By: Vitor Antony Ferrari and Ivan Kubala

The sale of assets has proven to be an advantageous tool for obtaining resources and restructuring companies undergoing judicial recovery, as we have already highlighted in an article published on the topic “The advantages of the sale of assets through Isolated Production Units as a means of Judicial Recovery”[1].

In this context, the new text, published in December of last year and which came into force at the end of January of this year, brought important additions to the rules that deal with the topic in question, in harmony with what had already been decided by the State Courts and the Superior Courts of Justice.

For example, the new legislation included in its framework art. 60-A, which establishes which assets can be covered by Isolated Production Units, which previously depended on doctrinal and jurisprudential interpretation.

Another change that, by all indications, seems to us to be a positive point, consists of the modalities of sale of assets through UPIs, since the new text introduced the figure of the “organized competitive process promoted by a specialized agent with an unblemished reputation” (item IV of art. 142), in addition to any other modality, as long as it is approved in accordance with the law (item V of art. 142), so that it makes the means of sale more flexible, which were previously restricted to auctions, sealed proposals and auctions.

Furthermore, one of the most important characteristics of UPIs, and which reflects the success of this means of recovery, is the absence of succession of liabilities by the acquirer.[2], was maintained. However, if it were not for the presidential veto of the sole paragraph that was intended to be included in art. 60 of the law, the Isolated Production Units would become even more attractive, since the vetoed text expanded the list of liabilities that would not be succeeded by the acquirer of the assets.

Currently, the object of sale is alienated free of any obligation, and the Superior Courts have already consolidated the understanding that the buyer of the isolated production unit will not succeed the seller in his civil, labor and tax obligations.

The vetoed text allowed the assets of companies undergoing judicial recovery to be acquired free from environmental, regulatory, administrative, criminal, anti-corruption, tax and labor obligations.

Finally, one of the major new developments is the possibility of selling the company in judicial recovery in its entirety, without the buyer assuming any debts, along the same lines as the UPI. However, it is important to be aware of the risk that this scenario could result in the depletion of the assets of the company in recovery, compromising the fulfillment of its obligations.

Thus, despite the new developments brought by the new legislation, which, when put into practice, will certainly provoke new discussions, the sale of assets through Isolated Production Units continues to emerge as one of the most effective mechanisms for judicial recovery and the most advantageous for debtors to fulfill their obligations and creditors to have their demands met.

[1] https://www.mazzuccoemello.com/as-vantagens-da-alienacao-de-ativos-por-meio-de-unidades-produtivas-isoladas-como-meio-de-recuperacao-judicial/

[2] The purchaser of the UPI by one of the means provided for in the legislation, by virtue of express legal provision, does not become the successor of the company in Judicial Recovery.