The Fourth Joint Panel of the Superior Court of Justice (“STJ”) has ruled on the time criterium to be applied on deciding whether rural producers’s debts are subject to being included in Judicial Recovery procedures (REsp 1.800.032/MT). The judgment amplifies the set of debts that are subject to restructuring by means of a Judicial Recovery procedure, thus favoring rural producers.

According to the literality of art. 48 of Law No. 11.101/05 (“BRBL”), rural producers could only file for Judicial Recovery after two (2) years of registration with the Commercial Registry. Therefore, the only debts that were subject to restructuring were those that had arisen after the producer’s registration with the Commercial Registry. The vote from the Reporting Justice, Marco Buzzi, kept in line with the wording of BRBL, thus stating it is not possible to include previous debts to a Judicial Recovery procedure.

However, Justice Raul Araújo presented a dissenting vote. According to Justice Araújo, BRBL should be interpreted so as to not distinguish between debts that have arisen prior to the producer’s registration with the Commercial Registry and debts that have arisen after it. The vote states registration does not alter the activity that the producer in fact carries on.

In a split decision, 3 to 2, the dissenting vote prevailed. Accordingly, in light of a time criterium, the whole set of obligations of rural producers is subject to being reestructured by means of a Judicial Recovery procedure.The Fourth Joint Panel of the Superior Court of Justice (“STJ”) has ruled on the time criterium to be applied on deciding whether rural producers’s debts are subject to being included in Judicial Recovery procedures (REsp 1.800.032/MT). The judgment amplifies the set of debts that are subject to restructuring by means of a Judicial Recovery procedure, thus favoring rural producers.

According to the literality of art. 48 of Law No. 11.101/05 (“BRBL”), rural producers could only file for Judicial Recovery after two (2) years of registration with the Commercial Registry. Therefore, the only debts that were subject to restructuring were those that had arisen after the producer’s registration with the Commercial Registry. The vote from the Reporting Justice, Marco Buzzi, kept in line with the wording of BRBL, thus stating it is not possible to include previous debts to a Judicial Recovery procedure.

However, Justice Raul Araújo presented a dissenting vote. According to Justice Araújo, BRBL should be interpreted so as to not distinguish between debts that have arisen prior to the producer’s registration with the Commercial Registry and debts that have arisen after it. The vote states registration does not alter the activity that the producer in fact carries on.

In a split decision, 3 to 2, the dissenting vote prevailed. Accordingly, in light of a time criterium, the whole set of obligations of rural producers is subject to being reestructured by means of a Judicial Recovery procedure.

The National Justice Council (“CNJ”) has approved three new recommendations seeking to grant greater efficiency to Judicial Recovery procedures. The suggestions came from a work group specially designed by CNJ to deal with matters of Insolvency Law, under the coordination of Justice Luis Felipe Salomão (from the Superior Court of Justice).

The first recommendation is an orientation to State Courts for the constitution of specialized courts for the judgment of Judicial Recovery and Bankruptcy matters. The second recommendation is the approval of a previous analysis on the documentation of the business association filing for Judicial Recovery, seeking to identify whether the entity fits the criteria for entering the restructuring procedure. Finally, the third recommendations is the adoption of mediation as means for dispute settlement concerning issues that have arisen throughout the Judicial Recovery or Bankruptcy procedure.The National Justice Council (“CNJ”) has approved three new recommendations seeking to grant greater efficiency to Judicial Recovery procedures. The suggestions came from a work group specially designed by CNJ to deal with matters of Insolvency Law, under the coordination of Justice Luis Felipe Salomão (from the Superior Court of Justice).

The first recommendation is an orientation to State Courts for the constitution of specialized courts for the judgment of Judicial Recovery and Bankruptcy matters. The second recommendation is the approval of a previous analysis on the documentation of the business association filing for Judicial Recovery, seeking to identify whether the entity fits the criteria for entering the restructuring procedure. Finally, the third recommendations is the adoption of mediation as means for dispute settlement concerning issues that have arisen throughout the Judicial Recovery or Bankruptcy procedure.

The State Court of São Paulo (“TJSP”) ruled, on September 2019, it is not possible to alter the Judicial Recovery plan after the procedure is declared over by the Bankruptcy Court.

The judgment was issued by the 1^st Chamber of Business Law in an interlocutory appeal against the confirmation of the Judicial Recovery plan of Livraria Cultura (procedure no. 2116034-63.2019.8.26.0000). According to the reporting appellate judge, Gilson Delgado Miranda, modification to the recovery plan may be done even after the supervision state of the procedure (ruled by art. 61 of Law No. 11.101/05), however, altering the terms of the recovery plan is no longer a possibility once there is a final judgment declaring the Judicial Recovery case is over.

With basis on said premise, TJSP has struck down a clause that allowed for modifications to the terms of the recovery plan after the ending of the procedure as long as the modification had been approved in a Creditors Meeting.The State Court of São Paulo (“TJSP”) ruled, on September 2019, it is not possible to alter the Judicial Recovery plan after the procedure is declared over by the Bankruptcy Court.

The judgment was issued by the 1^st Chamber of Business Law in an interlocutory appeal against the confirmation of the Judicial Recovery plan of Livraria Cultura (procedure no. 2116034-63.2019.8.26.0000). According to the reporting appellate judge, Gilson Delgado Miranda, modification to the recovery plan may be done even after the supervision state of the procedure (ruled by art. 61 of Law No. 11.101/05), however, altering the terms of the recovery plan is no longer a possibility once there is a final judgment declaring the Judicial Recovery case is over.

With basis on said premise, TJSP has struck down a clause that allowed for modifications to the terms of the recovery plan after the ending of the procedure as long as the modification had been approved in a Creditors Meeting.

