Americanas, 123 Miles, Starbucks: companies that went into judicial recovery or went bankrupt in 2023

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Until the third quarter, 3,872 companies were in judicial recovery in Brazil; remember the highlights of the year. Facade of Lojas Americanas in Franca, in the interior of SP. IGOR DO VALE/ESTADÃO CONTÚDO The announcement of a billion-dollar hole in Americanas’ accounts took everyone by surprise at the beginning of the year, but it was just a foreshadowing that 2023 would be full of requests for judicial recovery and bankruptcies of big corporate names in the country . As a report from g1 showed, there were 3,872 companies in judicial recovery in Brazil by the third quarter of this year, according to data from RGF Consultoria. In addition to Americanas, big names such as Light, Grupo Petrópolis, 123 Milhas and Grupo M5 (owner of the clothing brand M.Officer) are also on the list. Others, such as Livraria Saraiva and Livraria Cultura, had bankruptcy declared by the courts, with the second obtaining a decision to paralyze the process. Below, remember the main cases of judicial recovery and bankruptcy in 2023. Americanas Lojas Americanas do Resende Shopping, in Rio de Janeiro, in 2018 Emille Rodrigues/g1 The list starts with the most emblematic case. Retail giant Americanas reported a billion-dollar accounting loss on January 11th. At that time, the company said that it had identified “inconsistencies in accounting entries” in corporate balance sheets worth almost R$20 billion. Sergio Rial, then president of the company, decided to leave command of the business and investors — individuals and institutional — began a race to get rid of the shares. This caused the company’s shares to plummet almost 80% in a single day, and the flight continued in the following trading sessions. On January 19, Americanas requested judicial recovery in the Rio de Janeiro Court and had its shares removed from B3. The first version of the recovery plan was presented in March, but the company only had a plan approved on December 19th, exactly 11 months later. The final debt presented in the plan was R$50 billion and the recovery process will involve a contribution of R$12 billion from “reference shareholders — the trio of billionaires Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles — and the sale of assets, initially Hortifruti Natural da Terra and Uni.Co (franchise company for the Imaginarium and Puket brands). READ ALSO: POINT BY POINT: Understand the judicial recovery plan is approved by the Creditors’ Meeting UNDERSTAND THE CASE: Americanas collapses into stock exchange after discovery of R$ 20 billion loss CHRONOLOGY: See the chronology of the case, from ‘accounting inconsistencies’ to judicial recovery Oi Oi’s administrative headquarters operates in Leblon, South Zone of Rio Marcos Serra Lima/G1 Just a few months after Americanas , the mobile telephone operator Oi filed a new request for judicial recovery on March 1. The company was already familiar with this reality: the second recovery began a few months after the conclusion of another similar process, which took six years to complete. concluded. In the first process, Oi sold a series of assets, with emphasis on its mobile telephony operations to rivals Telefônica Brasil, TIM and Claro. The company’s recovery plan was accepted by its Board of Directors on May 19. As a result, the group’s debt of tens of billions of reais was suspended once again. The process also suspended the seizure of assets or search and seizure warrants against the company by its creditors. READ ALSO After 6 years in judicial recovery, Oi makes a new request to protect itself from creditors Oi’s Board of Directors approves a new judicial recovery plan Petrópolis Group The Petrópolis Group owns the brands Itaipava, Crystal and Petra, among others Disclosure O Grupo Petrópolis, owner of the Itaipava and Petra breweries, filed for judicial recovery on March 27, with a debt estimated at R$5.6 billion. The recovery plan went quickly and was accepted in September by creditors, with approval from 96.4% of voters. The group had a list of more than 5,000 creditors. According to the company, the reason for its debt was a large drop in the consumption of drinks produced by its brands. In a note, the company said that “31.2 million hectoliters of beverage [foram] sold in 2020. [Já], in the years 2021 and 2022, the volume fell to 26.4 and 24.1 million hectoliters, respectively”, a reduction of 15.4% and 22.7%, respectively. UNDERSTAND: Creditors approve the Group’s recovery plan Petrópolis, the company responsible for Itaipava and Petra Light beers Light Reproduction/Instagram/@lightcomvoce On May 12, another big name filed a request for judicial recovery. This time it was Light SA, controller of Grupo Light, an electricity supplier in the Rio de Janeiro, which made the request to the Court on an urgent basis, with a debt of R$ 11 billion, claiming that “the challenges arising from the current economic-financial situation” were getting worse. The main source of Light’s financial problem is the its energy distribution subsidiary. Although it is the company’s most relevant segment, it is also the most challenging area, as the company increasingly suffers from electricity theft in Rio de Janeiro, which reduces revenue and generates financial losses. In September, rumors