Brazil: Opportunities for Distressed Transactions

Increased M&A activity has occurred in Brazil over the past few years for several reasons, including the effectiveness of the Federal Law # 11.101/2005, the Brazilian Judicial Recovery Act, which has an important role in restructuring companies in critical economic situation. This Act has updated the laws regarding companies’ bankruptcy and financial recovery in Brazil. It regulates the suspension of existing lawsuits against company and also that the company provides a Judicial Recovery Plan with the purpose of recuperating from the financial loss. It intends to offer to the company in distress an opportunity to recover from the collapse situation, making possible the maintenance of the operations of the company, employees’ jobs and creditors’ interests, allowing, this way, the preservation of the company, its social function and the encouragement for the development of economic activities in Brazil.

Lex Universal – Potential opportunities for distressed transactions in Brazil in view of the Brazilian Judicial Recovery Act