A creditor of more than one company with a single recovery plan is entitled to only one vote.

Because it is a single plan, the ministers of the Third Panel of the Superior Court of Justice (STJ) overturned a ruling by the Court of Justice of Mato Grosso (TJMT) that had allowed, in the voting on the judicial reorganization plan of Usinas Pantanal and Jaciara, the double counting of votes from holders of credits against the two companies.

According to the panel, creditors in this situation vote as holders of a claim against the economic group, and not as individual creditors of separate amounts. With this understanding, the ministers granted the appeal of a creditor to declare the recovery plan for the sugar mills, which had been judicially approved in 2014, as not approved.

At that time, the creditor questioned the voting method by filing an objection, which was rejected at first instance on the grounds that, regardless of how the plan was presented, the companies' obligations are independent, and the holder of claims against both would be entitled to two votes. The decision was upheld by the TJMT (Court of Justice of Mato Grosso).

Substantial consolidation

According to the rapporteur at the Superior Court of Justice (STJ), Minister Villas Bôas Cueva, the formation of active joint litigation in judicial reorganization results in what doctrine calls procedural consolidation, which represents only the processing in the same case file, for reasons of economy, of autonomous reorganizations, with the presentation of individualized plans.

"In situations where, in addition to the formation of a joint lawsuit, the presentation of a single plan is permitted, what is known as substantial consolidation occurs. This is a case where the various legal entities are not treated as autonomous centers of interest. Given the confusion between the legal entities, the restructuring of one of the group members depends on and interferes with that of the others," stated the minister, emphasizing that, in this case, a single plan is presented, with equal treatment among the creditors of each class.

According to Villas Bôas Cueva, given that the presentation of a single plan for the recovery of the power plants was approved, with a single assembly to be held, "it is possible to see that the hypothesis is one of substantial consolidation, and the voting on the plan should follow this logic."

Voting by head

The rapporteur highlighted that paragraph 1 of article 45 of Law 11.101/2005 stipulates that, for the recovery plan to be considered approved by the class of creditors with real guarantees, two requirements must be cumulatively present: a favorable vote from creditors holding more than half of the total value of the credits represented at the meeting and a favorable vote from a simple majority of those present (voting by head count).

The TJMT – the minister explained – upheld the first-instance decision, understanding that the "one vote per capita" criterion was being respected, since the judicial reorganization plan encompassed two companies, and creditors holding claims against each of them would have the right to have their vote counted twice.

"This conclusion, unless I am mistaken, does not correspond to the hypothesis in which a single recovery plan is presented. Indeed, if the judicial recovery plan is unique, everything happens as if there were only one company in recovery: the credits for the formation of the creditor classes must be added together, and the percentage of votes for the approval of the plan must consider this value (creditors representing more than half of the total value of the credits present at the assembly)," he emphasized.

According to the rapporteur, the vote count by head count should consider the creditors present at the meeting (simple majority) regardless of which company is the debtor of their credit. "It violates the entire logic of presenting a single plan for the lower courts to conclude that the votes of creditors from both companies should be counted double," he concluded.

Plan not fulfilled.

Villas Bôas Cueva verified that, as reported by the TJMT (Court of Justice of Mato Grosso), nine creditors with secured claims attended the general meeting, and five voted against the plan. "In this context, the second criterion for the plan's approval was not met, making it necessary to conclude that the judicial reorganization plan was not approved," he noted.

According to the minister, the recovery of the plants was initially requested in 2008 before the court in Anápolis. However, after 12 years, "the companies have not recovered, have failed to comply with the irregularly approved plan, and various reports of evidence of fraud have accumulated in the case files, which are being investigated." He believes that everything indicates that bankruptcy should be declared, but this decision rests with the first-instance court.

Source: STJ