Transnational insolvency occurs when the economic and financial crisis of a company or group of companies extends beyond the borders of a single state and involves assets, creditors, contracts, operations, or establishments located in multiple jurisdictions. It is a complex legal phenomenon characterized by the simultaneous presence of relevant elements subject to different legal systems, which necessitates normative and institutional coordination between autonomous legal orders.

Unlike strictly domestic insolvency, transnational insolvency is not limited to the reorganization or liquidation of a company under the perspective of a single legal system. Discussions revolve around defining the competent jurisdiction to conduct the main proceedings, the criteria for recognizing and ensuring the effectiveness of foreign decisions, the method of preserving or realizing assets located abroad, and the equal treatment of internationally distributed creditors. The focus of the debate shifts from purely financial to structural and cooperative.

This context has become increasingly common due to the globalized operations of business groups, the internationalization of financial markets, the high mobility of investments, and the geographical fragmentation of production chains. A single conglomerate may maintain its headquarters in one country, its industrial units in another, its structured financing in a third jurisdiction, and its main creditors dispersed across various states, highlighting the inadequacy of purely national solutions for contemporary business crises.

The lack of a specific discipline on transnational insolvency in the Brazilian legal system represents one of the most significant gaps in the corporate restructuring system. In an economic environment marked by the global circulation of capital, the internationalization of corporate structures, and the territorial dispersion of assets and creditors, the insistence on addressing complex crises through essentially domestic instruments compromises the efficiency, predictability, and institutional credibility of the country.

Currently, cases with international elements are resolved through broad interpretations of the Brazilian Bankruptcy Law (LRF) in conjunction with general norms of private international law and mechanisms of international judicial cooperation. Although this approach allows for specific solutions, it does not ensure uniformity in decisions or normative stability. Each case then depends on specific arrangements subject to divergent interpretations, which intensifies legal uncertainty for creditor companies and investors.

This regulatory instability directly impacts Brazil's attractiveness as a business environment. Foreign investors are increasingly rigorously assessing the existence of clear, predictable, and efficient credit protection mechanisms in crisis scenarios. The absence of a structured transnational insolvency regime increases the perception of risk, raises financing costs, and reduces the country's competitiveness in the international market.

Furthermore, the lack of formal coordination between jurisdictions produces significant inefficiencies. Parallel proceedings initiated in different countries can lead to incompatible decisions, reciprocal asset freezes, disorderly executions, and destruction of economic value. Instead of promoting the preservation of viable businesses and maximizing returns to creditors, the system ends up encouraging asset fragmentation, excessive litigation, and a loss of collective efficiency.

From an institutional perspective, Brazil remains far removed from international best practices, particularly the UNCITRAL Model Law on Cross-Border Insolvency adopted by several relevant economies. This disconnect hinders cooperation between courts, judicial administrators, and foreign authorities, as well as restricting the swift recognition of external proceedings and the coordination of global restructurings.

The need for specific regulation also stems from the very evolution of judicial reorganizations in the country. Large business groups have begun to present international corporate structures, external financing, guarantees located outside the national territory, and creditors distributed across multiple jurisdictions. Disregarding this reality compromises the effectiveness of judicial reorganization as an instrument for preserving economic activity and productive reorganization.

In this context, the creation of a specific discipline for transnational insolvency represents not only a technical legislative improvement. It constitutes a true strategic decision of economic and institutional policy aimed at aligning Brazil with international governance standards, strengthening legal certainty, increasing investor confidence, and ensuring that global corporate crises are handled in a coordinated, efficient, and equitable manner.

Without this regulation, Brazil will continue to face insolvencies of global proportions with instruments of local reach and consequently with structurally limited results.