A Brazilian buyer that has entered recuperação judicial or falência does not respond to reminders or local counsel letters in the way a merely late payer does. Insolvency-driven recovery in Brazil means deciding, before anything else, whether the claim belongs in the insolvency case at all and whether filing it is worth the time that a Brazilian estate takes to close.
Once a debtor files for reorganisation or is declared bankrupt, individual collection actions against it generally stop. The creditor's route runs through the case itself: the claim is presented to the court-appointed administrator as a habilitação de crédito, supported by the invoice, the contract, proof of delivery or performance, and any correspondence that shows the debt is undisputed. The administrator reviews the filing, may accept it, reduce it or reject it, and places it in a class that determines the order of payment.
From there the case follows its own calendar: a reorganisation plan is proposed and voted by class, or the estate's assets are identified and sold in a liquidation. A foreign creditor sits inside that timetable exactly as a domestic one does. The practical question at the start is not the merits of the debt but whether the case has assets left to reach an unsecured commercial claim once secured, labour and tax creditors have been paid.
Three things carry the file. First, whether the documentation stands on its own, independent of anything the debtor still holds or is willing to confirm. Second, the class the claim falls into – secured, labour, tax and certain other categories are paid ahead of ordinary commercial debt, and that order is fixed by statute, not by negotiation. Third, whether the estate has unencumbered assets at all once those senior classes are satisfied.
A well-documented claim in a case with real assets and no serious dispute over the underlying contract moves through the administrator's review without much friction. A claim resting on partial delivery, an oral variation of the contract, or a debtor that denies the goods or services were ever accepted is a different exercise, and one that can require litigation on the merits before it is even admitted to the case.
Filing a habilitação, appearing before the administrator and, where needed, litigating a disputed claim are acts reserved to Brazilian counsel. SOLUTIO does not appear in the case itself. The work we carry out directly is the assessment: reading the claim against the class structure, checking the documentation for gaps, and researching the debtor's position through public filings, the case record and licensed corporate databases – legal research and corporate intelligence from public and licensed sources, not an inquiry into any individual.
The fee basis for that assessment, and for coordinating the filing that follows, is agreed with the client before instruction begins and depends on the size and shape of the file, not on a published rate.
We decide, jointly with the client, whether the claim is worth presenting to the case at all, prepare the file so it meets the administrator's evidentiary expectations, and brief the lawyer who files it. That lawyer, admitted and practising in Brazil, handles the habilitação, any hearing before the bankruptcy court and, if the claim is contested, the litigation that follows. We stay on the file to read the administrator's reports, flag distribution dates and confirm whether the plan or the liquidation still leaves anything for the class the claim sits in – a structure set out in more detail in our reference on creditor claims in Brazil.
That division holds for the length of the case, which in a reorganisation can run for years before a plan is confirmed or a liquidation is closed. Clients who need the debt resolved on their own balance sheet timetable, rather than the estate's, should know that before the file is opened.
Where any of these applies, we say so at the assessment stage rather than after the file has been opened with the court. This work sits alongside our broader practice in insolvency-driven recovery, which covers the same decision across other jurisdictions.
The creditor's claim is presented to the case administrator as a habilitação de crédito rather than pursued as a separate lawsuit. The administrator classifies the claim, and payment follows the order set by the plan or the liquidation, not the order in which creditors filed.
Yes. A foreign creditor files on the same basis as a domestic one, through Brazilian counsel, supported by documentation that establishes the debt independently. Nationality of the creditor does not change the class the claim falls into.
The fee basis for the assessment and for coordinating the local filing is agreed with the client before instruction, based on the size and complexity of the file rather than a fixed published rate.
An exporter holding an unpaid invoice against a Brazilian buyer that has just filed for reorganisation is used to chasing payment directly, and that route is no longer open once the case begins. Choosing whether to present the claim to the administrator, write it off, or wait for a plan that may never reach ordinary creditors is a decision made once, and made wrong it costs more than the invoice itself.