The New Theories on Business Judicial
Reorganization in the Brazilian System
By Dr. Daniel Carnio COSTA, Permanent sitting Judge at the 1st Court of Bankruptcies and Judicial Recoveries of Sao Paulo, Professor at the Academia Paulista de Magistrados.
The Brazilian Legislation on bankruptcy is inspired on the US
Bankruptcy Code when it comes to business reorganization[1].
It is important to note, however, that the legislations are not the same, but
the Brazilian legisAlegreyars have looked to the same principles of the Chapter 11
of the US Bankruptcy Code to build the Brazilian Business Reorganization in
2005, in order to create in a similar way some important institutes like the
stay period, the plan of reorganization and the creditors meeting, among
others.
A
general overview of the insolvency systems around the world shows us that
before the US Bankruptcy Code of 1978 with the amendments of 1984 and 2005
there were only two insolvency models: creditor oriented legislations and
debtor oriented legislations[2].
The
US Business Reorganization has inaugurated a legislation that was not in favor
of the creditor, nor in favor of the debtor. The system was built focusing on
social benefits generated by the fact of keeping the business running. According
to Collier on Bankruptcy,
“Chapter 11 embodies a
policy that it is generally preferable to enable a debtor to continue to operate
and to reorganize or sell its business as a going concern rather than simply to
liquidate a troubled business. Continued operation may enable the debtor to
preserve any positive difference between the going concern value of the
business and the liquidation value. Moreover, continued operation can save the
jobs of employees, the tax base of communities, and generally reduce the
upheaval that can result from termination of a business”[3].
In
this sense, the creditors and the debtor must comply with the reorganization
proceeding, acting in a collaborative way in order to ensure the best result of
the case, preserving the business in function and therefore the jobs, revenues
and all the good social effects that come from the company’s activities.
This
principle has inspired the Brazilian legisAlegreyar to enact the article 47 of the
Law 11.101/05 which says:
“The
judicial reorganization aims to facilitate the overcoming of the situation of
economic and financial crisis of the debtor in order to allow the maintenance
of the production source, employment of workers and the interests of the
creditors, thereby promoting the preservation of company, its social function
and stimulating economic activity.”
Based
on this comparative analysis, we can affirm that the business reorganization in
Brazil must comply with two new principles: the overcoming of the pendular
dualism and the balanced sharing of the burdens[4].
Observing
the development of the insolvency legislation throughout history, in the world
and in Brazil, we can affirm that bankruptcy has evolved from individual and
personal execution to collective process. The concepts of property of estate on
bankruptcy and par conditio creditorum,
created by Lex Iulia during the Roman
Empire, are the result of this evolution[5].
The
granting of the recovery possibility arose initially as a possibility of
payments to creditors, with the protection of the debtor against corporal
punishment. The institute evolved from the creditor's option to be considered
as a benefit to be granted by the State[6].
During
the colonial period in Brazil, the first legislation that addressed the issue
of insolvency were the Manoelinas Ordinances (1521) and the Philippines
Ordinances (1603) – issued in Portugal - which established the arrest of the
debtor to pay the debt. However, the debtor could assign its assets to
creditors in order to avoid the imprisonment. It is observed in this period a
strong medieval influence, providing rigorous and criminal treatment of bad
faith debtors[7].
After
that, the Decree of 11.13.1756 (Marques de Pombal) established the new
bankruptcy system, which was suitable exclusively for entrepreneurs[8].
In
the period following the independence of Brazil, there was the Commercial Code
of 1850 as the leading insolvency law. Bankruptcy has become characterized by
the cessation of payments by the debtor. The bankruptcy was only granted if
there was agreement from the majority of the creditors[9].
The
Decree 917/1890 has created means to avoid liquidation: moratorium, assignment
of assets, and extra-judicial and preventive bankruptcy agreement[10].
However,
the new legal tools to avoid liquidation have started to be used fraudulently
by the debtors. In this sense, in response to the proliferation of fraud in
insolvency proceedings, it was enacted the Law 859/1902, which provided for a
crackdown on abuse resulting from the moratorium[11].
The
Law 2024/1908 improved the Brazilian system creating some important features:
the definition of lateness as a cause of failure; characterization of acts of
bankruptcy; suppression of friendly bankruptcy, having remained only a judicial
composition; definition of bankruptcy crimes; liquidators number of the
establishment in bankruptcy proceedings (01-03), chosen among the largest
creditors, depending on the value of the bankruptcy estate.
