By Vitor Ferrari

The Judicial Recovery process is a procedural remedy to be used by companies that are experiencing economic difficulties and whose main objective is to renegotiate their debts in order to successfully fulfill their future obligations, perpetuating business activity and maintaining jobs, generating greater income distribution.

Therefore, the judicial recovery process allows not only a renegotiation with creditors, but also the suspension of restrictive acts carried out by creditors in lawsuits filed by the Court, helping the Company to protect its assets and capital goods essential to the activity in the possession of the Recovering Company.

However, the limits of the judicial recovery process encounter obstacles regarding the subjection of its effects to its creditors. Creditors of Companies can be related to two large groups, namely, Bankruptcy and Extra-Bankruptcy creditors.

Bankruptcy creditors are all those directly subject to the effects of judicial recovery and who will compete directly with other creditors classified in the classes defined in the Law, which are Labor Credits and those arising from the employment relationship, Creditors with Real Guarantees, Unsecured Creditors or those who do not hold legal guarantees, and Micro and Small Business creditors.

Extra-bankruptcy creditors, also listed in the Judicial Reorganization Law, are not subject to the effects of the reorganization and, in theory, may proceed with executive measures aimed at receiving their credits. Thus, the creditor who holds the position of fiduciary owner of movable or immovable property, of commercial lessor, of owner or prospective seller of property whose respective contracts contain an irrevocability or irreversibility clause, including in real estate incorporations, or of owner in a sales contract with retention of title, their credit will not be subject to the effects of the judicial reorganization and the property rights over the property and the contractual conditions will prevail, in compliance with the respective legislation.

Furthermore, we have tax credits and credits formed after the request for Judicial Recovery, also mentioned in the Law.

In general, despite the non-subjection of such credits, for these measures, the sale or removal from the debtor's establishment of capital assets essential to its business activity is not permitted during the 180-day suspension period of actions and executions.

 This is the prescription of the Law.

It turns out that, even if the aforementioned deadline is exceeded, depriving companies in difficulty of assets essential to their activities would result in an extremely damaging fact for operations to the detriment of all creditors, a fact that cannot be accepted.

The preservation of essential assets for companies in difficulty is an extremely important topic and of interest to all involved.

Our Courts, aware of the social function and the principle of preserving business activity, assisted by legal professionals in defending the interests of Companies, have been deciding to maintain such assets because the mere passing of the 180-day term provided for in art. 6, § 4, of the LFRE is not enough to, in isolation, authorize the resumption of lawsuits filed against the debtor Company, since the suspension is also based on arts. 47 and 49 of that legal statute, the purpose of which is to guarantee the preservation of the company and the maintenance of capital assets essential to the activity in the possession of the Recovering Company.

This understanding arises from the significantly complex and bureaucratic nature of the recovery process. Even if the Company Under Reorganization strictly complies with the timetable set forth by law, it is acceptable to assume that the approval of the plan by the General Meeting of Creditors will occur after the 180-day period has elapsed.

A unanimous fact in our jurisprudence is that the STJ has already decided that, despite the extra-bankruptcy creditor being the holder of the position of fiduciary owner of movable or immovable property, or other modalities that differentiate him from others who are subject to the effects of judicial recovery, the universal court, or the Judicial Recovery Court, is the only one competent to assess whether the asset is indispensable to the productive activity of the Recovering Party.

Therefore, the verification of the expropriation of goods and seizure of assets is the exclusive responsibility of the Recovery Court, and no other court may dispose of the assets of Companies in Recovery under penalty of interfering with the exclusive jurisdiction determined by Law.

Therefore, it is necessary to explain to the Court the need to maintain the assets with a view to the proper continuity of business activity, and the decision to maintain them must be respected by creditors with a view to the greater and collective interest, removing the individual interest of isolated creditors.