By: Vitor Ferrari, Ivan Kubala.

It has become commonplace to see creditors or even debtors presenting plans to direct the liquidation of assets or reorganize payment methods within bankruptcy proceedings.  

After the change in law 11.101/05, the ultimate goal of bankruptcy becomes the rapid liquidation of companies whose business activity is no longer viable, thus seeking the rapid and effective reallocation of the remaining business assets in order to preserve entrepreneurship and the remaining capital. However, the changes did not bring hypotheses regarding plans presented by creditors in order to optimize this process.

This possibility, if expressly provided for by law, would become useless, since there are a number of other opportunities, such as an alternative plan in Judicial Recovery and Extrajudicial Recovery, or would it be an excellent opportunity for creditors to draw up better and faster plans that would benefit everyone involved?

According to the understanding of the São Paulo judiciary, there are a number of cases in which, even without express legal provision, creditors present very interesting alternative plans for bankruptcy, especially if observed from the perspective of procedural speed and cost-effectiveness, since the plans, in addition to being concluded more quickly, end up having lower costs. This is beneficial for both debtors and creditors.

The provisions of the new law only require the Judicial Administrator to submit an asset realization plan within 60 days of his/her appointment. Furthermore, the rules governing the organization of the liquidation of assets and the determination of liabilities in bankruptcy have not been changed.

Thus, it is understood that the presentation of alternative plans in bankruptcy proposed by creditors can be a real asset for this group. In addition, the beneficiaries will be both the debtors, who will have the process concluded more quickly; and the judicial administrators, who will no longer have the exclusive obligation to present the plan, and will be able to work together to reach a common goal for all.

It is therefore understood that the presentation of alternative bankruptcy plans by these parties does not go against the legal provisions, since the process would remain identical, it would only allow greater freedom for creditors and debtors to organize themselves and would close more quickly and with better plans presented.

With the collaboration of Luis Felipe Simões