M&A deals involving Brazilian distressed companies
By Vitor dos Santos Henriques & Thiago Jun Machado, Santos Neto Advogados
Certain sectors of the Brazilian economy are facing deep losses due to inefficient management or lack of alternative financing. In some cases, such as sugaralcohol and industrial equipment supply areas, the companies are demanding judicial recovery, a procedure set forth in Brazilian Bankruptcy Law that is similar to the Chapter 11 in the US.
While such a scenario implies some turbulence, it also represents a great investment opportunity for foreign clients, as Brazilian Bankruptcy Law provides a very secure environment for the acquisition of assets or shares from distressed companies under judicial recovery and for the renegotiation of its debts.
In this sense, when negotiating M&A transactions involving distressed Brazilian companies, it is essential for the parties to carefully consider all legal issues that impact on the definition of the purchase price. Amongst such issues, we highlight the importance of proceeding a careful due diligence in order to analyse contingencies and measure succession risks related to every company.
Vitor Dos Santos Henriques
Santos Neto Advogados, São Paulo, Brazil
T: +55 11 3124 30 70
Thiago Jun Machado
T: +55 11 3124 30 70
Santos Neto Advogados (founded in 1992) with head offices in São Paulo, Brazil and branch offices in New York City, USA. SNA offer a new concept of lawyering called “lean full service”, where each lawyer offers specialty services in two or three areas of law. The aim is to streamline legal teams, ensuring they are lean and efficient.
Vitor Henriques (author) is a lawyer with experience in Mergers & Acquisitions, Corporate Law and Capital Markets, having worked at large law firms and participated in several operations in various sectors of the economy.
Thiago Jun Machado (co-author) Thiago worked as a corporate lawyer in the legal department of Brazilian
corporations from the building and port sectors with focus on Corporate Law and M&A.
published: September 2015