Restructuring in the Electricity Sector in Brazil.

The boundary that separates dealerships from distributors.

In April 2023, when Light had just filed for bankruptcy protection, the question on everyone's mind in the restructuring market was whether Article 18 of Law 12.767/2012 would survive the case.

Three and a half years later, the answer is more interesting than the two extremes that were being debated: the provision was not declared unconstitutional, it was not revoked, and it did not reach the Supreme Court — nor did it prevent the largest distribution group in the country, which was in crisis, from restructuring judicially.

It's important to understand how this happened, because the engineering that solved the Light case became the industry's benchmark model.

What the law prohibits, and to whom.

The legal text is short and categorical. Article 18 excludes judicial and extrajudicial reorganization regimes for public electricity service concessionaires, with a single exception: "except after the termination of the concession." The same applies to its extension, provided for in Article 19, almost always forgotten in discussions, also affecting permits.

Two technical points often go unnoticed.

The first point is that the prohibition is external to the Bankruptcy and Judicial Reorganization Law: Article 2 of Law 11.101/2005, which lists those outside its scope, does not mention energy concessionaires. They are excluded by a subsequent sectoral law. The second point is that the prohibition covers both judicial and extrajudicial reorganization, which also closes the negotiation door of Article 161—a relevant detail at a time when extrajudicial reorganization has become the sector's preferred instrument, as demonstrated by Raízen and Braskem.

Where did it come from?

Provisional Measure 577/2012 arose from the collapse of the Rede Energia Group. Celpa had filed for bankruptcy protection in February of that year—becoming the first distributor in the country to do so—and ANEEL had already initiated proceedings to terminate its concession. The provisional measure was issued on August 29.

The following day, the agency ordered intervention in eight of the group's distributors: Celtins, Cemat, Enersul, Força e Luz do Oeste, Caiuá, Bragantina, Vale Paranapanema, and Nacional.

Celpa was excluded from the intervention precisely because it was already undergoing judicial reorganization.

The legislative logic, as recorded in the Senate's Legislative Information Journal, was that the recovery of a concessionaire should proceed under the intervention regime, not under the creditors' meeting regime.

This was not about denying the concessionaire a way out, but rather about choosing who leads that way: the regulator, in this case ANEEL, and not the business judgment.

The grant title defines the Restructuring.

This is the practical key to the device, and it explains the apparent paradox of 2026 — ten energy trading companies in bankruptcy protection, with more than R$ 10 billion in combined liabilities, and no distributors.

Articles 18 and 19 are restrictive legal provisions, and their factual basis is the legal title of the concession, not the economic sector. Those who hold a concession or permit for a public service are included.

Those who operate under authorization—which is not a delegation of public service—are excluded, and may be subject to the legal remedies provided for in Law 11.101/2005.

Law 9.074/1995 defines this boundary: concessions for larger-scale hydroelectric and thermal power plants intended for public service; authorization for independent producers and self-producers.

This results in a reasonably clear picture. Distributors, transmission companies, and generators operating under concession are prohibited. License holders are also prohibited by virtue of Article 19. Independent producers, authorized wind and solar farms, traders in the free market, non-concessionary holding companies, and Special Purpose Entities (SPEs) without public service authorization do not meet the legal requirements.

Case law has confirmed the broad interpretation within the scope of the concession. In the Abengoa case, the 22nd Civil Chamber of the TJRJ (Rio de Janeiro State Court of Justice) ruled in 2017 that "public service transmission concessionaires are not subject to the judicial reorganization regime," confirming the termination of the lines—while the other companies in the group, which are not concessionaires, obtained judicial reorganization normally.

At Grupo Renova, which has 61 companies undergoing restructuring in the 2nd Bankruptcy Court of São Paulo and plans approved in December 2020, Article 18 was not even discussed: these were authorized wind power generation SPVs.

The same silence is repeated now. In the decisions that granted the recovery plans of 2W Ecobank, Elétron, Gold, IBS, Tradener, Diferencial, Electra, and Pontal-Thopen, Article 18 does not appear. Not because it has been dismissed, but because it is not included. This is the best empirical evidence that the provision has a clear boundary—and that this boundary is determined by the type of concession granted.

