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Covid-19 | Fortaleza/CE Court suspends the fulfilment of judicial reorganization plan due to the pandemic
By a ruling issued on 5/14/2020 (full wording here), the judge of the 2nd Court of Bankruptcy and Judicial Reorganization of Fortaleza/CE granted the suspension, for 90 days, of the payments provided in a judicial recovery plan.
The debtor requested the suspension of the obligations provided in the judicial reorganization plan arguing that the interruption of the non-essential activities due to the Covid-19 pandemic caused its operation to decrease dramatically, making it impossible to pay the creditors, which was accepted by the judge.
The judge also pointed out that there will be no losses to creditors, “as they will receive the amounts in accordance with the plan, allowing companies not to be declared bankrupt and, consequently, maintaining jobs.”
So far, no appeals have been filed against the ruling.
Recently, the Court of Appeals of São Paulo has been rejecting similar requests stating that the Court should not interfere in the judicial reorganization plan, as it is incumbent upon the debtor and creditors, if appropriate, to negotiate an amendment to the plan with new payment conditions, according to the rulings that can be accessed here.
