BANKRUPTCY COSTS IN BRAZIL IN COMPARISON TO NORTH AMERICAN STUDIES

Abstract

The research aimed to identify, measure and classify the costs of bankruptcy procedures subject to Brazilian bankruptcy law, in order to compare them to the costs found in similar North American studies. The research was conducted throughout 2013, when we referred to several cases in the districts of São Paulo-SP, Belo Horizonte-MG and Contagem-MG, to data collection, followed by analysis of this data in accordance to the theoretical framework used. It was found that, on average: the payments incurred in liquidation were 35% of the final asset of the bankrupt; the bankrupt’s assets of bankrupt lost 47% of its value; the total recovery rate of creditors was 12% and the legal process lasted nine years. As for processes, direct costs were 26% of the initial asset of the firm, the recovery rate of creditors was 25% and they lasted four years, on average. The results indicate that the sample processes had a longer duration, paid less creditor’s values in the judicial recovery and the reimbursement rate in liquidation was a little higher than the results found on North American studies.

Bankruptcy; reorganization; costs of bankruptcy