The Light case: the seal was applied, not bypassed by chance.

Here is the most important correction to the debate as it stood in 2023. The idea that Light had "circumvented" Article 18 to capture the stay period circulated widely. What the decision of May 14, 2023 did was the opposite: it recognized and applied the prohibition.

The court of the 3rd Business Court of Rio de Janeiro stated that "Light SESA and Light Energia are electricity concessionaires," and that "the prohibition contained in article 18 of Law No. 12.767/2012" applies to them. It admitted only Light SA, the holding company, to the proceedings. The two concessionaires appeared in the plan exclusively as jointly liable parties, and the credits submitted to the bankruptcy proceedings were those reflected in the holding company by virtue of the joint liability.

The distinction made by the Court was confirmed in June 2023. Given doubts about the scope of the stay, the court ordered a notice to be sent to all civil courts in the state clarifying that lawsuits against the concessionaires "should proceed normally." Consumers, suppliers, and labor claimants continued to pursue legal action against Light SESA and Light Energia throughout the recovery process.

The plan worked until the end. It was approved in June 2024; the Light SESA concession was renewed for 30 years, from June 2026 to June 2056, through an addendum signed with the Ministry of Mines and Energy (MME) under the guidelines of Decree 12.068/2024 — including, it should be noted, the annual verification of financial capacity; and the recovery was concluded last week, on September 10, 2026, with more than 27,000 creditors paid and remaining adjusted net debt of R$ 5.57 billion.

The key point for those structuring operations is this: the holding company's recovery did not affect the concessionaire's license. It was precisely this separation that allowed the granting authority to renew the concession mid-process.

The substitute regime, and what happens when it doesn't work.

Law 12.767/2012 did not leave a vacuum. Its articles 5 to 16 outline what can be called regulatory recovery: intervention by ANEEL for up to one year, extendable for another two; suspension of the administrators' mandate with full management powers granted to the intervener; and, in article 12, a 60-day period for shareholders to present a Recovery Plan, with means of recovery and demonstration of economic and financial viability.

Once the plan is approved, the intervention ceases (art. 13); if rejected, the granting authority may determine forfeiture, division, incorporation, or change of control (art. 14). There is also the unavailability of the administrators' assets (art. 16) and the possibility of an exceptional regime of regulatory sanctions (art. 17).

In structure, it mirrors Law 11.101/2005 — with one crucial difference: the plan is submitted to the regulator, not to a creditors' meeting. The private creditor is the one who loses a voice.

The problem is that the system depends on a regulator being able to decide. However, practice does not demonstrate this possibility, as seen in the case of Amazonas Energia.

ANEEL recommended the termination of the concession to the MME in November 2023; the government issued Provisional Measure 1,232/2024 creating a specific alternative, the transfer of control; and the agency's vote, in September 2024, ended in a 2-2 tie, with the board depleted, without producing a decision or effects.

The company went to court. Neither judicial reorganization, nor intervention, nor forfeiture — paralysis.

The outcome took another two years, and it confirms the diagnosis. Only on October 7, 2024, did the Federal Court of Amazonas order ANEEL to decide within 24 hours, and the agency authorized the transfer of control on the same day — stating in the ruling that the approval was given “on a naturally precarious basis,” valid only as long as the court decision lasted.

The package that enabled the operation combined R$ 14.1 billion in subsidies from the Fuel Consumption Account over fifteen years with a contribution of R$ 6.5 billion from the buyer to reduce a liability exceeding R$ 10 billion; in parallel, Eletronorte approved the renegotiation of R$ 808.7 million that was owed to it.

The buyer is Âmbar Energia, the energy arm of J&F — a company distinct from the concessionaire, which continues to exist as Amazonas Energia, with the same concession contract. Âmbar signed in October 2024, but only effectively assumed control on April 14, 2026, after awaiting the judicial outcome; in May it announced R$ 2.34 billion in investment between 2026 and 2028 in networks, digitalization, meters and substations.

