Restructuring and Insolvency Newsletter: March/2025 updates

Superior Court of Justice decides that credit guaranteed by a bank guarantee enforced after the judicial reorganization request is not subject to the proceeding

The 4^th Panel of the Superior Court of Justice (STJ) confirmed the decision of the São Paulo State Court of Appeals (TJSP) that, once the main contract default occurs after the judicial reorganization request, the claim resulting from the default and guaranteed by a bank guarantee should not be considered subject to the proceeding, even if the claim held by the creditor against the main debtor were to be subject. According to Justice Raul Araújo, in line with Precedent 1,051 of STJ, even if the bank guarantee was contracted before the judicial reorganization request to guarantee a construction contract, the enforcement of the bank guarantee and the payment of the indemnity occurred after that date, making the claim not subject to the proceeding. This decision diverges from the understanding adopted by the 3^rd Panel of the STJ, which recognized that a bank guarantee contracted before the judicial reorganization request is subject to the proceeding, even if the credit arises later. Additionally, Judge Raul Araújo equated the bank guarantee to judicial surety insurance, as in both cases, the relationship between the guarantor and the creditor is distinct from that between the debtor and the guarantor/co-obligor. Since the bank guarantee is conditioned upon a future and uncertain event, the triggering event for a claim is determined from the enforcement of the bank guarantee and payment of the indemnity.

Minas Gerais State Court of Appeals rejects creditor’s appeal and maintains the extension of the stay period for Grupo Montesanto Tavares in a provisional measure preceding a reorganization request

The 21^st Specialized Civil Chamber of the Minas Gerais State Court of Appeals (TJMG) denied an appeal filed by a creditor against the extension of the stay period granted to Grupo Montesanto Tavares within the scope of a provisional measure preceding a judicial reorganization request. Responsible for 8% of Brazil’s coffee exports, the group has been trying to renegotiate its debts with its creditors since November 2024. In the decision, judge rapporteur José Eustáquio Lucas Pereira stated that there is no impediment to extend the suspension of lawsuits and enforcements against Grupo Montesanto Tavares within the scope of a provisional measure preparatory for judicial reorganization, as long as it does not exceed the 180-day limit established in Law 11,101/2005. The decision will ensure an extension of 30 additional days to the 60 days previously granted, aiming to enable the group’s consensual composition with its creditors.

São Paulo State Court of Appeals prevents auction in the stalking horse modality

The 1^st Business Chamber of the São Paulo State Court of Justice (TJSP) denied an appeal seeking judicial authorization for an auction in the stalking horse modality. Although the State Court judges argued that Article 142, item V, of Law 11,101/2005 allows the sale of assets in any modality and that, in situations such as difficulty in valuing the asset, the stalking horse is admitted, the reporting judge, Carlos Alberto de Salles, highlighted that the specifics of the case prevent the application of the modality, as there was no provision in the judicial reorganization plan, nor approval by the creditors’ committee or the general meeting of creditors for such a provision. Additionally, he noted that the trustee raised questions about the detrimental nature of the binding offer proposal to the judicial reorganization, such as various conditions for the start of payment and a minimum price below the appraisal value.

Superior Court of Justice orders new trial regarding the essentiality of grains and judicial reorganization remote status in the judicial reorganization of rural producers

Justice João Otávio de Noronha, from the 4^th Panel of the Superior Court of Justice (STJ), granted the special appeal of two rural producers in judicial reorganization to order the Mato Grosso State Court of Appeals (TJMT) to conduct a new trial on issues related to the judicial reorganization remote status of a claim and the essentiality of grains encumbered in a barter contract (an operation in which the rural producer acquires products and pays for them with the delivery of grains after the harvest) with the issuance of a rural product note (CPR). The TJMT had granted the interlocutory appeal filed by the creditor of the barter contract, recognizing the judicial reorganization remote status solely based on the nature of the CPR. When ruling a motion for clarification, the TJMT dismissed the claim that the grains were essential for the recovery of the rural producers but did not justify its understanding. Therefore, the STJ declared that the TJMT had not indicated concrete elements to support its decisions regarding the judicial reorganization remote status and the non-essentiality of the grains, especially failing to address the possibility of applying the exception provided in Article 11 of Law 8,929/1994 (which states that although the CPR of a barter operation is not subject to judicial reorganization, the creditor’s right to receive the harvest products may be hindered by a fortuitous event or force majeure) and ordered the return of the case to the TJMT for a new trial on the matter.

According to Allianz Trade, insolvency cases are expected to increase by 18% in Brazil by 2026

Allianz Trade, an arm of the Allianz Group that globally maps the financial health of companies, projects an 18% increase in business insolvencies in Brazil by 2026, driven by high inflation and elevated interest rates. In 2024, the country has recorded a 37% increase in insolvencies, affecting all sectors. For 2025, a growth of 13% is expected, totaling 4,000 cases, and in 2026, an increase of 5%, reaching 4,200 cases. Globally, insolvencies are expected to grow by 6% in 2025 and 3% in 2026.

For more information on the topic, please visit Mattos Filho’s Restructuring and Insolvency practice area.