Further,
as a result of the economic crisis and the need for the preservation of the
companies, Law 5746/1929 has again extended the possibility of recovery of the
company, creating percentages of credit to grant bankruptcy and reducing the number
of liquidators for just one, thereby facilitating the access of entrepreneurs
to overcome the crisis[12].
The
Decree-Law 7661/45 has strengthened the powers of the judge, reducing the
influence of the meetings of creditors and established bankruptcy (preventive
and suspensive) as a benefit to be granted by the State.
This
law remained in force until 2005, when it was replaced by the current
Bankruptcy Law 11,101/05.
The
Law 11.101/05 has an eminently social nature, with the recognition of the
social function of the company. Accordingly, it grants the possibility of the
business reorganization, to preserve the social and economic benefits arising
from the viable business activity (jobs, income, tax collection, movement of
goods and services etc.).
During
the evolution of the bankruptcy system, it is clear that the pendulum of the
legal protection swings from the debtor protection to the creditor protection.
In terms of insolvency law, the greater possibility of recovery by the
moratorium is evidence that the legislation is debtor oriented. On the
contrary, the smaller the moratorium possibilities, the more prestigious the
equity interests of creditors[13].
It
is clear that, during periods of economic crisis, the legislation has
stimulated the moratorium. However, as a reaction to the abuse the debtors, the
law used to bring limitations to the use of moratorium instruments, including
giving criminal treatment to such fraudulent conduct. So, the legal protection
pendulum goes from the creditor’s side to the debtor's side according to the
need of business's stimulation or due the fraudulent conduct of the debtors.
This is what Fabio Konder Comparato[14]
called pendular dualism in protecting the interests of creditors or debtors
with regard to insolvency law.
The
great evolutionary leap represented by Law 11,101/05 was the recognition of the
social function of business activity and the need to preserve this activity as
maintenance assumption of all social and economic benefits arising from it.
Moreover,
there was also recognition of the need to create an enabling environment for
negotiation between creditors and debtors in order to find the best solution
for the company's crisis. The social interest represented by the preservation
of social and economic benefits arising from the running business must prevail
over the private interest of the debtor or creditors.
The
observation of what happens in legislative reforms over time highlights the
existence of a constant pendulum that swings in protecting creditor or debtor
(the poles of the relationship of substantive law)[15].
This
phenomenon is also observed in relation to the Court’s interpretation of the
law. So, not only the law takes sides in protecting creditor or debtor, but
also the Courts seek to apply the law always in favor of the plaintiff or the
defendant in a particular case[16].
However,
the adequate interpretation of the Brazilian Bankruptcy Law, having in mind the
article 47[17]
and the principles that come from the US Bankruptcy Code – which is a source of
inspiration for the Brazilian law – leads us to the need of overcoming this
dualism pendulum. It is necessary to move the focus of interpretation for the
search of the useful purpose of the legal institution. The purpose of the
institute and the proper functioning of the legal system should take precedence
over the protection of the interest of creditor or debtor.
The
legal pendulum has swung between creditor and debtor during the evolution of
the institute, however it is the time to recognized that the pendulum should be
shifted from the parties (creditor and debtor) for the best result of the
reorganization proceeding and the effective implementation of the institute's
own purpose.
Thus,
the adequate interpretation when it comes to business reorganization is that
which leads to always honor the recovery of business activity in the light of
relevant social benefits that result, despite the particular interest of one
creditor or the debtor. One should always seek the fulfillment of employment,
payment of taxes, heating of economic activity, income, earnings, movement of
goods and wealth, even if it is given to the detriment of immediate interest of
the debtor itself or creditors[18].
It
is important to note that the business reorganization is not an absolute goal.
It should only be made on the basis of relevant social benefits that will be
produced due to the preservation and recovery of productive activity. If the
company is not able to generate the social benefits, which the law intends to
preserve, the bankruptcy liquidation will be the best option in order to meet
the social interest[19].
The
Brazilian Courts have already recognized the application of the theory of the
overcoming of the pendular dualism. In In
Re Intervia Tecnologia Ltda – ME, the trial judge has given an adequate
interpretation to the article 51 of the Law 11,101/05, according to the theory
of the overcoming of the pendular dualism. It was decided the following:
“The
complaint for business reorganization must be accompanied by financial
statements, the balance sheet, the statement of retained earnings and from the
last fiscal year, as well as management of cash flow and its projection report.
