By Vitor Ferrari

Given the current economic scenario, in which recovery appears to be slow, companies can count on an instrument that navigates between a good negotiation agreement and the guarantee emanating from a court decision.

Named as Extrajudicial Recovery, this procedure serves to rebalance the financial liabilities of companies that have good relations with their creditors. In turn, these Creditors will have to agree amicably, or not (depending on the modality), with the plan offered, with the aim of receiving their credits, and also make it possible to overcome the economic-financial crisis situation of the debtor Company, with the maintenance of the production source, the employment of workers, that is, the due preservation of the company.

Initially, it is important to clarify that Extrajudicial Recovery has 02 (two) distinct modalities, namely:

• Merely homologatory recovery;
• Tax Recovery for Creditors;

In the first modality, that is, in the merely homologatory Extrajudicial Recovery, all Creditors subject to the Recovery Plan would sign an Agreement for payment of credits, which would be taken to the competent Court (in the case of the city of São Paulo, one of the Judicial Recovery and Bankruptcy Courts of the Central Forum) for mere homologation.

This modality would result in the novation of debts, imposing new deadlines and amounts for payment.

Despite the benefits mentioned (debt renewal), in addition to other possible benefits such as a grace period for the start of payment, a discount on the amounts of negotiated credits and the renegotiation and application of differentiated interest and corrections, the Debtor Company must obtain approval from all of its creditors, within a payment plan that is equitable to all, and the form of payment cannot be differentiated among its creditors. This fact makes it very difficult to reach an agreement under these terms.

Despite the difficulty, this modality is an option for some companies that have excellent work BackOffice and have competent legal support.

In turn, the second Extrajudicial modality, that of Recovery Imposed on Creditors, has the same benefits as the first, without the need to obtain the unanimity of its Creditors.

Thus, Tax Recovery requires the minimum agreement of 3/5 of the creditors and the credits of each type (class of creditors), duly described within an Extrajudicial Recovery Plan, which will also be subject to the scrutiny of the judiciary.

Said tax plan, in view of the clear majority, is binding on all creditors after approval, including other creditors who have not agreed with it.

I – Requirements for filing an Extrajudicial Recovery

In order to facilitate understanding of the requirements necessary to file an Extrajudicial Recovery, the points to be met are listed below:

• have been engaged in business activity for more than 2 (two) years;

• not be bankrupt, or have already had the liabilities arising from any bankruptcy declared extinguished by a final judgment in accordance with articles 159 and 160 of law 11.101/05, that is, 05 (five) years or more have passed since the judgment that declared bankruptcy;

• not have a pending request for judicial recovery;

• not having obtained judicial recovery less than 2 (two) years ago;

• not having obtained approval for extrajudicial recovery less than 2 (two) years ago;

• not having obtained judicial recovery based on the special plan for micro and small businesses for less than 5 (five) years, as established by Complementary Law 147/2014; and,

• not having been convicted or not having as an administrator or controlling partner a person convicted of bankruptcy crimes.

Unsurprisingly, these requirements are the same for filing a judicial recovery. This shows that despite the “Extrajudicial” facility, there is a need to respect the formal rules in order to ensure the effectiveness of payment by Creditors and verification of the probity of the Debtor.

II – Limitations of Extrajudicial Recovery

Having overcome the positive points of Extrajudicial Recovery, it is still necessary to clarify that, unfortunately, the above procedure, regardless of its modality, does not cover a series of credits, which are:

• Labor credits;

• Credits arising from work accidents;

• Tax credits;

• Credits with fiduciary guarantee of movable or immovable property (art. 49, § 3);

• Credits arising from commercial leasing (art. 49, § 3);

• Credits arising from a promise to purchase and sell property with an irrevocability or irrevocability clause (art. 49, § 3);

• Credits arising from a real estate purchase and sale agreement with retention of title (art. 49, § 3);

• Advance on exchange contract (art. 86, inc. II).

Having explained these points, I would like to point out that after the judicial phase for approval has begun, advances or advance payments to creditors cannot be made. and there may be no unfavorable treatment of people not covered by the Recovery Plan in any of the modalities presented.