In favorable caselaw for Brazilian and foreign lenders and tradings, the Brazilian Superior Court of Justice (STJ) established that agricultural products (soft commodities) do not fit the concept of ‘essential capital asset’ of a company undergoing judicial reorganization, so that they may be seized during the stay judicial recovery period.
In the case, rural producers undergoing judicial reorganization had defaulted on contracts for the purchase and sale of soybeans and requested, during the process, that the essentiality of soybeans and corn produced and in production be declared, as well as authorization to continue the harvest to their marketing.
The requests were accepted in the lower court on the grounds that the grains would be an essential capital asset for the activities of the companies under reorganization, and could be sold to third parties to obtain working capital. This understanding was maintained by the Superior Court of the State of Maranhão.
In an appeal by the creditor to the STJ, the Court considered that there was no reason to support the hypothesis that the grains cultivated and sold by the debtors constitute capital goods, since they are not goods used in the production process, but rather the final product of the business activity performed by them. The justices understood that there was no legal obstacle for such agricultural products to be sold or removed from the producers’ establishments, being an important judicial precedent for the agribusiness sector.