It requires also a full report of the company's economic and commercial
situation. […] This is because the purpose of the law is to ensure the
continuity of business activity due to the social benefits deriving from it,
such as generation and circulation of wealth, payment of taxes and, especially,
employment and incomes. The simple decision authorizing the beginning of the
business reorganization generates, by itself, the automatic stay, preventing
the creditors from taking or continuing actions against the property of the
company (debtor) for a period of 180 days (stay period), among other important
legal consequences set out in art. 52 of the Brazilian Bankruptcy Law. […]
(The) preliminary analysis of such documents requires technical knowledge in
order to understand the real meaning of the data reported by the debtor as well
as the correspondence of such information with the reality of facts. The
preliminary analisys is fundamental to ensure that the business reorganization
proceeding could be used properly, fulfilling its social function, without
imposing unreasonable burdens and losses to the community of creditors. […] In
this sense, despite the Law 11,101/05 does not require a previous expert
analysis of the documentation submitted by the applicant company for business
reorganization, the fact is that such expertise analisys should be inferred as
a logical consequence of the legal requirements established as a condition for
approval of its processing, namely, the regularity of the documentation
presented by the debtor. […] The experience in the First Bankruptcy Court of
São Paulo has shown that inadvertent approval of the beginning of the business
reorganization, based solely on a formal check-list of the documents submitted
by the debtor, has served only to worsening the situation of creditors without any
benefit to the business activity […] So, based on that interpretation of the
law, before deciding on the beginning of the business reorganization, I
determine a previous expert examination on the real operating situation of the
company and also on the documents presented by the company, in order to check
its correspondence with fiscal and trade books”[20].
The
Intervia Tecnologia Ltda – ME has filed an interlocutory appeal seeking for the
reversal of the judge’s decision saying that the Law does not leave any room
for the determination of an expert examination. According to the company, the
article 51 should be interpreted literally. The Supreme Court of São Paulo
upheld the decision saying that the interpretation of the law must comply with
the best result of the reorganization proceeding and the effective
implementation of the institute's own purpose. Thus, the judge, when interpreting
article 51, can determine a expert examination on the documents and also on the
operating conditions of the company, since the business reorganization should
only be made on the basis of relevant social benefits that will be produced due
to the preservation and recovery of productive activity. If it is possible to
determine, even before the beginning of the case, that the company is not able
to generate the social benefits, which the law intends to preserve, the
beginning of the business reorganization proceeding must be denied in order to
meet the social interest.
It
was already said that the Brazilian legislation on bankruptcy is inspired by
the US Bankruptcy Code when it comes to business reorganization[21].
In this sense, it is possible to affirm that the principles that govern the
business reorganization in the US Bankruptcy Code (Chapter 11) may be used as a
source of interpretation of the Brazilian legislation.
In
the US system of business reorganization (Bankruptcy Code - 11 USC Chapter 11),
confirmation or approval of the plan depends on the judicial finding of some
requirements or standards to ensure that the burden of business recovery are
divided evenly between creditor and debtor.
Even
in the case of plans accepted by every class, section 1129 (a) of the
Bankruptcy Code sets out 16 requirements that must be met as a condition for
the approval of the plan submitted by the debtor. It ensures that the recovery
plan is fair and has economic sense[22].
The
US Business Reorganization system has been built focusing on social benefits
generated by the fact of keeping the business running[23].
Therefore, creditors and the debtor must act in a collaborative way in order to
keep the business running in function of the jobs, revenues and wealth that
arises from the company’s activities.
So,
it shows that the US Business Reorganization system is also governed by the
principle of the balanced sharing of the burden of the reorganization proceeding.
It
should be noted, therefore, that in the American system, the judicial balancing
in the sharing of the burden of the reorganization proceeding between debtor
and creditors may be done, for instance, by checking standards as fairness,
feasibility, best interests of creditors, special treatment for priority
claims, among others.
Although
Brazilian law is silent regarding the judicial control of the balancing of the
sharing of the burden of the business reorganization, its realization is
essential to ensure the practical result of the recovery of companies and it
is, obviously, a necessary consequence of the system[24].
In
the Brazilian system, the business reorganization must comply with article 47
of the Law 11.101/05[25].
