By: Vitor Ferrari and Ivan Kubala

According to data from Serasa Experian, the number of requests for judicial recovery grew in the last months of 2022, affecting both large and small companies. Looking at the current political and economic scenario of the country, it is likely to remain high.

Recently, the topic became popular due to the request for judicial recovery proposed by Lojas Americanas, which joined the select group of companies under recovery listed on the stock exchange. alongside Oi, which recently filed for its second judicial recovery; Paranapanema, MMX Mineração, Ethernit and many others.

The continued high number of requests for judicial recovery is due, among other factors, to the high interest rate; the current government's statements against austerity and fiscal control policies; and the market's fear regarding the possibility of other large companies filing for judicial recovery.: the domino effect triggered by the request for judicial recovery by Lojas Americanas.

 At its last meeting, in early February, the Monetary Policy Committee (COPOM) decided to maintain the basic interest rate (Selic Rate) at 13.75% per year, in order to discourage consumption and control rising inflation..

The Selic rate directly affects the interest rate charged by banks and financial institutions when granting credit, so that when it is high, the cost of obtaining funds increases. This discourages entrepreneurs from taking out loans to invest in their own business, making it difficult to maintain business activity and slowing down the economy in general.

Another important consequence of the high interest rate is the increase in the cost of debts backed by the Selic Rate.. In other words, loans whose interest incidence varies according to variations in the Selic rate showed a large increase in their installments, so that many debtors were unable to bear these costs, becoming in default.

Finally, there is still the “American effect”: the market is apprehensive about the possibility of other large companies presenting accounting errors in their audits, which, when discovered, reveal large debts.. Such fear hangs over the financial market, creating a tense climate, in which The investor, fearful, avoids making contributions to variable income and withdraws his capital at the slightest sign of instability.

Recently it was speculated that companies such as Centauro, Lojas Marisa and Ambev would also file for bankruptcy protection, which, along with the large number of companies listed on the stock exchange that are already undergoing judicial recovery, corroborates the maintenance of fear.

Thus, it is clear that the current scenario is extremely hostile to the development and expansion of business activity. This is even worse for indebted and defaulting companies, whose option is to resort to judicial recovery procedures to avoid future bankruptcy. As long as the Brazilian market remains unfavorable to economic activity, the number of judicial recoveries will remain high.

With the collaboration of Luís Felipe Simão