Justice of Paraná approves request for judicial recovery of Coritiba

The club wants to work through its R$ 114.2 million debt with the institution undergoing judicial reorganization before adopting the SAF (Sociedade Anônima do Futebol - Football Corporation) model.

The Judiciary of the State of Paraná approved Coritiba's request for judicial reorganization (RJ) on Monday afternoon. The decision was made by Judge Luciane Pereira Ramos of the 2nd Bankruptcy and Judicial Reorganization Court of Curitiba. The court granted the request after assessing that Coritiba meets the legal requirements for the application, regularly carries out its activities, is not bankrupt, and its president has no criminal record. With the decision, the club will have time to settle its debts, negotiate with creditors, and has its lawsuits and protests suspended for 180 days.

"The RJ [judicial reorganization] allows the club to adjust its cash flow, enabling it to meet its obligations. The financial situation, as it was, would certainly have led the club to default on numerous creditors" — Glenn Stenger, vice-president of Coritiba, to GE.

"The club's debts, regardless of when and by whom they were incurred, will be addressed and resolved," the director continued.

Coritiba cited a value of R$ 114.2 million to justify its request for judicial reorganization. It's worth noting that Coritiba's 2020 financial statement declares a total debt of R$ 276 million. The 2021 statement must be published by April of this year. With the judicial reorganization request approved, the club must fulfill a series of obligations in the coming days to proceed with the process.

• Notify the courts of all actions brought against the club;

• Refrain, until the judicial reorganization plan is approved, from distributing profits or dividends to partners and shareholders;

• The sale or encumbrance of assets or rights belonging to its non-current assets is prohibited - except those authorized by the court or those previously authorized in the judicial reorganization plan;

• Submit accounts by the 20th of each month, for the duration of the judicial reorganization process;

• Deliver monthly to the Judicial Administrator all documents requested by him, so that activities can be properly monitored;

• Submit the judicial reorganization plan within a non-extendable period of 60 days from the publication of the decision.

The decision also stipulates that failure to fulfill duties and obligations may result in the removal of the debtor or its administrators from conducting business activities, and that judicial reorganization may be converted into bankruptcy if the terms are not met.

The objective of judicial reorganization is clear and simple: to prevent a company from going bankrupt. The institution files a request with the court, which suspends collections for six months and appoints a Judicial Administrator. This administrator, in turn, oversees the process and communicates with creditors. Within 60 days, Coritiba must present a reorganization plan to negotiate debts and remain active. The final step is the formation of a General Assembly by creditors to vote on the proposal. The company Companhia Brasileira de Administração Judicial (CBAJ) was appointed by the magistrate as the Judicial Administrator for Coritiba's case.

Source: GE.GLOBO