The current Brazilian legislation on corporate insolvency law entered into force in 2005 by Federal Law 11,101, which represented a long-anticipated mindset change in regard to the previous Decree-Law 7.661, which had been enacted in 194 5. Law 1 1, 101 incorporated principles of the World Bank and the IMF, anel its purpose was to create an efficient insolvency system and co allow negotiations between debtor and creditors to take place.
As such, Law 11,101 provided for three court proceedings: judicial reorganisation, expedited reorganisation and bankruptcy liquidation. Only debtors engaged in business activities are subject to those proceedings; the insolvency of consumers and civil associations, as well as other entities such as financial institutions and cooperatives, is regulated by other statutes.
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