Reform of Bankruptcy Law May Be Completed This Year
With requests for judicial recovery hitting record numbers in 2023, the discussion about the efficiency and speed of bankruptcy in Brazil is gaining traction again, with a possible review by the Senate of Bill No. 3/2024.
Our partner Fabiana Solano, in an interview with Valor Econômico, emphasized that the focus on speed in bankruptcy needs to be accompanied by legal security, allowing for the active participation of specialists in the proposed changes to the law.
“In more mature economies, swift bankruptcies allow for greater recovery of credits and reintegration of assets into the economy.”
The project proposes important changes — such as the creation of a fiduciary manager, appointed by creditors, and greater incentives for creditors to acquire assets — and suggests a welcome, more robust participation of creditors in this process. However, the proposed changes raise concerns within the legal community, as many of the new ideas have not been tested and may lead to increased bureaucracy and delays in the bankruptcy process, without ensuring the necessary security for the various stakeholders involved.
The 2020 reform is still in the consolidation phase. Check out the full report (available in Portuguese and only to subscribers) here.
