Put: Antonio Mazzucco and Victor Antony Ferrari
Years after the environmental disaster in Mariana (MG), the mining company responsible, Samarco, is facing financial difficulties and is forced to file for judicial recovery to avoid closing its doors. However, the recovery plan presented to creditors was rejected, the reins being taken by the Financial Creditors.
In previous articles published by our firm, we have already addressed the judicial recovery of Mineradora Samarco S/A (“Samarco”). After the socio-environmental disaster that occurred in Mariana (MG) on November 5, 2015, Samarco had its operations interrupted, accumulated debts and lost customers. In addition to the reputational damage and breach of contracts, Samarco became obliged to compensate and repair the damages resulting from the rupture of its dam.
On April 9, 2021, the company filed a request for judicial recovery before the 2nd Business Court of the District of Belo Horizonte/MG, in order to restructure its debt, the largest portion of which is financial, of which approximately R$1.5 billion is subject to judicial recovery. On April 12, 2021, the judicial recovery process was granted and the judicial administrators were appointed, initiating the process.
More than a year after the approval of the processing of the Judicial Recovery, on April 18, 2022, the Plan and its amendments presented by the Companies Under Reorganization were rejected by the creditors. In addition, on the same date and at the time of the AGC itself, a period of 30 days was granted for the presentation of an alternative PRJ by the Creditors.
A first alternative PRJ was presented on May 17, 2022 (PRJA1), detailing the means of Judicial Recovery, within the stipulated legal deadline.
Furthermore, together with PRJA1, the Group of Creditors and Unions (composed of Employee Unions, Consortiums and service providers who are creditors in the Judicial Recovery) also presented a document regarding the composition of creditors supporting the PRJA1, which included shareholders Vale and BHP. This group of creditors would represent 48,58% of the credits, totaling R$ 23,794,452,361.76 distributed among creditors of Classes I, III and IV. Furthermore, an Economic-Financial Report, Feasibility Study and Valuation Report of Mining Goods and Assets and Equipment were also presented.
However, in the same assembly, the Financial Funds predominantly made up of Class III creditors, backed by several other creditors who would represent more than 25% of the total credits and more than 35% of the creditors present at the last AGC, They also presented a new alternative PRJ (PRJA2).
Thus, 02 (two) distinct Plans were presented by different Groups of Creditors, with PRJA1 being the Group of Creditors and Unions (composed of Employee Unions, Consortiums and service providers who are creditors in the Judicial Recovery) and the PRJA2 of the Group of Financial Funds.
The PRJA2 presented by the Financial Funds already contained a series of details and details of the means of Judicial Recovery to be used, with an impact on the shareholding structure of the Company Under Reorganization and the management of the company, in accordance with Law No. 11,101/2005, as well as on the percentages of discounts on credits, especially in the unsecured class. Furthermore, it also brought the need to renegotiate tax debts separately, as well as to obtain new financing and provide for transfer to the Renova Foundation, aiming at the restoration or compensation of socio-environmental damages resulting from the rupture of the Fundão Dam, with the imposition of financial limits.
Clearly, today the Minas Gerais judiciary is at an impasse regarding which Plan would be most viable. However, we must stick to the legal fact and compliance with requirements for the presentation of a Plan by Creditors, which apparently was not achieved by the Group of Creditors and Unions.
This is due to the fact that, in its participation composition, the Group of Creditors and Unions, sponsor of PRJA1 brought with it the agreement of the Shareholders VALE S/A and BHP BILLINTON, and the Law expressly excludes the shareholders or controlling companies from any deliberations on the Judicial Recovery Plan, having, at most, the right to participate in the General Meeting of Creditors, excluding any vote.
As if that were not enough, the aforementioned Group of Creditors also failed to pay attention to the requirements that would enable the presentation of the Alternative PRJ provided for in the Law regarding written support from creditors who represent, alternatively:
- more than 25% (twenty-five percent) of the total credits subject to judicial recovery (with the express exclusion of shareholders, the remaining creditors no longer held credit representation);
- more than 35% (thirty-five percent) of the credits of the creditors present at the general meeting that rejected the Recovery Plan presented by the Debtor.
The PRJA2, presented by the Financial Funds, which had already been organizing the AGC itself, which ended on April 18, had as its premise the demonstration of compliance with the legal conditions provided for in the items of art. 56, §6º of Law 11.101/05.
In this scenario, we will certainly have the exclusion of any vote on PRJA1, presented by the Unions, due to the absence of the formal conditions listed in § 6 of art. 56 of Law No. 11,101/2005, followed only by PRJA2, presented by Financial Funds.
Finally, it is believed that there is a possibility that PRJA2, for Financial Funds, will be taken to a round of full or specific mediation of the clauses established therein, a fact that would certainly avoid a new AGC as long as the limits for this are reached, in the exact terms of art. 56-A, a novelty brought by Law 14,112/20, modernizing and accelerating the recovery procedure.