Recently, an injunction by the Santa Catarina Court of Justice blocked the assets in Brazil of a Scottish businessman who is facing transnational insolvency proceedings as an individual.
The decision is unprecedented in the country and was based on the Judicial Recovery and Bankruptcy Law – No. 14.112/2020.
The injunction ordered the blocking of three assets of the businessman who was declared insolvent by the Scottish courts in 2023.
Transnational insolvency occurs when there is a judicial reorganization or bankruptcy process in a company with assets, establishment, activity, or creditors in more than one country.
In the case cited, the foreigner has debts of more than ninety-five million pounds, distributed among 33 creditors in four different countries.
He also owns real estate in Brazil, worth an estimated twenty million reais, and was interested in selling it.
Faced with the possibility of dilapidating the assets and frustrating creditors, the assets were blocked as a way of recognizing the transnational insolvency process.
The transnational insolvency procedure differs from the recognition of a foreign judgment. This is because the foreign judgment must be submitted for ratification by the Superior Court of Justice.
In this case, based on Law 14.112/2020, recognition can be submitted directly to the judge of first instance, without the need to submit to the Superior Court of Justice, bringing more agility to the process and legal certainty to creditors.