A report by Infomoney[1] shows that the first quarter of this year registered historic records of judicial reorganization petitions, with the month of April totaling 93 requests, which represents a rise of 43.1% compared to the same period last year.
Before initiating a judicial reorganization proceeding, it is possible to make use of the extrajudicial reorganization procedure or debt restructuring, which are legal mechanisms to promote the reorganization of the financial obligations of companies that are going through momentary difficulties and need some breathing room to survive, so that, if the company is in an extremely delicate financial situation, it aims to contain the crisis and keep the company operating, so as to avoid bankruptcy.
Extrajudicial reorganization
Extrajudicial reorganization is a procedure in which the debtor negotiates directly with its creditors the renegotiation of the debts, without the intervention of the Judiciary. In this procedure, the debtor proposes a payment or restructuring plan for the obligations, presenting proposals for discounts, deadlines and special conditions.
Extrajudicial reorganization depends on the acceptance of the majority of the creditors involved, in accordance with criteria defined by the legislation of each country.
Debt restructuring
Debt restructuring, in turn, involves the negotiation and renegotiation of the debtor’s financial obligations, with the objective of adjusting the terms and conditions of the payments so as to make them more suitable to its financial capacity. This procedure can occur either extrajudicially, as mentioned above, or judicially, through the judicial reorganization process.
Judicial reorganization is a procedure provided for by law that allows companies in financial crisis to restructure and avoid bankruptcy. In this case, the debtor presents a judicial reorganization plan to the Judiciary, which includes measures such as the renegotiation of debts, the sale of assets, corporate restructuring, among other actions to make the recovery of the company viable. The reorganization plan must be approved by the majority of the creditors and supervised by the judge responsible for the proceeding.
Both extrajudicial reorganization and debt restructuring seek to avoid insolvency and provide a new chance for the debtor to recover financially. These procedures may involve the reduction of interest, extension of deadlines, discounts, conversion of debts into equity interest, among other measures, depending on the negotiations and agreements reached between debtors and creditors.
It is important to emphasize that extrajudicial reorganization and debt restructuring are legal alternatives for situations of financial crisis, allowing debtors to seek viable solutions for the payment of their obligations and avoid bankruptcy.
Lassori Advogados, through the Legal Department as a Service – LDaaS, offers continuous legal support in extrajudicial reorganization and debt restructuring, working on the planning, the negotiations, the management of liabilities and the fulfillment of the agreements entered into.
By Lina Irano and Glauber Ortolan
Pedidos de recuperação judicial crescem 43% em abril, mostra Serasa← Back to blog