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Brazilian Superior Court of Justice acknowledges the possibility of the enforcement of fiduciary assignment of receivables granted by company under judicial reorganization, even during the stay period
In a decision rendered in the Special Appeal n. 1.758.746/GO on September 25, 2018 (published in the court’s official gazette on October 1st, 2018), the 3rd Chamber of the Brazilian Superior Court of Justice (“BSCJ”), reported by Justice Marco Aurélio Bellizze, acknowledged that the “credit assigned as a fiduciary guarantee” is not an essential asset of the debtor and therefore can be enforced by the creditor, even during the 180-day timeframe of suspension of executions against the debtor (article 6th, §4th, of Law n. 11.101/2005), commonly referred to as the stay period.
In this court precedent, the BSCJ adopted a restrictive interpretation the term “capital goods” set forth in article 49, §3rd, of Law 11.101/2005, which would prevent the creditor from enforcing a fiduciary guarantee during the stay period. In this case, the BSCJ stated that “for the purposes of application of §3rd of article 49, the capital goods, as referred therein, must be comprehended as the asset used in the productive process of the debtor, whose essential characteristics are: a physical asset (movable or not movable), which is found in the direct possession of the debtor, and, above all, which is not perishable or consumable, so that it can be delivered to the holder of the fiduciary ownership, in case the insolvency persists by the end of the stay period”.
The BSCJ stated that the credit right which was fiduciary assigned by the debtor does not fit in the classification above and thus cannot be considered a “capital good”. As a result, the guarantee can be enforced by the creditor during the stay period.
