THE Chamber of Deputies last Thursday approved a bill amending, on a transitional basis, the rules for bankruptcies and judicial reorganization processes during the new coronavirus pandemic. The intention is to assist companies during the period of economic crisis. The proposal, which creates an Insolvency Prevention System, goes for approval in the Federal Senate. The law will serve “a natural or legal person who exercises or has as an object the exercise of economic activity in their own name, regardless of registration or the business nature of their activity” – that is, it serves individual, autonomous and legal persons. The rules of the project apply to situations that occurred since March 20, when the decree that recognized the state of public calamity in Brazil as a result of the pandemic was published, until December 31 of this year, the date on which that decree expires.
According to the bill, from the moment the law is approved and effective, judicial and extrajudicial actions for the execution of guarantees will be suspended for 30 days, in addition to the bankruptcy decree, unilateral breach of contracts or review of contracts, collection of fines, eviction for non-payment or other economic element of the contract. Thus, during this period, the parties must seek extrajudicial agreements to renegotiate debts, taking into account the pandemic scenario of the new coronavirus.
If, within this period, there is no agreement, that entrepreneur who can prove a 30% reduction in his income – or higher than that – can do the process, called “preventive negotiation”, done by a bankruptcy judge.
The percentage in question needs to be analyzed based on the average revenue for the corresponding last quarter of activity in the previous year. The debtor will have 60 days to file the negotiation request. When making the application, all obligations established in approved judicial or extrajudicial recovery plans are suspended for 90 days.
According to the project, in relation to micro and small companies, it was defined that “all credits held, regardless of the guarantee or nature of the credit, will be subject to the effects of the procedures regulated by law”, having “more favorable conditions due to vulnerability” .
Based on the project, the participation of creditors in the optional “preventive negotiation” session, “it is up to the applicant debtor to inform creditors, by any suitable and effective means, about the start of negotiations”.
In addition, during the process that will be analyzed by a bankruptcy judge, the debtor can seek and obtain financing for his company or business – this amount will not be computed within the debt already presented.
The project also increases from 40 minimum wages (about R $ 40 thousand) to R $ 100 thousand the minimum amount for filing for bankruptcy. The debtor can also apply for judicial reorganization even though he has filed another application in the last five years. If it is out-of-court, the term falls to two years.