Cram down and the Abusive Exercise of the Right to Vote by the Creditor: an Analysis of the Legislator’s Democratic Intents and Recent Jurisprudence in Brazilian Courts

Abstract

This article aims at analyzing the democratic exercise of voting by creditors and its implication both in the result of the assembly and in the approval of the debtor’s judicial reorganization, according to the ordinary and extraordinary procedures of the Brazilian Bankruptcy and Judicial Reorganization Law (Law 11.101/2005). To that end, the main principles of the Brazilian reorganization system will be presented, as well as the cases that allow for judicial reorganization as expressly provided for in the law and their practical aspects. The article will also indicate the inclination and application of the possibilities of approval of a judicial reorganization by the Judiciary in face of the non-acceptance of the plan through ordinary voting, by instruments such as cram down and abusive exercise of the right to vote. Finally, it will address modern doctrines that have been accepted before Brazilian Courts, with comments based on the author’s practical experiences.