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Cross-border insolvency

Recognition of foreign proceedings

Under what circumstances will the courts in your jurisdiction recognise the validity of foreign insolvency proceedings?

The Bankruptcy Law is silent in such regard. Hence, for a foreign decision to be effective in Brazil, it must undergo an enforcement procedure before the Superior Court of Justice.

Winding up foreign companies

What is the extent of the courts’ powers to order the winding up of foreign companies doing business in your jurisdiction?

In accordance with Article 3 of the Bankruptcy Law, the courts have the power to wind up foreign offices established in Brazil only in relation to conduct in Brazil. Notwithstanding that, court powers are limited to within the territory.

Centre of main interests

How is the centre of main interests determined in your jurisdiction?

According to Article 3 of the Bankruptcy Law, the centre of main interests is determined based on:

  • where administrative decisions are taken;
  • the more profitable office; and
  • where most of the assets are located.

Cross-border cooperation

What is the general approach of the courts in your jurisdiction to cooperating with foreign courts in managing cross-border insolvencies?

Brazil has no legal provisions addressing the cross-border insolvencies issue.

Article 6 of the Civil Procedure Code provides a general duty of collaboration to all parties involved in a procedure, including different courts.

Further, Article 26 of the code sets out the principles for international collaboration, including:

  • Brazil’s adherence to international treaties; and
  • diplomacy.

Congress has received a project which aims to alter the Bankruptcy Law. It contains some provisions regulating cross-border cooperation which are similar to those provided in the United Nations Commission on International Trade Law Model Law.

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