Livraria Saraiva: São Paulo court declares bankruptcy – 10/06/2023 – Market

The 2nd Bankruptcy and Judicial Reorganization Court of the Capital declared this Friday (6) the bankruptcy of the Saraiva bookstore chain.

The request was made by the company itself this Wednesday (4), within the judicial recovery process, filed in 2018 due to debts of R$674 million.

In the decision, judge Paulo Furtado de Oliveira Filho recognized the failure to comply 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 judicial administrator was also retained. The decision may be appealed.

The company filed for bankruptcy after dismissing the rest of its employees and closing its last five physical stores at the end of September.

Less than ten years ago, Saraiva had more than one hundred physical stores in all 26 Brazilian states and the Federal District, in addition to its ecommerce service.

Self-bankruptcy occurs when, at the request of the company itself, bankruptcy is declared. In the application, the company explains the reasons for the crisis that made it impossible to continue business activity.

Once self-bankruptcy is requested in judicial recovery, it is up to the judge in the case to decide on the so-called convolution —moving from one civil status to another— of the bankruptcy process.

In the document, the company argued that the request for self-bankruptcy is made in the files of its judicial recovery “due to good faith, which has always guided Saraiva’s conduct, and, also, the publicity and efficiency of doing so in the files in which its creditors are already gathered, through the conversion of its judicial recovery into bankruptcy”.

In the request, the company said that the business company that is no longer able to pay its bills, pay its employees or pay its suppliers and that has no horizon for overcoming the economic and financial crisis — must be removed from the market.

“It is certainly not the outcome that was intended for this judicial recovery, much less for the business companies involved, which, founded more than a century ago, are a reference in the publishing market. But it is what needs to be done”, he argues.

The company’s latest financial statement showed a drop of 60.2% compared to the same period last year in net revenue from physical stores in the second quarter of this year, reaching R$7.2 million.

On the bookstore’s website, net sales closed at R$100,000, a drop of 78.6% compared to the second quarter of 2022. When it presented its request for recovery, the company stated it had a debt of around R$675 million .

In the first quarter of this year, the network’s net debt rose to R$22.4 million, compared to R$156 million in the same period last year, according to information from the company. The reduction occurred due to debt amortization with Banco do Brasil.