By: Vitor Ferrari and Ivan Kubala
Judicial Reorganization is a judicial procedure that is becoming increasingly common, and helps companies to overcome their economic crises, with an orderly renegotiation with creditors that is summarized in a Judicial Reorganization Plan.
However, what should be done when one of your debtors files for Judicial Reorganization?
Initially, it is essential that the creditor be duly represented by a specialized attorney familiar with the topic.
Afterwards, the procedure to ascertain and confirm the credit is sieved by the Trustee, who is in charge of supervising the entire procedure and making the first contact with the creditors, by means of correspondence, so that each creditor is aware that its credit is subject to the Judicial Reorganization effects, and so that it can confirm or differ from the amounts presented therein.
It is important to emphasize that if the creditor holds guarantees as fiduciary owner of chattels or real estate, commercial lessor, owner or committed seller of real estate whose respective agreements contain an irrevocability or irreversibility clause, including in real estate developments, or as owner in a sale agreement with reserve of ownership, his credit will not be subject to the effects of the judicial reorganization, and the ownership rights over the contractual thing and conditions will prevail, with due regard for the respective legislation. However, during the stay period, referred to as “Stay Period”, such Creditor cannot sell or remove from the debtor’s establishment any capital goods essential to the debtor’s business activity.
Should this not be the case, the Creditor will be subject to the Reorganization effects, and should remain attentive to all steps taken in the process.
Thus, it is important that the Creditor check the following points:
If the RJ request made by the Debtor has met the legal requirements;
If the credit was listed in the Debtor’s list of creditors for the correct amount;
Who is the trustee appointed by the court, in case the bankruptcy petition is accepted and processed by the court;
Separate the documents that prove the Credit ownership held against the Debtor;
To appear in all acts ordered by the court;
To analyze the Judicial Reorganization Plan, and if necessary, to file the due objection within the legal term, so that the Plan in question may be submitted to all Creditors´ evaluation before a General Meeting;
Participate actively in the meeting, as well as negotiate as much as possible so that their interests are achieved;
As can be seen, a creditor must be present in order to protect his credit rights, without incurring even greater costs in the event of a delayed filing, or even being surprised by the negotiation approval in which he had not the slightest participation.
Thus, the professionals´ performance with experience and zeal in performing the work is essential for the procedure to have the expected effectiveness that, ultimately, is the Customer´s interests and rights preservation.