The number of companies that filed for judicial recovery broke the current record in the third trimester (July/August/September). According to a survey carried out by Serasa Experian, in this period, 134 companies filed for judicial recovery, a number that represents 40% of all processes initiated in 2023.
Between January and September, 966 companies filed for judicial recovery throughout Brazil. The number is larger than that registered in 2022, when 833 requests were made. According to the survey, the majority, 611, are small and medium sized businesses.
According to experts, the growth in the number of requests is linked to the increase in defaults by companies and consumers, who were unable to pay their bills.
What is judicial recovery?
This is a judicial tool used by companies that are unable to pay their debts and, to avoid bankruptcy, request a judge to order their judicial recovery.
When the request is accepted, a judicial administrator is appointed to supervise the company during the process. By law, judicial recovery must only last two years, but, in practice, it can take longer, depending on the judge’s decision.
During this time, the company tries to review its processes, cut costs or even find a partner or buyer to overcome its financial difficulties. When it is able to recover, the process comes to an end and the company goes back to operating normally. If after this period the recovery is not confirmed, bankruptcy is declared, that is, the company ceases to operate.
