By: Vitor Antony Ferrari and Ivan Kubala

The text of Law No. 14,112/2020 was published in the Official Gazette of the Union on December 24, after being sanctioned by President Jair Bolsonaro with partial vetoes, and has been in force since the end of January this year with regard to the sanctioned text.

The presidential vetoes addressed the following items:

I. Suspension of labor enforcement actions against the responsible party, whether subsidiary or jointly liable, until the approval of the plan or the conversion of the judicial recovery into bankruptcy (paragraph 10 of art. 6);

II. Possibility of including medical cooperatives in the rules of the recovery procedure;

III. Exclusion from the list of credits not subject to judicial recovery of those credits and/or guarantees linked to Rural Product Certificates for physical settlement;

IV. Possibility of acquiring assets from companies undergoing judicial recovery free from environmental, regulatory, administrative, criminal, anti-corruption, tax and labor obligations (sole paragraph of art. 60 and paragraph 3 of art. 66);

V and VI. Extension of tax benefits to companies undergoing judicial recovery.

In January of this year we published comments regarding the vetoes.

A veto is the disagreement of the President of the Republic, as provided for in the Federal Constitution in article 66 and its paragraphs. Presidential vetoes were forwarded to the National Congress under no. 57/2020 and, since February 1, 2021, the date the Legislative Assembly returned from recess, they have been awaiting deliberation on their maintenance or rejection.

From the date of resumption of work, the constitutional period of thirty calendar days for deliberation of the veto by senators and deputies in a joint session began. Furthermore, for the consideration of the veto, the rules of Congress set the date for convening the session to be the third Tuesday of each month, without exception. If the joint session does not occur on that date for any reason, the joint session will be convened for the following Tuesday. Thus, we will be able to have the analysis of the vetoes on March 2, 2021.

To reject the veto, an absolute majority of the votes of Deputies and Senators is required, that is, 257 votes of Deputies and 41 votes of Senators, counted separately. Therefore, if a lower number of votes for rejection is recorded in one of the Houses, the veto is upheld.

If the National Congress has not deliberated on the rejection of the veto by March 4, 2021, the deadline imposed by the Constitution, said matter will be included in the agenda and will suspend other deliberations until the final vote on the veto is held.

Finally, if the veto is rejected, the issues will be forwarded for promulgation by the President of the Republic within 48 hours or, in his absence, by the President or Vice-President of the Senate, within the same period.

Despite the presidential vetoes and the necessary rejection by Congress, the text that was published and has been in force since January 2021 has several significant changes that must

be examined rigorously, as they must be observed by all companies that intend to avail themselves of the recovery process, as well as by companies that are already undergoing judicial recovery, since the law is also applied to all ongoing processes.

Base source: www.congressonacional.leg.br/materias/vetos