So, it is possible to affirm that the use of this legal tool in Brazil only
makes sense on the basis of the achievement of the social and economic benefits
resulting from the continuation of the business activities. It is also true
that the business reorganization should rest on the assumption of the sharing
of its burden between debtor and creditors, because the Law does not seek the
protection of the rights of creditors, nor the protection of the interests of
the debtor. Every player involved in the proceeding must collaborate in order
to ensure the reaching of the social interest.
Creditors
shall bear losses in the short and medium term, considering that they will be
prevented from carrying out their claims for a certain period of time (stay
period). In addition, the creditors shall support a plan of reorganization that
may involve, as it usually occurs, an extra time for the payment of the
obligations of the debtor. The plan may also bring haircuts or discounts for
the due payments[26].
However,
in the other hand, the business reorganization shall be good for the creditors
in the medium and long term, since they will receive their credits, although in
new terms. In addition, the creditors will have the possibility of compensating
their losses in the medium or long term, whereas the company will continue in
function and, therefore, it will continue to negotiate with its suppliers[27].
So
it is important to note that the burden borne by the creditors makes sense only
if the company meets the goals of the business reorganization. In other words, the
creditors shall bear their burdens only if the debtor keeps on running,
generates jobs and creates all the other benefits that arise from the effective
exercise of its activities.
The
debtor must also bear its burdens. The company must act transparently and in
good faith, keep jobs, collect taxes, produce and circulate goods and services
and ultimately preserve the economic and social benefits that are sought with
the maintenance of business activity. The company in bankruptcy protection has
the obligation to seek at all costs to preserve the social and economic
benefits sought by the institute of the business reorganization[28].
The
debtor must also present a recovery plan that can be considered feasible,
reasonable and fair. The plan must make economic sense, within the balanced
division of burdens between creditors and debtors[29].
In
addition, the debtor shall promptly meet the requirements set out by the judge.
The debtor must be collaborative with the trustee and must also fulfill
faithfully the proceeding deadlines. The debtor must act aligned with the
purpose of the procedure and therefore must always be guided by absolute
transpareny and good faith, as a logical consequence of the principle of a
balanced sharing of burdens[30].
In
the Brazilian system, the trustee and the judge have the duty of monetizing the
adequate sharing of the burdens in the business reorganization proceeding.
The
trustee must pay closely attention at the conduct of the debtor for the proper
exercise of their function. The trustee will not take over the management of
the company, but must be very careful in monitoring the business activities
made by its officers in order to make sure that the resources earned by the
debtor during the stay period are being applied to activities consistent with
the Institute purposes. Likewise, should the trustee monitor very closely the
respect of deadlines by debtor as well as its procedural conduct, which must
also be compatible with the purpose of the reorganization.[31]
The
judge will control the sharing of burden when analyzing the debtor’s conduct
during the case and the negotiation between creditors and debtor. The judge
must prevent the abuse of the dominant position by some creditor during the
negotiation of the plan. In the same sense, the judge must check the legal
boundaries of the plan. It is not appropriate to confirm a plan with illegal,
fraudulent or unfair clauses[32].
The
Brazilian law says nothing about the judicial control over the plan. The
article 58 of the Law 11,101/05 determines the judicial confirmation of the
plan if its clauses have been approved at the creditor’s meeting.
According
to article 58,
“ Fulfilled
the requirements of this Law, the judge will grant the business reorganization
of the debtor whose plan has not suffered creditor’s objection pursuant to art.
55 of this Law or has been approved by the general meeting of creditors
pursuant to art. 45 of this Law” [33].
Again,
it is important to point out that, despite the absence of explicit regulation
on the judicial control of the plan, it is possible to use the US model as a
complementary source of interpretation of the Brazilian law. Since the US
Bankruptcy Law is governed by the balanced sharing of the burdens, it is
possible to affirm that the Brazilian judge can use the essence of the
standards laid down by Section 1129(a), if they are compatible with the
Brazilian law[34].
Therefore,
there is no doubt that the Brazilian judge must control the legal boundaries of
the plan. But, in addition to it, the judge must also ensure the feasibility
and the fairness of the plan by preventing abuse and fraud.
