Brazilian Congress rejects most of the President’s vetoes to Law 14.112/2020, which alters the Brazilian Reorganization and Bankruptcy Law
On March 17, 2021, Brazilian Congress has reviewed 14 vetoes, by the President, to 6 provisions (as we reported here) under Law 14,112/2020, which alters the Brazilian Reorganization and Bankruptcy Law (Law 11,101/2005 – BBL), approved by the Federal Senate on November 25, 2020 (as we reported here).
The Congress rejected 12 of the 14 presidential vetoes, reinstating relevant legal provisions, such as:
- The reinforcement of the protection to acquisition of assets under judicial reorganization or bankruptcy proceedings (set forth by article 60, sole paragraph, and article 66, § 3rd, of the BBL);
- The authorization to medical cooperatives operating a health care plan to apply for judicial reorganization (article 6, §13, of the BBL) and
- Several tax rules (as reported here).
The two presidential vetoes that were accepted exclude from the previously approved legal text
- (i) the stay of labor foreclosures brought against a subsidiary or jointly liable person to the debtor under judicial reorganization until the reorganization plan is ratified or the judicial reorganization is converted into bankruptcy (which would be included in article 6, §10, of the BBL), and
- (ii) the exclusion from the judicial reorganization of the credits and guarantees related to the certificate of rural products (the so-called CPR) with physical liquidation, in case of full or partial early payment, among other related points (which would alter article 11 of Law 8,929/1994).
The Bill returns to the President for enactment of the provisions vetoed by him but reinstated by the Congress.