidator appointed by a Scottish court applied for recognition of a sequestration proceeding in Brazil. Before the recognition in Brazil, this insolvency proceeding had already been recognised in the United States, England and Switzerland. However, the recognition was initially rejected on the grounds that it would require prior homolo - gation from the Superior Court of Justice. By reviewing the interlocutory appeal filed by the liquidator, Judge Osmar Mohr from the State Court of Santa Catarina clarified that the under - lying application did not require prior homologa -
tion, as expressly established in the legislation recently enacted, and therefore ordered that all real estate of the debtor in Brazil should be fro - zen, inasmuch as it was part of the insolvent estate. A final ruling by a panel of judges is expected on the matter. Furthermore, the interlocutory appeal filed by the liquidator intends to settle whether the debtor must be served prior to the granting of recogni - tion. The Public Prosecutorial Office opined this is not necessary. A final ruling by a panel of judg - es decided in favour of the liquidator, confirming that no prior service is necessary. Coffee trader obtains Chapter 11 recognition in Brazil In 2023, a global coffee trader filed for Chapter 11 bankruptcy in New York on the grounds that market conditions such as supply disruptions and higher costs to raise financing throughout the pandemic jeopardised the company’s ability to pay its debt on time. In 2024, the group secured recognition of its Chapter 11 bankruptcy in Brazil. The measure was meant to prevent creditors from enforcing their rights in Brazil, as the debtor declared over USD500 million in liabilities. With the recognition, the debtor obtained a moratorium suspending all execution proceedings in Brazil, as the group pursued its reorganisation in the United States. BVI liquidation recognised in Brazil A Brazilian court has also granted the recognition of a British Virgin Islands liquidation of an entity which has an operational subsidiary in Brazil. In this case, the Brazilian subsidiary is under judi - cial reorganisation and is in the process of imple - menting its reorganisation plan. The application for recognition of the foreign parent company was filed before the same bankruptcy court.
61 CHAMBERS.COM
Powered by FlippingBook