Government measures in key jurisdictions 3rd edition final - Flipbook - Page 17
Alessandro Amadeu da Fonseca| afonseca@mattosfilho.com.br | +55 11 3147 7826
Rodrigo Ferreira Figueiredo | rodrigof@mattosfilho.com.br | +44 207280 0161
Loans and
financial
support
Has the
government put in
place any new
bank funding
schemes?
Employment
What financial
support is
the government
providing to
businesses and to
individuals on
employment
issues?
Since the beginning of the outbreak, the government has been taking some important measures to
mitigate the effects of the current scenario. The federal government, through Brazilian governmentowned banks, has been providing funds to support mostly small and medium-sized companies with
respect to employees’ payroll and working capital during the period of crisis.
The federal government has also been encouraging the Brazilian government owned/development
banks (such as BNDES, BNB, CEF and Banco do Brasil) to postpone the payment of principal and
interest of existing loans for periods of up to six months. The financial conditions may vary from bank
to bank.
Brazilian federal agencies have also issued temporary regulation suspending certain obligations in
order to foster loans and issuances in the financial and capital markets (e.g., suspending the
obligation of filing and registering certain corporate acts with the Boards of Trade, lifting restrictions
for companies to issue the same type of security within four months from its last issuance). The
federal government has also suspended the payment of certain taxes applicable to financial
transactions for a period of 90 days.
The federal government issued Provisional Measure No. 936, which provides an allowance called
“emergency benefit” to employees who (i) had their employment agreements suspended, and/or (ii)
reduced to part-time with a corresponding salary decrease, by means of collective or individual
agreements, that must comply with certain requirements set forth therein. The aid regarding
suspensions is currently limited to 60 days, while with respect to the part-time reductions, to 90 days;
the regimes could also be combined for maximum 90 days.
Moreover, Provisional Measure No. 944 created the Emergency Employment Support Program, which
established an emergency line of credit for financing small businesses’ payrolls for two months, and Law
No. 13,982 ensured a monthly allowance of BRL 600.00, popularly known as “corona voucher”, to
microentrepreneurs, autonomous, informal workers and the unemployed for three months. All these
measures are being discussed and pending renewal by Congress and the federal government, which may
allow the extension of the initially proposed deadlines and benefits.
The Brazilian “House of Representatives” (“Câmara dos Deputados”) approved Bill No. 1,397/2020
(“Bill”), which modifies the Brazilian Bankruptcy Law, including emergency relief measures in response
Has the government to the COVID-19 pandemic. At this moment, the Bill is waiting for the Federal Senate’s approval.
made any changes
The purpose of the Bill is to provide a framework for debtors affected by the pandemic to continue
to insolvency
their activities without needing to file for judicial reorganization or pre-packaged reorganization and
legislation?
to provide further flexibility to companies that opt to file for judicial reorganization or pre-packaged
reorganization, or that are currently facing such insolvency proceedings.
Insolvency
The Bill creates a provisional regime that will remain in force from the date the Bill is signed into
legislation until December 31st, 2020. Once the Bill is in force, all ongoing enforcement proceedings
filed against the debtors arising from obligations maturing on or that matured after March 2020 will
be suspended for 30 days (“Legal Suspension”).
During this period, debtors will be protected by a prohibition on actions such as judicial rulings of
liquidation, unilateral termination of contracts, collection of late payment fines (contractual and tax),
enforcement of any type of security liens, including fiduciary guarantees, mortgages and pledges, and
enforcement of personal and corporate guarantees. The suspension will not apply to obligations
incurred or renegotiated after March 20, 2020, or for salary obligations. Also, the suspension will not
affect or suspend the exercise of early maturity and clearing rights in the context of repurchase
agreements and derivatives transactions.
Government measures in key jurisdictions
17