What is judicial recovery?

Judicial recovery is a process for companies in difficult financial situations, but which have the potential to recover.

It offers these companies the chance to reorganize their activities, renegotiate debts with creditors and avoid bankruptcy, while still being able to maintain their operations and jobs.

This process consists of the following steps:

– Request for RJ: The company in difficulty files a request with the Court to begin the recovery process. At this stage, it must demonstrate the viability of its recovery and present financial reports.

– Appointment of AJ: The judge appoints a judicial administrator to monitor and oversee the process, ensuring that the company complies with the established obligations.

– Suspension of actions and executions: During the initial period (180 days), the company has its debts “frozen”, allowing it to focus on restructuring without being pressured by immediate collections.

– PRJ (judicial recovery plan): The company presents a detailed restructuring plan, which may include debt installments, sale of assets, changes in management, among other measures to improve financial health.

– AGC (general meeting of creditors): Creditors are consulted and may approve, reject or modify the plan. If the majority of creditors accept, the company can implement the plan and continue operating.

Execution of the plan and monitoring: Once approved, the company begins to execute the plan, and the judicial administrator continues to monitor compliance with the agreed obligations.

If the company complies with the recovery plan, it regains full control and exits judicial recovery.

If it fails to comply, it may end up in bankruptcy.

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