The
Brazilian Courts have already recognized the judicial control power over the
legal aspects of the plan and also the control over the feasibility, fairness,
best interest of the creditors, good faith and prevention of fraud. In In Re CONSTRULEV INDÚSTRIA E COMÉRCIO DE
PLÁSTICOS LTDA[35],
the 1st Bankruptcy Court of São Paulo has approved the plan, after
doing the judicial analysis over the plan. The Itaú Bank, as a creditor, has
filed an interlocutory appeal seeking for the rejection of the plan on the
basis that it should be considered unfair in comparison to the conditions
offered to other creditors, and also abusive since it has imposed a
disproportionate loss to some creditors. The Supreme Court of São Paulo upheld
the decision, saying that there was no abusive clause, nor unfair treatment of
the creditors. In addition, the Court has said:
“If the
plan approved by the AGC depends on the Court approval, it is because “there is
a public policy, which requires the court to observe more than just its
legality and constitutionality, but also ethics, good faith, respect for
creditors and the manifest intention to meet the recovery target, under the
penalty of breaking the spirit of Law n. 11,101/2005” [36].
Note that the default by debtor of its burdens may cause the conversion of the bankruptcy reorganization into bankruptcy liquidation. Although there is no rule on that in the Brazilian law, it seems clear that the disappearance of the fundamentals of the institute of the business reorganization should cause the convertion of the case into a liquidation of the company based on the theory of the balanced sharing of the burdens[37].
It
is important to bear in mind that the Brazilian Bankruptcy System has found
inspiration in the US Bankruptcy Code. Therefore, the interpretation of the
Brazilian law can take some features from the US Bankruptcy System as a manner
of improving the application of the law and ensuring the best result for the
case.
In
this sense, the theory of the overcoming the dualistic pendulum has been
created in Brazil, based on the observation of the evolution of the insolvency
systems worldwide, but mainly on the fact that the US Bankruptcy Code has
inaugurated a new insolvency model where the social interest must prevail over
the particular interest of debtors and creditors. So, in Brazil, as it is being
done in the US, the insolvency law must be applied in accordance to social
interest. The business reorganization must be interpreted in order to ensure
the maintenance of the production source, employment of workers and the
interests of the creditors, thereby promoting the preservation of the company,
its social function and the stimulation of economic activity.
The
theory of the balanced sharing of burden of the business reorganization also
rests its basis on the US Bankruptcy system. This theory is based on the
observation of the US system of the judicial control over the plan of
reorganization. In the US Bankruptcy Code, the judge ought to check the plan
approved by the creditors in order to find its compliance with some standards
that ensure the adequate sharing of the burdens among creditors and debtors.
Based
on this idea, and according to this new theory, the Brazilian Courts have
decided that the Brazilian judge, despite the absence of an explicit legal
rule, has the power of observe the legality and constitutionality of the plan
of reorganization. Further, these judges can decide the ethics, good faith,
respect for creditors, and the manifest intention to meet the recovery target
under the penalty of breaking the spirit of Law n° 11,101/05.
[1] D. Costa, “Novas Teorias Sobre Processos De Insolvência E Gestão
Democrática De Processos”, Comentáros À
Nova Lei De Recuperação De Empresas E De Falências, Juruá, 2015.
[2] Ibidem, note 184, pp. 134-135.
[3] A. Resnick;
H. Sommer, Collier on Bankruptcy, Matthew Bender Elite Products, 7-1100
Collier on Bankruptcy P 1100.01 (15th 2015).
[4] D. Costa, op. cit. note
302, pp. 17-62.
[5] E.
Perin Jr, op. cit. note 233, pp.
30-32.
[6] D. Costa, op. cit. note
302, pp. 32.
[7] E.
Perin Jr, op. cit. note 233, pp.
36-37.
[8] W. Ferreira, Instituições
de Direito Comercial, 4th edition, Max Limonad, 1955
[9] E.
Perin Jr, op. cit. note 233, p.
38.
[10] E.
Perin Jr, op. cit.. pp. 39-40.
[11] Ibidem, p. 40.
[12] Ibid. p. 41.
[13] D. Costa, op. cit.. note
302, p. 33.
[14] T. Azeredo, “Parecer
apresentado por Theophilo de Azeredo Santos ao IASP sobre o Projeto de Lei
4.376/93”,
http://www.egov.ufsc.br/portal/sites/default/files/anexos/9567-9566-1-PB.pdf.,last
visited in 18/08/2015
[15] See Evolution of the bankruptcy
legislation in Brazil and the existence of the pendular dualism, D. Costa, Op.cit. Part IV, A, I..
