Put: Victor Antony Ferrari, Antonio Mazzucco and Ivan Kubala

Judicial Recovery, well planned in conjunction with legal professionals with extensive experience in the area, has been a useful, versatile and effective tool for companies facing a temporary financial crisis, especially during a pandemic, to maintain their activities and resume their growth, with the generation of jobs and development of the economy. 

In this context, it is important to highlight some important benefits of this institute for business corporations that need economic and financial restructuring, which can be extracted from Law No. 11/101/05 itself: 

• Currently, prior negotiation between debtors and creditors is permitted, through alternative means of conflict resolution, for a period of 60 days, during which there will be the possibility of suspending ongoing executions, providing a breathing space for companies that have been pressured by their creditors; 
• Suspension of legal actions and executions for a period of 180 days, extended for the same period, avoiding blocking of accounts and seizure of assets; 
• Broad flexibility in renegotiating and restructuring debts, with the application of discounts, installments and other forms of payment, such as, for example, payment in kind or conversion of debts into shares; 
• Protection of assets essential to the operation of the company undergoing recovery, preventing seizure or restriction of these assets, under penalty of making the recovery process unfeasible; 
• Possibility of selling assets that no longer make sense for business activity and that have become true liabilities, without succession of the liabilities to the purchasers, which makes the operation more attractive and facilitates disposal; 
• During the process, the company cannot suffer bankruptcy actions arising from credits subject to the effects of the ongoing renegotiation;
  

In view of this, the company or group of companies has numerous advantages in taking advantage of judicial recovery, which, despite the various discussions in the judicial sphere, convey security and a good dose of expectation of overcoming the financial crisis.