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Understand the situation based on the figures presented by Serasa Experian, indicating an increase in judicial recoveries and bankruptcies.
The financial sector received information today about a notable increase in the number of companies opting for judicial recovery. This is because the Bankruptcy and Judicial Recovery Indicator, generated by Serasa Experian, pointed to a significant 82.1% increase in applications in July.
These figures originate from comparing them with the same month last year. This legal strategy, designed to overcome financial challenges and prevent bankruptcies, has become essential for Brazilian business owners. In this text, we will explore the reasons.
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Which companies are leading the applications for judicial recovery?
Within this context, Law 11.101/2005 and its 2020 revision (Law 14.112/20), which guide this recovery process, propose a facilitated method for these companies, aiming to reduce the burden of debts and provide a more effective recovery. In times of economic adversity, such adaptable guidelines may be the key to the survival of many of them.
Bankruptcy filings are also on the rise nationwide
The situation is not limited to restructuring alone. In July of this year, the number of bankruptcy filings rose 37.3% compared to the same period of the previous year. Micro and small businesses are once again leading the way with 55 filings. However, the outlook is also alarming for medium-sized companies (33 filings) and large corporations (26 filings).
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Therefore, the vital distinction between going bankrupt and seeking judicial reorganization lies in the fact that the latter seeks to prevent the former. In other words, judicial reorganization is the effort to economically revitalize the company, while bankruptcy is the outcome, when revival is no longer achievable.
