By: Vitor Ferrari and Ivan Kubala

The possibility of asset auctions in judicial recovery processes is common knowledge. This is often the main strategy of the company under recovery to collect the amounts necessary to pay off the credits, especially in cases where the company's cash flow is deficient and there are no amounts in cash.

Although less common, there is also the possibility of creditors themselves auctioning their credits, not to third parties who may be subrogated in the right to receive them, but to the company itself under recovery.. I.e, the company under recovery promotes a competitive process among creditors, participation in which is optional, in which the one that grants the greatest discount in relation to its credit will receive it in advance.

This practice is known as a reverse auction and consists of the company in recovery summoning its creditors via public notice and offering amounts for early payment of credits, whether in full or in part. The winner is the qualified creditor who grants the greatest discount for payment of his/her credit, regardless of the class he/she occupies.

However, it is important to emphasize that the implementation of a reverse auction in judicial recovery must be provided for in the judicial recovery plan. presented by the recovering party and be approved by the General Meeting of Creditors.

Therefore, there is no need to talk about any possible disrespect for the principle of equality among creditors, since, in addition to the mandatory approval of the measure at a General Meeting of Creditors, all creditors can, if they wish, participate in the process.

Furthermore, Those who chose not to participate in the process will receive their credits under the exact terms of the approved judicial recovery plan, so that there will be no penalty for these creditors.

The reverse auction is an important tool that, if used correctly, can generate not only the possibility of early termination of the judicial recovery, but also a reduction in the amounts paid for the credits. Through its application, the judicial recovery process becomes faster and more efficient, since part of the credits are paid in advance.

With the collaboration of Luís Felipe Simão