On May 12, 2021, the 2nd Section of the Superior Court of Justice (SCJ), in the trial of the Special Appeal No. 1.794.209/SP, ruled that the suppression of personal and secured guarantees provided in a judicial reorganization plan shall only be effective in relation to the creditors which approved the plan without any reservation.
According to the Reporting Justice Ricardo Villas Boas Cueva, a provision which extends the novation deriving from the plan to co-obligors of the restructuring company would only be enforceable against creditors which approved the plan without any reservation. Therefore, the provision would have no effects to the creditors which were not present in the general creditors’ meeting, abstained from voting or voted against such provision.
Justices Marco Buzzi, Raul Araújo, Nancy Andrighi and Antonio Carlos Ferreira followed the vote of the Reporting Justice. Justices Paulo de Tarso Sanseverino, Marco Aurélio Bellizze e Moura Ribeiro opined differently from the Reporting Justice, but were outvoted.
Justice Luis Felipe Salomão, in turn, followed the majority regarding the impossibility of suppression of personal guarantees, without acceptance of the creditor, but stated that, in his view, the suppression of securities in rem by the plan would be possible, due to the lack of legal prohibition thereof. However, his position did not prevail.
The full text of the ruling has not yet been made available by the SCJ. The video of the trial, with the opinions therein expressed by the Justices, can be accessed via the SCJ’s YouTube channel.