Judicial recovery in agribusiness

Judicial recovery is a procedure that allows companies – of all sizes – to renegotiate debts and suspend payment deadlines. It is a process by which the indebted company obtains a period of time to continue operating while negotiating with its creditors, under the mediation of the Court. Debts are frozen for 180 days and the operation is maintained.

The request for judicial recovery is made to the Court through an initial petition that contains, among other information, the financial statement for the last three years, the reasons why it entered into a financial crisis, and the list of creditors. After the request is accepted, the company has 60 days to present the recovery plan and foreclosures (debt collections) against it are suspended for 180 days.

Entrepreneurs and business companies can request judicial recovery. They must be registered with the National Register of Legal Entities (CNPJ). In addition, there must be a record of activity for at least two years with the CNPJ. However, there are some exceptions, even for legal entities. Mixed economy companies, financial institutions, public companies, NGOs and cooperatives are examples of companies that are not authorized to request judicial recovery.

Agribusiness, with its peculiarities, is subject to a series of challenges. Price fluctuations, for example, can be caused by a variety of factors, including changes in market demand, variations in production, and changes in trade policies. Furthermore, climate issues such as droughts or floods can drastically affect agricultural production, leading to significant losses.

In this context, a well-designed judicial recovery plan can be the salvation for a company in difficulty. This plan, which must be developed with the help of a specialized lawyer, allows the company to negotiate its debts with creditors, providing temporary financial relief and the chance to restructure.

A lawyer with experience in judicial recovery and the agribusiness sector can offer valuable guidance throughout the process. He can help the company understand its options, develop an effective recovery plan, and negotiate with creditors. Additionally, the attorney can ensure that all stakeholders—including suppliers, customers, and employees—are considered in the plan, allowing the company to continue operating during the restructuring. This is crucial to the company's long-term survival and success in the competitive agribusiness sector.

In short, judicial recovery is a valuable tool for agribusiness companies to face financial challenges. A lawyer's guidance during this process not only increases the chances of success, but also allows the company to focus on what it does best: producing high-quality food and agricultural products. Therefore, it is highly recommended to seek legal advice when considering judicial recovery.

*Per Marcelo Oliveira João, lawyer at Di Benedetto Advocacia