Thirty months pass between the recommendation for forfeiture and the actual change of control, with a tailor-made provisional measure and a court order compelling the regulator to decide. The substitute regime exists on paper; in the case where it was most needed, it did not work on its own.

Conflicting legislative issues

Law 14.112/2020 added Article 20-B to the Bankruptcy Law, which allows for prior or incidental conciliation and mediation "in disputes involving concessionaires or permit holders of public services in judicial reorganization and regulatory bodies or public entities.".

In 2020, therefore, the legislator explicitly presupposed the existence of public service concessionaires undergoing judicial reorganization. The provision covers any concessionaire, not just energy companies—and therefore does not revoke Article 18. But it is an indication that the 2012 exclusion was not re-examined when the Bankruptcy Law underwent its most profound reform. It is raw material for anyone who wants to argue for a restrictive interpretation of the prohibition.

What do we have in 2026?

The least comfortable finding of this review is that the 2023 discussion remained unresolved because it ceased to be necessary. There is no direct action of unconstitutionality against Article 18. There is no decision from the Superior Court of Justice (STJ) on the provision, in any case. There is no bill to repeal it — and the reform of Law 11.101/2005 currently underway in the Senate, originating from Bill 3/2024, deals only with bankruptcy plans, fiduciary managers, remuneration of judicial administrators, and limits on labor credits, and does not mention public service concessionaires.

The market found a corporate engineering solution that works, and the pressure to repeal the law subsided.

In turn, the insolvency disputes in the electricity sector have shifted location. The fight today is not about who can file for bankruptcy protection—it's about what bankruptcy protection does to the entity after it's granted.

The emblematic case is the dispute over disqualification from CCEE: in a case judged by the 1st Reserved Chamber of Business Law of the TJSP (Court of Justice of São Paulo), under the rapporteurship of Judge Carlos Alberto de Salles, the suspension of the disconnection of a retail trading company was upheld, with the application of article 52, II of Law 11.101/2005 to the requirement of a negative certificate foreseen in ANEEL Resolution 1.011/2022 and a differentiation between the hypotheses of entry and maintenance of an already associated agent.

Conversely, CCEE upheld the 2W and Differential disconnections due to non-payment, while ANEEL denied the request for a stay of execution.

That's where the living boundary lies. Article 18 defines who cannot use the RJ or RExt procedure; what is being discussed now is whether the company that entered can continue to operate in the market while it restructures. For a sector where losing registration with CCEE is equivalent to losing the business, this is the question that decides whether judicial reorganization fulfills its fundamental principles (the principle of preserving the company and its social function) for these companies.

Sources consulted

Legislation: Law No. 12,767/2012 (articles 5 to 19); Provisional Measure No. 577/2012; Law No. 11,101/2005 (articles 2, 20-B and 52, II); Law No. 14,112/2020; Law No. 8,987/1995 (articles 27 to 39); Law No. 9,074/1995 (articles 5, 6, 7 and 11).

Original article: TMA Brasil, Solution in Focus series — “Article 18 prohibiting the judicial reorganization of energy concessionaires”, April 20, 2023.

Doctrine: Journal of Legislative Information, Federal Senate, v. 50, n. 198 (2013).

Case Light: decision of 05/14/2023 from the 3rd Business Court of Rio de Janeiro; amended and consolidated Judicial Recovery Plan of 05/18/2024; ConJur, 06/23/2023; Monitor Mercantil (renewal of the concession until 2056); Jornal do Brasil, 09/10/2026 (closure).

Precedents: CanalEnergia (expiry of Abengoa's lines, TJRJ, 22nd Civil Chamber, 2017); Migalhas (approval of the Renova Group's plan, 2020); Terra (intervention in the distributors of the Rede Group, 2012); ANEEL and Poder360 (Amazonas Energia case).

Crisis of energy trading companies and regulatory effects: Migalhas (TJSP upholds retailer in RJ at CCEE); Portal Energia Limpa (shutdown of 2W and Differential); COC Energia; ConJur (extrajudicial recovery of Raízen); Brazil Journal (extrajudicial recovery of Braskem).

Article written by: Vitor Ferrari.