The new bankruptcy law (14.112/20) came into effect in January 2021. Among other points, the law allows companies to obtain financing during the judicial reorganization phase, authorizes the installment payment of federal tax debts, and provides for the presentation of a reorganization plan by creditors.

However, contrary to expectations, 2021 was not a favorable year for economic recovery. With the COVID-19 pandemic, restrictions on business operations, slow vaccination rates, unemployment, and hunger, the financial crisis persists, leading many Brazilian companies to file for bankruptcy protection in court.

According to data released by Serasa Experian, requests for judicial reorganization increased by 48.41% in May 2021, compared to April of the same year. A total of 92 requests were made in the month, mainly from micro and small businesses, the study says.

Compared to May 2020, there was a decrease of 2.1% in the total number of applications. Smaller companies, however, bucked the trend and showed growth during the period, going from 54 in May 2020 to 60 in the fifth month of this year.

According to data from Serasa Experian, the growth in judicial reorganizations has been paralleled by the increase in corporate defaults, with micro and small businesses being the most represented. The most recent analysis shows that they account for 92.41% of all legal entities with negative credit records.

Looking at the segments, the Services sector continues to stand out, with 62 orders in May/21, followed by Commerce (15) and Industry (12).
Meanwhile, bankruptcy filings increased by 58.51% in the monthly analysis of May and April 2021. There were 103 requests in the month, 70 of them made by micro and small businesses. There was also an increase in comparison with May 2020, of 28.81%.

Source: breadcrumbs

News commentary by Adriana Bettamio Tesser, Attorney. Graduated in Law in 2006 from FMU/SP. OAB/SP No. 257.277