[16] D. Costa , op. cit..
note 302, at 34.
[17] Brazil, Lei no
11.101, de 9 de fevereiro de 2005, Diário Oficial da
União (D.O.U.) de 09.02.2005. (Braz.), Art. 47 “The judicial reorganization aims to facilitate the
overcoming of the situation of economic and financial crisis of the debtor in
order to allow the maintenance of the production source, employment of workers
and the interests of the creditors, thereby promoting the preservation of
company, its social function and stimulating economic activity”.
[18] See the judicial decision, infra note 324.
[19] D. Costa , “Reflexões sobre
Processos de Insolvência: divisão equilibrada de ônus, superação do dualismo
pendular e gestão democrática de processos”,
10 Anos Da Lei De Recuperação
Judicial E Falências – Reflexões Sobre A Reestruturação Empresarial No Brasil,
Luis Vasco Elias, Quartier Latin, 2015, pp. 87-111
[20] Brazil,
TJSP, Agravo de Instrumento No. 0194436-42.2012.8.26.0000, ReAlegreyar: Des.
Teixeira Leite, 02.10/2012, Diário Oficial do Estado de São Paulo (D.O.E.S.P.),
06.10.2012.
[21]See The New Theories in the Braziliam System
Inspired on the US System, op. cit. Part IV
[22] 11 U.S.C. § 1129(a) (2005). “The court shall confirm a plan only if all of the following requirements
are met:(1)The
plan complies with the applicable provisions of this title. (2)The proponent of the plan complies
with the applicable provisions of this title. (3)The plan has been proposed in good
faith and not by any means forbidden by law. (4)Any payment made or to be made by
the proponent, by the debtor, or by a person issuing securities or acquiring
property under the plan, for services or for costs and expenses in or in
connection with the case, or in connection with the plan and incident to the
case, has been approved by, or is subject to the approval of, the court as
reasonable. (5)(A)(i)The proponent of the plan
has disclosed the identity and affiliations of any individual proposed to
serve, after confirmation of the plan, as a director, officer, or voting
trustee of the debtor, an affiliate of the debtor participating in a joint plan
with the debtor, or a successor to the debtor under the plan; and (ii)the
appointment to, or continuance in, such office of such individual, is
consistent with the interests of creditors and equity security holders and with
public policy; and (B)the
proponent of the plan has disclosed the identity of any insider that will be
employed or retained by the reorganized debtor, and the nature of any
compensation for such insider. (6)Any governmental reguAlegreyary commission with jurisdiction, after
confirmation of the plan, over the rates of the debtor has approved any rate
change provided for in the plan, or such rate change is expressly conditioned
on such approval. (7)With
respect to each impaired class of claims or interests— (A)each holder of a claim or interest
of such class— (i)has
accepted the plan; or (ii)will receive or retain under the plan on account of such claim
or interest property of a value, as of the effective date of the plan, that is
not less than the amount that such holder would so receive or retain if the
debtor were liquidated under chapter
7 of this title on such date; or
(B)if section 1111(b)(2) of this title applies
to the claims of such class, each holder of a claim of such class will receive
or retain under the plan on account of such claim property of a value, as of
the effective date of the plan, that is not less than the value of such
holder’s interest in the estate’s interest in the property that secures such
claims. (8)With
respect to each class of claims or interests— (A)such class has accepted the plan;
or (B)such
class is not impaired under the plan. (9)Except to the extent that the holder of a particular claim has
agreed to a different treatment of such claim, the plan provides that— (A)with
respect to a claim of a kind specified in section 507(a)(2) or 507(a)(3) of
this title, on the effective date of the plan, the holder of such claim will
receive on account of such claim cash equal to the allowed amount of such
claim; (B)with
respect to a class of claims of a kind specified in section 507(a)(1), 507(a)(4), 507(a)(5), 507(a)(6),
or 507(a)(7) of
this title, each holder of a claim of such class will receive—
(i)if such class has accepted
the plan, deferred cash payments of a value, as of the effective date of the
plan, equal to the allowed amount of such claim; or (ii)if such class has not accepted the
plan, cash on the effective date of the plan equal to the allowed amount of
such claim; (C)with
respect to a claim of a kind specified in section 507(a)(8) of this title,
the holder of such claim will receive on account of such claim regular
installment payments in cash— (i)of a total value, as of the effective date of the plan, equal
to the allowed amount of such claim; (ii)over a period ending not later
than 5 years after the date of the order for relief under section 301, 302, or
303; and (iii)in
a manner not less favorable than the most favored nonpriority unsecured claim
provided for by the plan (other than cash payments made to a class of creditors
under section 1122(b); and (D)with respect to a secured claim which would otherwise meet the
description of an unsecured claim of a governmental unit under section
507(a)(8), but for the secured status of that claim, the holder of that claim
will receive on account of that claim, cash payments, in the same manner and
over the same period, as prescribed in subparagraph (C). (10)If a class of claims is impaired
under the plan, at least one class of claims that is impaired under the plan
has accepted the plan, determined without including any acceptance of the plan
by any insider. (11)Confirmation
of the plan is not likely to be followed by the liquidation, or the need for
further financial reorganization, of the debtor or any successor to the debtor
under the plan, unless such liquidation or reorganization is proposed in the
plan.(12)All
fees payable under section
1930 of title 28, as determined by the court at the
hearing on confirmation of the plan, have been paid or the plan provides for
the payment of all such fees on the effective date of the plan.
