Another high-profile in-court reorganization filing has made the headlines in Brazil. This issue of L&S Brazil Outlook guides the reader through key aspects creditors should pay attention to when a debtor files for in-court reorganization.

On this issue | July 2019

Abuse of voting rights by creditors in business insolvency

When creditors’ votes are disregarded

Despite the absence of a concept of abuse of voting rights in the Business Insolvency Act, courts are using the notion of abusiveness to set aside votes from creditors against a bad restructuring plan. That sends the wrong signal to the market...

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The rights and the role of bondholders in reorganization proceeding

Strategic options for bondholders

The holders of bonds issued abroad are typically a particularly important group when the borrower files for in-court reorganization. Bondholders gain very little by staying dormant and can get good results when acting as individual claimholders.

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Purchase of assets from companies probed in corruption cases

Doing business with distressed companies

The Clean Company Act set clear limits to the liability of investors who merge with or buy assets from companies probed in corruption cases. However, other statutes also give several authorities power to impose sanctions on entities involved...

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Ways to avoid legal uncertainty on in-court reorganizations in Brazil

How to mitigate legal uncertainty

Courts in Brazil have been circumventing express legal provisions from the Business Insolvency Act by resorting to legal principles and interpretation. The bias towards the debtor is questionable from a legal and a market perspective and creditors...

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The Odebrecht insolvency filing: basic information as of July 17, 2019

Odebrecht’s judicial reorganization

Odebrecht’s recent filing is one of the largest-ever court-supervised reorganizations in Brazil. Even creditors to the affiliates that did not make this filing should monitor the Odebrecht case since the impact on them is still unclear.

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