10/30/2020
Law 11.101 / 2005, which provides for the Judicial Reorganization and Bankruptcy institutes and which replaced the 1945 Decree, was a true innovation. Contrary to the previous rule, the new law came with the objective of remedying the financial difficulties of the entrepreneur and the business society, preserving social businesses and stimulating economic activity.
However, some points of the new law did not bring the desired effect and, therefore, some amendments have been proposed in order to give the norm the desired effectiveness.
One of the proposals concerns the inclusion of labor credit in Extrajudicial Recovery. As this possibility is currently forbidden, it ends up harming this category of creditors, as it gives no alternative to the company in crisis but to seek support in the Judicial Recovery to renew this liability. The procedure, however, is more costly, more time consuming and potentially more damaging – both for the recoveree and for his creditors – as well defended by Deputy Alexandre Molon. He is the author of Amendment No. 19 of PL 6229/2005, which proposes the exclusion of credits “derived from labor legislation or resulting from work accidents” from the list of liabilities that cannot be traded in Extrajudicial Recovery.
The proposal also provides for union participation in extrajudicial negotiation in order to inspect and guarantee the protection of labor creditors.
The proposal was approved by the Chamber of Deputies on 08.26.2020, voting in a single round, and now goes for analysis by the Federal Senate.