(13)The plan provides for the
continuation after its effective date of payment of all retiree benefits, as
that term is defined in section 1114 of this title,
at the level established pursuant to subsection (e)(1)(B) or (g) of section 1114 of this title,
at any time prior to confirmation of the plan, for the duration of the period
the debtor has obligated itself to provide such benefits. (14)If the debtor is required by a
judicial or administrative order, or by statute, to pay a domestic support
obligation, the debtor has paid all amounts payable under such order or such
statute for such obligation that first become payable after the date of the
filing of the petition. (15)In a case in which the debtor is an individual and in which
the holder of an allowed unsecured claim objects to the confirmation of the
plan— (A)the
value, as of the effective date of the plan, of the property to be distributed
under the plan on account of such claim is not less than the amount of such
claim; or (B)the
value of the property to be distributed under the plan is not less than the
projected disposable income of the debtor (as defined in section 1325(b)(2)) to
be received during the 5-year period beginning on the date that the first
payment is due under the plan, or during the period for which the plan provides
payments, whichever is longer. (16)All transfers of property under the plan shall be made in
accordance with any applicable provisions of nonbankruptcy law that govern the
transfer of property by a corporation or trust that is not a moneyed, business,
or commercial corporation or trust.
[23] See
the new theories, op. cit. note 324.
[24] D. Costa, “Reflexões sobre
processos de insolvência: divisão equilibrada de ônus, superação do dualismo
pendular e gestão democrática de processos”, Cadernos Jurídicos V 16, pp. 59-77.
[25] See
the new theories, D. Costa, s. note 324.
[26] D.
Costa, “A divisão equilibrada de ônus na recuperação judicial da empresa” Falência,
Insolvência E Recuperação De Empresas – Estudos Luso-Brasileiros, Newton de
Lucca and Miguel Pestana de Vasconcelos, Quartier Latin, 2015 pp. 47-63.
[27] D. Costa , op.
cit.. note 304, at 24.
[28]D. Costa, op.
cit. note 304, at 24.
[29] Ibidem. at 25
[30] D. Costa , Op. ct. note 329.
[31] D. Costa, “Divisão equilibrada
de ônus da Recuperação”, O Valor
Econômico, march 20, 2014, at E1.
[32] D. Costa, “Teoria da Distribuição Equilibrada
dos ônus na Recuperação Judicial da Empresa”, Carta Forense, november 7, 2013, B18 - B18.
[33] Lei no
11.101, de 9 de fevereiro de 2005, Diário Oficial da
União (D.O.U.) de 09.02.2005. (Braz.), Art 58.
[34] D. Costa , op. cit.. note 302, at. 26.
[35] Brazil, TJSP,
Agravo de Instrumento No. 2147847-50.2015.8.26.0000, ReAlegreyar: Des. Maia da
Cunha, 28.10.2015, Diário Oficial do Estado de São Paulo (D.O.E.S.P),
03.11.2015 .
[36] Brazil, TJSP,
Agravo de Instrumento No. 2147847-50.2015.8.26.0000, ReAlegreyar: Des. Maia da
Cunha, 28.10.2015, Diário Oficial do Estado de São Paulo (D.O.E.S.P),
03.11.2015.
[37] D. Costa , op.
cit. note 302, at 25.