Information regarding the judicial reorganization process
About the Judicial Reorganization Process of the CONTAX Group
On June 7, 2022, CONTAX Participações S.A. (“Contax Par”), together with (i) LIQ Corp S.A.; (ii) Elfe Operação e Manutenção S.A.; (iii) Solvian Tecnologia e Integração EIRELI; (iv) Solviantech Desenvolvimento de Sistemas EIRELI; (v) Metalfort Manutenção Comércio e Serviços EIRELI; and (vi) CONTAX Administração Financeira Ltda. (collectively, the “CONTAX Group”), filed for judicial reorganization with the 1st Bankruptcy and Judicial Reorganization Court of the District of São Paulo, under case number 1058558-70.2022.8.26.0100 (“Judicial Reorganization”).
The purpose of the Judicial Reorganization is to further advance the CONTAX Group’s restructuring process, aiming to strengthen its ability to deliver value to clients, employees, and partners, while ensuring the continuity of operations for more than 23,000 employees across all regions of Brazil.
The decision to file for Judicial Reorganization was made in light of the challenges brought by: (i) the economic downturn over the past two years due to the COVID-19 pandemic; (ii) rising interest rates; and (iii) restricted access to credit for companies undergoing restructuring.
The CONTAX Group believes that this measure will contribute to a definitive solution for rebalancing its capital structure, enabling the resumption of its operations with the level of efficiency it has long been known for. This step represents further progress toward its goal of achieving operational excellence and reclaiming its position as one of the country’s leading companies.
Frequently Asked Questions
Judicial reorganization is a legal mechanism that allows debtors (in this case, the CONTAX Group) and their creditors to work together to reach a negotiated and consensual solution for the restructuring of outstanding debts, under the supervision of the Judiciary. It is a measure intended for companies that, although economically viable, are facing temporary liquidity issues and require judicial protection.
This mechanism takes the form of a public court-supervised proceeding, in which all creditors holding claims dated prior to the filing (June 7, 2022), whether due or not, are invited to participate in collective, transparent, and equal negotiations with the debtor.
Although successful, the CONTAX Group recognized that the out-of-court reorganization filed in 2020—focused solely on restructuring financial debt—would not be sufficient to address the new challenges brought on by the economic crisis resulting from the COVID-19 pandemic and the current macroeconomic environment.
Therefore, to enable a fair and balanced negotiation environment, the CONTAX Group determined that Judicial Reorganization was the most appropriate legal tool to continue its restructuring plan, ensuring efficient management of resources, employees, clients, and suppliers.
No. Judicial reorganization is for companies facing temporary financial difficulties but still capable of recovery through debt renegotiation, with the intent of continuing operations.
Bankruptcy, on the other hand, applies to companies that can no longer operate and require judicial liquidation of assets to pay creditors.
The initial petition includes a list of creditors with corresponding claims subject to the reorganization. Once the case is admitted, a notice will be published in the São Paulo State Court’s electronic gazette. If your name appears, your credit is subject to the reorganization.
Additionally, the court-appointed trustee will send a letter to listed creditors informing them of the process and the amount recognized. Questions can be sent to: recuperacaojudicial@contax.com.br
If your credit is missing from the list, you have 15 days after the notice is published to submit an administrative objection with supporting documents to the trustee.
After review, an updated list of creditors will be published. If you still disagree, you may file a judicial claim with legal representation.
No. The company submitted a complete list of creditors when filing. The trustee will notify those creditors and publish the list in the court’s electronic gazette. If your name is listed, no form is needed—you will receive payment according to the approved plan.
You may submit an administrative objection to the trustee, stating the correct amount and providing evidence, within the same deadline as mentioned in item 5.
If you disagree with the trustee’s decision, you can file a judicial objection with a lawyer. Questions can be sent to: recuperacaojudicial@contax.com.br
It’s a contractual document outlining the measures the CONTAX Group will adopt to overcome its financial crisis. It includes how claims will be paid and must be approved by the creditors in a general meeting.
The plan must be submitted within 60 days of the court’s approval of the case and becomes binding on all involved creditors once approved.
Payments will follow the terms approved in the plan. The plan must be voted on within 150 days of the court’s approval. Fulfillment will be overseen by the court, the trustee, and the Public Prosecutor’s Office.
No. Only claims arising before June 7, 2022, are included. Anything supplied or performed afterward will be paid under normal contractual conditions.
No. Payments for pre-filing claims must follow the plan. Any deviation could constitute a bankruptcy crime. CONTAX is legally prohibited from paying such claims outside the reorganization terms.
No. CONTAX will continue normal operations, including commercial relationships and transactions, throughout the reorganization process.
You may contact the company via email at: recuperacaojudicial@contax.com.br
Understand How the Judicial Reorganization Process Will Work
- STEP 1 – The CONTAX Group filed for judicial reorganization before the 1st Court of Bankruptcies and Judicial Reorganizations of the District of São Paulo. Once the court admits the proceeding, all payments owed by the CONTAX Group related to events prior to June 7, 2022 (the date the request was filed) will be suspended. This is because, under Brazilian Law No. 11.101/2005, all debts that predate the filing—whether due or not—are subject to the terms and conditions of payment established in the judicial reorganization plan.
- STEP 2 – Within 60 days of the court’s acceptance of the reorganization request, the Company must submit its proposed payment plan—the judicial reorganization plan—into the case records.
- STEP 3 – Once the judicial reorganization plan is submitted, creditors will have 30 days to submit any objections. If any objection is filed, the CONTAX Group must convene a general meeting of creditors within 60 days to vote on the plan.
- STEP 4 – Once approved by the creditors, the judicial reorganization plan will be submitted to the court for confirmation. Upon judicial approval, the plan becomes binding on all creditors subject to the reorganization.
- STEP 5 – Finally, following court approval, the reorganization court will monitor the fulfillment of all payment obligations that mature within a period of up to 2 years.