Club files request at São Paulo Bankruptcy Court to restructure finances and avoid collapse
The Portuguese Sports Association, , is facing financial problems and has filed a request for judicial recovery. The request was made official at the Bankruptcy and Judicial Recovery Court of the District of São Paulo on Thursday (Dec 12, 2024). The club accumulates debts totaling R$517 million and is seeking, through this legal mechanism, an opportunity to restructure its finances.
Portuguesa’s financial problem is the result of an accumulation of different categories of debts over the years. Around R$140 million is attributed to labor issues, mainly related to debts owed to athletes and former athletes. The club’s financial situation worsened after relegation from the Brazilian Championship in 2013, followed by 4 relegations in 4 years, culminating in the team’s participation in Série D.
Lawyers Eduardo Munhoz, Ana Gonçalves and Gabriela Santos, representatives of Portuguesa, said that the pandemic worsened the club’s financial crisis. Revenue from the use of the team’s stadium, Canindé, was significantly affected.
“This put a damper on the uplift attempts. The club’s debts became defaulted and Lusa began to face a succession of seizures and restrictions on its assets. In view of this, solving liabilities and rebalancing the club’s cash flow became practically impossible”says the petition.
Judicial recovery is seen as an essential strategy for Portuguesa to overcome the financial crisis and ensure the continuity of its activities.
If the request is accepted, the seizures and foreclosures against the club will be suspended, and a judicial administrator will be appointed. Portuguesa will have 60 days to present a judicial recovery plan after the publication of the decision.
