Due to Covid-19, judge suspends payment of credits in judicial reorganization.

Considering the Covid-19 pandemic a force majeure event, Judge Gustavo Dall'Olio, of the 8th Civil Court of São Bernardo do Campo, suspended, until July 10th, the payment of all debts owed by a company undergoing judicial reorganization. The suspension was supported by the judicial administrator and the Public Prosecutor's Office.

The judge highlighted that all obligations agreed upon in the judicial reorganization plan have been regularly fulfilled by the company, both those prescribed in 2016 and those resulting from an addendum, also approved by the court, in August 2018.

“Covid-19 constitutes an extraordinary event, of global scope, inevitable and unpredictable, which seriously impacts the livelihoods of businesses and families. The measures to combat the pandemic, as rightly pointed out by the judicial administrator, have reverberated at the regulatory level,” he stated.

Dall'Ollio based the decision on Recommendation 63 of the National Council of Justice, which guides judges to consider the occurrence of force majeure or fortuitous event to relativize the application of article 73, item IV, of Law 11.101/2005, as is the case in these proceedings.

"In short, the occurrence of force majeure (the Covid-19 pandemic) is evident, requiring an episodic relativization of the judicial reorganization plan to enable overcoming the economic and financial crisis resulting from Covid-19, while simultaneously maintaining the productive source, workers' jobs, and the interests of creditors," he concluded.

Thus, the judge suspended until July 10th the payment of all credits, not only those registered in classes III and IV, as had been requested by the company undergoing judicial reorganization: “The company, its social function, and the stimulus to economic activity are preserved, rebalancing the obligatory relationship established in the judicial reorganization plan, which I maintain intact.”

Case No. 1024091-12.2014.8.26.0564

Source: Conjur