circulated that the company had given up on judicial recovery, but Light maintains the process and, at the beginning of October, asked the Court for a 180-day extension of the deadline for suspending enforcement actions — which prevents debt collection from creditors so that the company can maintain its operations. The first meeting of creditors to discuss a judicial recovery plan should take place in March 2024. UNDERSTAND THE CASE: Light files a request for judicial recovery of R$ 11 billion M5 Group Showcase of one of M. Officer’s physical stores Reproduction/Instagram Successful in the 1990s and 2000s, Grupo M5, owner of the clothing brand M. Officer, had its request for judicial recovery accepted by the São Paulo Court on September 6, with a debt estimated at R$53.6 million. In the decision, the judge in the case, Maria Rita Rabello Pinho Dias, accepted the request, highlighting that the main reasons for the crisis faced by the company are: unbalanced competition with Asian retail giants; the economic consequences brought about by the covid-19 pandemic, a period in which M. Officer claims to have lost 91% of its sales volume; the great default of consumers. The firm TWK Advogados, which represents M5 in the process, highlights that the company generates around 130 direct jobs and hundreds of other indirect jobs, justifying the importance of the recovery. UNDERSTAND THE CASE: Court accepts request for judicial recovery from the owner of M. Officer; what happens now? 123 Milhas 123 Milhas Banner Reproduction/TV Globo After suspending packages and issuing tickets for its promotional line in August, travel agency 123 Milhas filed a request for judicial recovery on August 29, alleging that internal factors and external entities “have imposed a considerable increase on their liabilities in recent years.” The company said that the expected results with its promotional package were not achieved, at the same time that air ticket prices rose significantly post-pandemic. The request was accepted and, in September, provisionally suspended following a request from Banco do Brasil, one of the company’s main creditors. The Minhas Court, however, ordered the resumption of recovery on December 16th. MORE company responsible for Starbucks and Eataly operations in Brazil, filed for judicial recovery on October 31, alleging a debt of R$1.8 billion. According to information from the company, the request for recovery is due to the low level of confidence and high instability in Brazil, in addition to the volatility of the Selic, basic interest rate and constant exchange rate variations. These issues, says SouthRock, “unbalance the market and hit Brazilian entrepreneurs hard.” The company also blamed the economic crisis brought on by the Covid-19 pandemic. The request was accepted by the Court on December 12th. READ ALSO Parent company of Starbucks and Eataly files for judicial recovery Court accepts request for judicial recovery from SouthRock, operator of Starbucks in Brazil Livraria Saraiva Livraria Saraiva Disclosure Livraria Saraiva was declared bankrupt by the São Paulo Court. The request was made by the company itself within the judicial recovery process, due to a debt of R$675 million. In the decision, judge Paulo Furtado de Oliveira Filho recognized the “non-compliance with the judicial recovery plan and ordered the suspension of actions and executions against the bankrupt company and the presentation of the list of creditors”. The company had been in judicial recovery since 2018, after being unable to renegotiate debts with suppliers. A reference in the publishing market, with huge stores and a varied catalogue, Saraiva tried, as a last resort, to maintain its operation only in e-commerce and fire all employees from the in-person operation. In the same week that the company revealed the closure of all its physical stores, its president and vice president resigned from their positions. The following week, the self-bankruptcy request was filed. Livraria Cultura Livraria Cultura Reproduction The São Paulo Court declared the bankruptcy of Livraria Cultura in February. The decision was taken more than four years after the 2nd Bankruptcy and Judicial Reorganization Court of the Central Civil Forum accepted the company’s request for judicial recovery. At the time, the bookstore already claimed to be in an economic and financial crisis. The recovery request had reported debts of R$285.4 million – most of it with suppliers and banks. On the 16th, the company obtained an injunction to have its bankruptcy process suspended, requesting a review of the breach of the recovery process. In May, after the evaluation, Cultura once again had its bankruptcy declared by the São Paulo Court, and the stores closed. At the end of June, the company again obtained an injunction to suspend its bankruptcy, this time in the Superior Court of Justice (STJ). In the decision, Minister Raul Araújo determined that the obligations of the company’s judicial recovery plan be resumed, which was approved by the general meeting of creditors and approved by the Court in 2018. “The bankruptcy of the appellant, given the global non-compliance with the recovery plan , aims to protect the market and society, as well as encourage entrepreneurship and socialize the losses caused by business risk”, said the judge in the decision.

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