On April 22, 2020, the Second Section of the Brazilian Superior Court of Justice (“STJ”) submitted Special Appeals nº 1.843.332/RS, 1.840.531/RS, 1.840.812/RS, 1.842.911/RS and 1,843,382/RS to the system of special appeals dealing with the same matter of law (recursos repetitivo1)—all reported by Minister Villas Bôas Cueva, under the theme 1,051—to define the moment when a credit emerges for the purpose of being subject to the effects of a judicial reorganization proceeding: whether it is the date of the triggering event of the credit or the date that the judicial decision that recognized such credit become final (res judicata).

In a decision rendered on December 9, 2020, the Second Section determined that a credit exists—for the purpose of subjecting it to the effects of a judicial reorganization proceeding—as of the date on which the triggering event took place.

According to the Reporting Justice, the idea that a credit emerges when the judicial decision that recognized such credit become final (res judicata) should not prevail. For him, such understating “starts from the assumption that only in situations in which the obligation is not fulfilled, requiring the intervention of the Judiciary for the provision to be satisfied, is it possible to consider the existence of the credit. However, the credit can be satisfied spontaneously, based on the terms agreed by the parties, extinguishing the obligation.

In addition, according to the Reporting Justice, this understanding is corroborated by art. 6, Paragraph 3 of Law 11.101/2005 (Brazilian Bankruptcy Code), which allows the Bankruptcy Judge to reserve the estimated amount of the credit before the termination of the lawsuit—for later, once the credit is recognized as unquestionable, to be included in the list of credits in the respective class.

Based on these arguments, the Reporting Justice concluded that subjecting a credit to the effects of a judicial reorganization proceeding does not depend on a judicial declaration or quantification and still less on the res judicata of such decision. For a credit to have to comply with the provisions of the reorganization plan depends on the date of  the occurrence of the triggering event. Thus, for example, once a harmful act has occurred, the right of indemnification (a credit) arises.

The Tauil & Chequer and Mayer Brown restructuring team remains available for clarification regarding this decision.

1 The claims are submitted to the system of recursos repetitivos  when there are (i) multiple appeals; (ii) based on the same matter of law. The objective is to standardize the treatment of all litigants who are in the same situation.