The Superior Court of Justice (“STJ”) has denied an appeal filed by a creditor who challenged the inclusion of his credit in a Judicial Recovery procedure (REsp 1.704.201). The appeal to the Superior Court of Justice was based on a decision by the State Court of Rio Grande do Sul (“TJRS”) reversing a judgment by the Bankruptcy Court that had enabled the exclusion of the credit from the final list of creditors.

The reporting Justice, Paulo de Tarso Sanseverino, voted in favor of the opposition being subject to analysis by the Judiciary even after the term for its filing, since Law No. 11.101/05 (“BRBL”) allows for the filing of late proofs of claims. However, Justice Nancy Andrighi presented a dissenting vote stating that art. 8 of BRBL is a mandatory rule, so that an opposition to the list of creditors must be presented within the period said norm provides for – ten (10) days.

In line with the dissenting vote, STJ’s 3^rd Panel confirmed TJRS’s judgment refusing to hear the merits of the opposition filed five (5) days after the period provided for by art. 8 of BRBL.The Superior Court of Justice (“STJ”) has denied an appeal filed by a creditor who challenged the inclusion of his credit in a Judicial Recovery procedure (REsp 1.704.201). The appeal to the Superior Court of Justice was based on a decision by the State Court of Rio Grande do Sul (“TJRS”) reversing a judgment by the Bankruptcy Court that had enabled the exclusion of the credit from the final list of creditors.

The reporting Justice, Paulo de Tarso Sanseverino, voted in favor of the opposition being subject to analysis by the Judiciary even after the term for its filing, since Law No. 11.101/05 (“BRBL”) allows for the filing of late proofs of claims. However, Justice Nancy Andrighi presented a dissenting vote stating that art. 8 of BRBL is a mandatory rule, so that an opposition to the list of creditors must be presented within the period said norm provides for – ten (10) days.

In line with the dissenting vote, STJ’s 3^rd Panel confirmed TJRS’s judgment refusing to hear the merits of the opposition filed five (5) days after the period provided for by art. 8 of BRBL.

The Business Law Group of the State Court of São Paulo (“TJSP”) has published, on September 2019, three new precedents. The rulings synthetize the Court’s stance on the matters, whilst also contributing to making the Court’s judgments uniform.

The three recent precedents join another six (6) precedents the Business Law Section of the State Court of São Paulo had previously published. Specifically with regards to Judicial Recovery procedures, the new precedents state the possibility of the Bankruptcy Court determining the presentation of an expert report upon receiving a request for the commencement of a Judicial Recovery case, as well as the possibility of the stay period being extended as long as the extension has a fixed term and its need was not caused by the debtor.

These are the new precedents regarding Judicial Recovery precedents:

Precedent VII:

Despite the Law being silent on the matter, the Bankruptcy Court may, upon examining the request for the commencement of a judicial recovery case, determine an expert report be presented, as soon as possible, in case there are signs of fraudulent or abusive use of the judicial recovery procedure.

Precedent IX:

The extension of the stay period may be granted, as an exception, as long as the debtor has not contributed to its need and the extension has a fixed term.The Business Law Group of the State Court of São Paulo (“TJSP”) has published, on September 2019, three new precedents. The rulings synthetize the Court’s stance on the matters, whilst also contributing to making the Court’s judgments uniform.

The three recent precedents join another six (6) precedents the Business Law Section of the State Court of São Paulo had previously published. Specifically with regards to Judicial Recovery procedures, the new precedents state the possibility of the Bankruptcy Court determining the presentation of an expert report upon receiving a request for the commencement of a Judicial Recovery case, as well as the possibility of the stay period being extended as long as the extension has a fixed term and its need was not caused by the debtor.

These are the new precedents regarding Judicial Recovery precedents:

Precedent VII:

Despite the Law being silent on the matter, the Bankruptcy Court may, upon examining the request for the commencement of a judicial recovery case, determine an expert report be presented, as soon as possible, in case there are signs of fraudulent or abusive use of the judicial recovery procedure.

Precedent IX:

The extension of the stay period may be granted, as an exception, as long as the debtor has not contributed to its need and the extension has a fixed term.

The 3rd Panel of the Superior Labor Court (“TST”) ruled that a debtor under judicial reorganization, UTC Engenharia S.A., could file an appeal to a Labor Court without posting an appeal bond (RR-10148-37.2016.5.03.0055).

After losing an employment claim in a trial court, the company appealed the judgment to a Labor Court without presenting an appeal bond, in line with the wording of art. 899, §10 of the Consolidation of Labor Laws (added by the Labor Reform). Upon judging on the matter, however, the Labor Court of the 3^rd Region (“TRT-3”) dismissed the appeal due to the failure to prepay the costs of the appeal.

The company subsequently appealed to the Superior Labor Court, which reversed the judgment from TRT-3. TST stated that since the Labor Reform (Law No. 13.46/17) came into effect, business associations under judicial reorganization became exempt from posting appeal bonds. The judgment was unanimous.The 3rd Panel of the Superior Labor Court (“TST”) ruled that a debtor under judicial reorganization, UTC Engenharia S.A., could file an appeal to a Labor Court without posting an appeal bond (RR-10148-37.2016.5.03.0055).

After losing an employment claim in a trial court, the company appealed the judgment to a Labor Court without presenting an appeal bond, in line with the wording of art. 899, §10 of the Consolidation of Labor Laws (added by the Labor Reform). Upon judging on the matter, however, the Labor Court of the 3^rd Region (“TRT-3”) dismissed the appeal due to the failure to prepay the costs of the appeal.

The company subsequently appealed to the Superior Labor Court, which reversed the judgment from TRT-3. TST stated that since the Labor Reform (Law No. 13.46/17) came into effect, business associations under judicial reorganization became exempt from posting appeal bonds. The judgment was unanimous.