Dec 15 The Brazilian government is
considering easing legislation overseeing the acquisition of
companies in distress or under bankruptcy protection by making
buyers less liable for the burden of past obligations, O Estado
de S. Paulo newspaper reported on Thursday.
According to Estado, which did not say how it obtained the
information, Finance Minister Henrique Meirelles plans to
propose the amendments to the country’s bankruptcy law in a
policymaking meeting later in the day.
As part of those changes, liabilities stemming from labor
lawsuits against bankrupt companies would not be fully
transferred to the buyer, Estado said. Meirelles said on
Wednesday that some measures were under consideration to
facilitate the repayment of corporate tax debts for companies in
distress.
Debt restructurings and bankruptcy filings in Brazil have
risen to a record this year as the worst recession in more than
eight decades and amid a corruption probe that has cast a shadow
over dozens of companies led to a surge in defaults.
Bankers and lawyers have long called for an overhaul of
Brazil’s 2005 bankruptcy law, saying it prevents restructuring
from taking place faster. Debts to the tax authorities and to
workers take priority over other obligations, while court
rulings can be easily appealed, meaning a bankruptcy can drag on
for years.
Meirelles presented the proposals on Wednesday to senators
from the PSDB party, Estado said.
The finance ministry’s media office did not have an
immediate comment.
(Writing by Bruno Federowski and Guillermo Parra-Bernal)