The legal position of creditors in judicial reorganization

The acceptance of a judicial reorganization filing profoundly changes the position of the creditor. Under art. 6 of Law 11,101/2005, as amended by Law 14,112/2020, enforcement actions against the debtor are stayed for one hundred and eighty days, extendable once for an equal period. Understanding the scope of the stay and the instruments available to creditors is a precondition of any credit preservation strategy.

Claims subject to and excluded from the proceeding

Art. 49 of Law 11,101/2005 subjects to the reorganization all claims existing on the filing date, even if not yet due. The same provision, however, excludes significant positions. Creditors holding fiduciary title over movable or immovable assets, lessors under finance leases and owners under retention of title arrangements retain their rights over the assets, pursuant to paragraph 3 of art. 49, and advances on foreign exchange contracts remain outside the plan, under paragraph 4 of the same article. Paragraph 1 of art. 49 further preserves the rights of creditors against co-obligors, guarantors and parties liable in recourse, keeping the enforcement route against personal guarantors open.

Voting, quorums and control over the plan

The general meeting of creditors resolves on the plan according to the classes of art. 41 and the quorums of art. 45 of Law 11,101/2005. In the secured and unsecured classes, approval requires creditors representing more than half of the value of the claims present and, cumulatively, a simple majority of those present by headcount. Rejection of the plan leads, as a rule, to liquidation, but art. 58, paragraph 1, allows the court to grant the reorganization even without approval by all classes, provided the cumulative statutory requirements are met, a mechanism that demands close attention from dissenting creditors to the formation of quorums.

Once the plan is approved, the claims are novated under art. 59, without prejudice to guarantees granted by third parties. Breach of a plan obligation within two years of confirmation authorizes conversion into liquidation, with reinstatement of the creditors original rights.

Active instruments of credit protection

Effective creditor action is not limited to voting. Timely proof of claims and challenges to third party claims ensure a correct general list. Participation in the creditors committee grants qualified access to information. The acquisition of isolated productive units, sold free of successor liability, and the extension of financing to the debtor under arts. 69-A et seq. turn the creditor into a protagonist of the restructuring. Art. 82-A, in turn, regulates the piercing of the corporate veil in strict terms, confining shareholder liability to the specific statutory hypotheses.

This article is for general information only and does not constitute legal advice. For guidance on specific situations, please contact our team at contato@gotlibrocha.com.br.