By Ivan Kubala

Law 11.101/2005 (LRF) regulates, among other things, the judicial recovery of entrepreneurs and business corporations, which aims to enable the debtor to overcome the momentary economic and financial crisis, therefore having as a guiding principle the preservation of the company.

It is known that, in recent years, due to the economic crisis that has plagued the country, the Judicial Recovery and Bankruptcy Law has served as a comfort to many companies that, although they are in difficulty, demonstrate a real possibility of restructuring and prompt recovery, in order to maintain their production source and consequently the jobs of their employees and the payment of suppliers and collaborators, thus enabling the rapid resumption of their economic activities.

However, large rural producers, individuals who have also been hit by the financial crisis and who contribute a good portion of the country's Gross Domestic Product (GDP), have faced difficulties in using the recovery procedure to resume their activities. Such obstacles have been imposed by the Judiciary, which does not accept the request without fulfilling the requirement established in the caput of article 48 of the LRF.

The aforementioned provision establishes that only the debtor who, at the time of the request, has been regularly carrying out his activities for more than 2 (two) years may request judicial recovery.

Considering that there is already an understanding that the rural producer, an individual, who practices professional activity in an organized, recurring manner and with a profit-making purpose, fits into the concept of entrepreneur in art. 966 of the Civil Code, it would be enough to prove the exercise of his activities for more than 2 (two) years.

The obstacle, however, lies in the position that the exercise of business activity is proven by means of registration with the Commercial Board. Therefore, without having registration with the Commercial Board, in theory the rural producer would not be entitled to avail himself of the benefits of the LRF, even if he has exercised business activity for several years.

Even if the rural producer registers with the respective Commercial Board to benefit from the recovery procedure, the question arises as to what the legal nature of the registration would be, whether constitutive or declaratory.

If constitutive, it is understood that only from the date of registration would the business activity be constituted and, consequently, the 2 (two) year term established in art. 48 of the LRF would begin to count, that is, the rural producer could not seek judicial recovery under the terms of the aforementioned law.

However, if the nature of the registration is considered merely declaratory, it is understood that the rural producer was already carrying out business activities, and it is only necessary to prove the period in order to avail himself of the judicial recovery.

The matter was even the theme of the event “Agribusiness in the Interpretation of the STJ”, held at the Superior Court of Justice, on September 26, 2018, in which it was widely addressed, but it seems to be far from being settled by the Superior Court of Justice, as revealed by some recent judgments.[1].

There are opposing jurisprudential and doctrinal positions, but there are also favorable ones.[2], which demonstrate that judicial recovery is indeed an important tool to be used by rural producers who are weakened by the economic and financial crisis, but who have real chances of restructuring themselves.

[1] ProAfR in REsp 1684994/MT (STJ)

[2] Instrument Appeal 2182543-10.2018.8.26.0000 (TJSP)