Botafogo requests extrajudicial recovery – 01/09/2024 – Sport

The Rio de Janeiro Court approved on Monday (8) Botafogo’s request for extrajudicial recovery and suspended the payment of debts by the club for 90 days, which highlights difficulties in dealing with liabilities exceeding R$1 billion.

The process involves the club’s associative units, not the SAF (Sociedade Anônima do Futebol) created in 2022 to manage football — which in 2023 had the best campaign in a first round in the era of consecutive points in the Brazilian Championship, but collapsed and ended the competition in fifth place.

The extrajudicial recovery only involves civil debts, worth R$404 million, as tax and labor debts have already been refinanced, said lawyer André Chame, from the Kalache, Chame, Costa Braga office, who filed the request.

According to him, the club has already obtained acceptance from holders of 35.19% of this amount, including the largest creditor, Novonor (formerly Odebrecht), to which it owes around R$100 million for the recovery of the Nilton Santos stadium roof. .

Now, it needs to reach 50% of the debt to approve the extrajudicial recovery plan, which provides for a 90% discount on debts for receipt in cash or 40% in the case of installments in 156 installments, with a grace period of two years after approval. of the plan.

In the request, the lawyers argue that the applicants “find themselves in an aggravated situation of financial difficulties”, the result of a history of debt and aggravated by the 2016 recession and the pandemic, which impacted box office revenue.

“Although the sale of SAF Botafogo shares to Eagle Holding, with the consequent transfer of the club’s football assets to an international controlling company, may represent the promise of a future of greater prosperity, this prognosis will depend on an equalization and settlement of the historical liabilities of the club”, they say.

“Once the difficulties currently faced are overcome, Botafogo’s future is certainly promising, given the business projections of the Brazilian football scene as a whole”, they continue.

“The expected advent of an independent league of football clubs could also generate increased revenue and improvements for the Brazilian football industry, in addition to representing a milestone for the union of Brazil’s main clubs, which will generate increased revenue and a better experience for the consumer public”, they conclude.

The extrajudicial recovery process was approved by judge Alexandre de Carvalho Mesquita, from the First Business Court of Rio de Janeiro. Unlike judicial recovery, this process is preceded by negotiations with creditors.

It can only be approved after approval by holders of one third of the debt, and its continuity depends on the agreement of holders of half of the debt.

For Gabriel de Britto Silva, a lawyer specializing in business law, the decision creates risk for creditors of football clubs in the country. “Paying just 10% of what is owed and thus having a broad, general and unrestricted payment is something that is truly a blessing desired by any debtor”, he states.

“The principle of preserving the company must always be observed, but never to the detriment of discount percentages and payment deadlines that are so excessively onerous for creditors. It sets a huge precedent for other clubs that have opted or will opt for migrating its corporate structure to a limited company, S/A or SAF.”