The Court accepted Bradesco’s request () to suspend the effects of Oi’s bankruptcy declaration and ordered the continuation of the company’s judicial recovery process, with the orderly liquidation of the Oi Group’s assets. The decision was made by judge Mônica Maria Costa, from the First Chamber of Private Law of the Court of Justice of Rio de Janeiro (TJ-RJ).
The TJ-RJ ordered the return of the previous judicial administrators and the investigation of the responsibilities of the company Pimco, which assumed controlling interest in the group. According to the judge, Oi’s bankruptcy would cause serious damage to creditors and the public interest, given the relevance of the services provided by the company, such as telecommunications and support for essential services.
The company’s bankruptcy, by judge Simone Gastesi Chevrand, from the 7th Business Court of Rio de Janeiro. In her decision, she stated that “there are no more surprises regarding the status of the group in judicial recovery. Oi is technically bankrupt.”
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According to judge Mônica Maria Costa, the Union lacks a realistic position regarding the operation of Oi’s loss-making services, and declaring bankruptcy requires caution, as the company has “a concrete probability of receiving relevant assets from the arbitration, which would be capable of guaranteeing its medium and long-term obligations”.
She adds that “the recognition by the Union that it needs to invest resources to rebalance contracts and maintain the provision of essential public services would also reverse the current trend of economic collapse of the company”.
Furthermore, it points out that continued recovery is the most efficient and least expensive means of both satisfying creditors and maintaining business activities that are of notable importance in the private and public spheres.
The decision also adds that the Group faces significant difficulties arising from high debt and restricted cash flow, “the recent procedural movements demonstrate the existence of sufficient assets to ensure the continuity of business operations and execution of the judicial recovery plan, highlighting that, given the presence of concrete alternatives, any measure aimed at declaring the bankruptcy of the Oi Group would be hasty”.
The TJ-RJ also states that the Public Ministry considers it essential to summon Anatel again to present alternative solutions for maintaining essential public services, including through the contribution of public resources. According to the judge, this measure is independent of the aforementioned arbitration procedure and occurs “without the expectation that deficient services will continue to be provided without due funding from the Federal Union, as has been the case to date”.
The court adds that, if there is no initiative from the Union to mobilize its own resources and, given the lack of interest of other companies in taking on these loss-making services, “there does not seem to be any other alternative other than the takeover of these services through direct provision by the Union itself or even the stoppage of the provision of these fixed-line telephone services, since they are loss-making and the Union does not seem interested in the economic rebalancing of these contracts”.
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The judge ordered that Pimco’s shareholding and management responsibility be investigated and that, “under the terms requested by the Public Prosecutor’s Office”, Anatel and the Union be summoned as a matter of urgency.
(with Estadão Conteúdo)
