By: Vitor Ferrari and Ivan Kubala

On 07/13/2022, the substitute judge of the Business Court of the district of Belo Horizonte, Minas Gerais, Adilon Cláver de Resende, granted the request for judicial recovery of Cruzeiro Esporte Clube, filed earlier that week.

Other football teams have already filed for judicial recovery before the competent courts, but never one as large and with as much history as Cruzeiro. Furthermore, this is the first recovery of a football team belonging to the SAF, which will bring other challenges to the process, since all acts must be in compliance with Law 14.193/21, which regulates the type of corporation.

At the end of 2021, about a year after the club's relegation to the Série B of the Brazilian Championship, the club's economic situation was precarious: the accounting board carried out by Cruzeiro's Deliberative Council reported a debt of R$1 billion. The club's management argued that the billion-dollar debt was due to agreements with athletes who were no longer part of the club's staff, exchange rate variations on debts contracted with FIFA and loans and their interest.

In 2021, the club became a SAF and was therefore able to sell up to 90% of its shares to investors. With the change in the club's format, the company Tara Sports, controlled by Ronaldo Fenômeno, became interested and even sent a proposal, which was soon accepted.

Among Ronaldo's demands for the acquisition of the club were the change of Cruzeiro Esporte Clube from a sports association to a SAF and the request for Judicial Recovery of the club.

With the recent granting of the request, a judicial recovery plan must be approved within 60 days and, according to Dr. Resende's decision, all creditors entitled to judicial recovery have a period of 15 days to administratively present their qualifications or disagreements regarding the related credits before the judicial administrators.

Furthermore, it also determined that the Club undergoing recovery must present “monthly financial statements, while its judicial recovery process continues, under penalty of dismissal of its administrators”. It also said that it only accepted the request of the Minas Gerais team in order to preserve its activities and thus guarantee the maintenance of its social function, and that all the evidence gathered in the process proves that “the state of economic and financial crisis that it is going through is temporary” and reveals “a viable perspective of its recovery”.

Due to the complexity of the case, the Court of Belo Horizonte chose to appoint 2 judicial administrators, in order to work together and in a coordinated manner.

With the collaboration of Luís Felipe Meira Marques Simão