Livraria Cultura is again declared bankrupt by the Court

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The company had filed an appeal asking for the suspension of its bankruptcy, determined in February by judge Ralpho Waldo De Barros Monteiro Filho, who cited the ‘non-compliance with the judicial recovery plan’. Livraria Cultura in downtown Rio, which closed its doors Carlos Brito/G1 Livraria Cultura was again declared bankrupt by the Justice of São Paulo, after the company had an appeal denied to maintain its request for judicial recovery. The company had obtained an injunction to have its process suspended on February 16. On the 9th of that month, the company was declared bankrupt, when judge Ralpho Waldo De Barros Monteiro Filho cited the “non-compliance with the judicial recovery plan”. The decision was then suspended by Judge JB Franco de Godoi, from the 1st Reserved Chamber of Business Law of the São Paulo Court of Justice, who accepted Livraria Cultura’s request for the company’s appeal to be analyzed. “The effects of converting the Judicial Reorganization into Bankruptcy are irreversible, requiring a more accurate reexamination of the body of evidence supporting the r. Sentence”, wrote the magistrate at the time. Now, Franco de Godoi says in his decision that, analyzing the scenario, there is no doubt that the group’s economic unfeasibility is “patent, which requires the maintenance of the sentence and revocation of the appeal injunction”. Several open debts of the company and lack of proper records of the recovery process are mentioned. “The bankruptcy of the appellant, given the global default of the recovery plan, aims to protect the market and society, as well as to encourage entrepreneurship and socialize the losses caused by business risk”, says the decision. REMEMBER: Livraria Cultura files for bankruptcy UNDERSTAND: Livraria Cultura has been declared bankrupt; what happens to company employees and assets in these processes? Bankruptcy Livraria Cultura, one of the most traditional networks in the country, had been facing a severe crisis since mid-2015, after the shrinkage of the publishing market. The company currently has only two physical stores, in São Paulo and Porto Alegre, and maintains its operations through digital channels. The court-supervised reorganization process had been going on for more than four years, when the 2nd Bankruptcy and Judicial Reorganization Court of the Central Civil Court decided to accept the company’s request. In 2020, Justice had already rejected a request for a change in the company’s recovery plan, and pointed out that bankruptcy could be enacted. In early February, the Justice of São Paulo decreed the company’s bankruptcy. At the time of entering into judicial recovery, the bookstore already claimed to be in an economic and financial crisis and had reported debts of BRL 285.4 million — most of it with suppliers and banks. According to magistrate Ralpho Waldo De Barros Monteiro Filho, the new recovery plan, signed in 2021, was also not fulfilled by the company. “The behavior of the Debtors in these records has shown quite the opposite: in fact, at various times, it borders on disregard for the recovery procedure and for the Judgment, which gave several opportunities for their manifestations, but without the arrival of materially useful content proof of compliance with the plan”, says an excerpt from the decision. Monteiro Filho listed a series of pending issues, such as the lack of discharge of labor debts that should have been fully settled by June 2021 and the failure to send documents. He also highlighted the expiration of the creditor payment period. According to the judge, the company’s default exceeds R$ 1.6 million, “there being no perspective as to the possibility of default”. The decision was suspended a week later by Judge JB Franco de Godoi, from the 1st Reserved Chamber of Business Law of the Court of Justice of São Paulo. Since then, the Justice has analyzed the situation of Livraria Cultura, to verify if it would be possible to comply with the proposed recovery plan.

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