São Paulo Court changes understanding and rural producer also has the right to judicial recovery

Two rural producers from São Paulo, based in the São José do Rio Preto region, in 2010, obtained the benefit of judicial recovery, which suspends for a period the execution of all debts against them. On that occasion, the Court of Justice of the State of São Paulo ordered the judicial recovery to be processed. The judicial recovery plan was then presented by the rural producers and their debts were renegotiated, and, on that occasion, there was a subsequent decision denying the continuation of the judicial recovery procedure by the then judges of the Special Chamber of the Court of Justice of São Paulo.

Practically 8 years after the beginning of the discussion, in an opinion drawn up by the eminent Judge Alexandre Lazzarini, the discussion that started years ago remained recognized, that the rural producer who manages to demonstrate that he practiced “business activity” for more than 2 years, prior to the request of judicial recovery, you may use this instrument.

The decision opens up a new possibility for negotiating debts and perpetuating the producers' business. “Rural producers who are also facing difficulties can activate the institute of the company judicial recovery law. All the negotiation and payment benefits that the law applies to companies can be applied to rural producer entrepreneurs”.

According to the decision, Law 11.101/05, which deals with judicial recovery, equates the rural producer to a company. By law, a farmer who has his business registered only as an individual can request recovery as a company, now the Court has expanded this understanding, with technical and common sense criteria.

Currently, what is happening is the cascade effect. The large groups have entered into judicial recovery and their creditors, many of them rural producers, transport companies, service companies, industries of the most diverse activities, will receive the amounts to which they are entitled in long installments, 5, 10 to 20 years, depending on the recovery plan that was approved.

This year alone, our office has received an average of 10 consultations per month from companies and rural producers who are financially leveraged - due to the default of their customers - and as a result of investments made and which are at a standstill in the face of the crisis that has devastated the country. country.

Sergio Emerenciano

Lawyer specializing in Judicial Recovery and Bankruptcy