By Ivan Kubala and Vitor Ferrari

As mentioned in a previous article, Law No. 11,101/2005 (LRF), which instituted the judicial recovery of entrepreneurs and business corporations, has been frequently used by 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.

The recovery regulated by the aforementioned legislation is carried out via judicial proceedings, that is, with the participation of the Judiciary, but the leading role lies with the creditors, who have full autonomy to deliberate on the effective possibility and viability of the company's recovery under judicial recovery.

It is the creditors who, in an Assembly, will approve, or not, the judicial recovery plan formulated by the company in economic and financial difficulty, so that, if approved, it is up to the Judge to ratify it under the terms of article 58 of the Recovery and Bankruptcy Law.

Therefore, in theory, the sovereign will of creditors cannot be questioned by the Judge, who will interfere only in cases provided for by law (art. 58 et seq.) or in cases of evident illegality (fraud, abuse of rights, etc.), as understood by the Superior Court of Justice.[1], that is, only in exceptional cases is judicial interference in judicial recovery plans permitted.

However, some positions taken by State Courts have modified these precepts.[2], which deserves attention from companies that intend to avail themselves of the benefits of a recovery procedure, as well as from legal professionals who work in the area, who must guide their clients on the risks inherent to the matter.

This is because the Judiciary, overriding the sovereign will of creditors, has even interfered in the forms and conditions of payment of credits established in judicial recovery plans, which can greatly impact the strategies used by companies in recovery for restructuring and resuming growth, in such a way as to make the preservation of their activities and, consequently, their recovery unfeasible.

Furthermore, these decisions cause profound legal uncertainty in the recovery procedure.

Therefore, companies that plan to embrace the mantle of the Judicial Recovery Law must seek guidance from professionals who have expertise in the area, with the aim of ensuring greater security and better results for the resumption of its operations and growth.

[1] REsp 1359311/SP

[2] https://www.valor.com.br/legislacao/6059803/tj-sp-altera-correcao-e-prazos-de-planos-de-recuperacao-judicial