Brazil: Predictable Claims Under Judicial Reorganizations?

Last Updated: 14 March 2017
Article by Rafael Zabaglia

In late 2016, the majority of the 3rd Panel of the Brazilian Superior Court of Justice ("Superior Tribunal de Justiça" or the STJ) decided upon ruling on appeal No. 1,443,750-RS that a claim for attorney's fees awarded against debtor after it has petitioned for judicial reorganization, stemming from a pre-petition lawsuit, must also be deemed a pre-petition claim.

This precedent may be much more significant than the background of the case would warrant at first sight.

Pursuant to the first part of article 49 of Law No. 11,101 dated as of 2.9.2005 (the Brazilian Bankruptcy Act), claims "subject to judicial reorganization" are those "existing as of the filing" even if they have not matured yet. Therefore, claims that come into existence after debtor has filed for reorganization are (or should be) deemed post-petition claims and are (or should be) immune to its effects.

In this recent precedent, the STJ established that certain claims that did not exist prior to filing must also be deemed pre-petition. This is a pro-debtor stance, since pre-petition claims may not be pursued for 180 days or more (stay period) and will be affected by whatever haircut, rescheduling and grace period is contemplated in the restructuring plan.

Upon interpreting article 49 of the Bankruptcy Act, the STJ majority opinions extended the concept of what claims "existing as of the filing" are, so as to also encompass claims that admittedly do not exist yet but are "predictable", regarding "situations essentially occurred before the initial filing has been accepted in court".

The rationale of the STJ was as follows: (a) the Bankruptcy Act's only purpose upon creating a more favorable regime for post-petition claims is to facilitate debtor's access to the market and thus enable its survival over the course of the proceedings, as suppliers would have no incentive to provide new services and goods to a party that has acknowledged its own insolvency if they could not pursue their claims promptly and in full; and (b) as the attorney's fees bore no relationship to purpose of survival of the business, they should not benefit from the more favorable regime of post-petition claims.

The STJ legislated from the bench. It introduced an additional, non-statutory, condition for a post-petition claim to be excluded from the reorganization proceedings: on top of the claim coming into existence after the filing, the very situation from which such claim originates must also have occurred after the filing and must relate to the purpose of preserving the continuity of the business.

The effects of this finding could be very far-reaching depending on how courts assimilate it. Ultimately, one could contend that all claims stemming from situations occurred prior to the filing for reorganization – whether based on torts or contracts, and even if the claims only come into existence way later –are "predictable" or do not serve the purpose of saving the business, and as a result must be deemed pre-petition claims.

Hopefully the courts will not accept the STJ reasoning.

The original relation between creditor and debtor and a hypothetical claim arising out of it are two different animals. Usually both will come into existence at the same time – say, when writing out a cheque or entering into a loan or a purchase and sale agreement with deferred payment. That is not always the case, though: in claims for contribution under contract or for torts, for example, the defendant will only be entitled to any contribution from the third-party defendant (i.e., it will only have a claim against debtor) if and when it pays damages to plaintiff.

Under article 49 of the Bankruptcy Act, all that matters is solely the moment the claim becomes existent, as opposed to (a) the moment the fact, act or contract from which it stems has occurred, been practiced or been entered into and to (b) the cause or purpose of either the claim or the relation between creditor and debtor. If the claim existed as of the filing for reorganization, it is a pre-petition claim; if it only came into existence thereafter, then it is a post-petition claim.

The legislator could have made a different choice; for instance, it could have set forth that all claims arising out of facts prior to the filing are pre-petition claims, or that only claims based on contracts entered into by debtor after the filing (debtor-in-possession financing) may be deemed post-petition claims. It did not make such choice, however.

It is not hard to anticipate the controversies that could ensue as a result of the application of the STJ's opinion. Are all "predictable" claims to be included in the proceedings regardless of how unlikely it is that they come into existence? It will probably be necessary to define an abstract criterion of "predictability" or "likelihood" of the future existence of any given claim.

Debtor must comb through the instances with respect to which a future disbursement may be required, and upon filing for reorganization it must catalogue the relevant claims that fit that abstract criterion (pursuant to article 51, III, of the Bankruptcy Act the filing must be accompanied by the "complete nominal list of creditors"). And these "creditors" will then be entitled to vote the restructuring plan pursuant to article 39 of the Bankruptcy Act, even if the claim does not exist yet as of the general creditors' meeting and even if the claim never comes into existence at all.

Order No. 467 issued by the Ministry of Finance on 12.16.2016 created a workgroup for discussion and proposal of amendments to the Bankruptcy Act. If the workgroup proposes changes to the regime of post-petition claims stemming from pre-petition acts, facts and contracts and its suggestions are passed by Congress and enacted by the President, the concept of "predictable claims" will become statutory and only then will it be admissible that some post-petition claims be affected by the reorganization. For the time being, though, this is simply not the case under the Bankruptcy Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions