The Brazilian Superior Court of Justice (STJ) upheld the validity of a property auction conducted in the context of bankruptcy proceedings, in which the asset was acquired for only 2% of its appraised value.
In the case at hand, the property – appraised at R$ 5.5 million – was acquired for R$ 110,000 in the third round of bidding, following extensive publicity and the absence of interested buyers in the first two calls. No evidence of procedural irregularity was identified. The party seeking to annul the auction argued that the asset was sold at a negligible price, thereby undermining the interests of the bankruptcy estate. However, this party did not present any effective offer to purchase the asset at a higher value.
In its decision, the STJ highlighted the following points:
1. The amendments introduced by Law No. 14.112/2020 aim to increase the efficiency of bankruptcy proceedings, with an emphasis on the prompt liquidation of unviable companies;
2. Article 142, §2º, V, e §3º-A, III, of the aforementioned law abolished the prior concept of “grossly inadequate price” as an automatic impediment to the sale of assets of the bankruptcy estate, authorizing the alienation in the third round of bidding at any price;
3. Article 143, §1 of Law No. 14.112/2020 provides that objections on the basis of sale value will only be admitted if accompanied by a binding purchase offer, made either by the challenger or by an interested third party – which did not occur in this case.
By upholding the sale of the bankruptcy estate’s property for just 2% of its appraised value, the STJ reinforces an important positive precedent for creditors, underscoring the judiciary’s commitment to the speed and efficiency of insolvency proceedings, consistent with the spirit of Law No. 14,112/2020. The validation of the auction, even at a substantially reduced price after unsuccessful attempts to obtain higher bids, facilitates the prompt liquidation of assets, thus expediting creditor satisfaction.
By discarding the obsolete notion of “grossly inadequate price” as an automatic barrier and requiring a concrete, superior offer as a prerequisite for objections, the STJ’s decision mitigates legal uncertainty and curtails unwarranted procedural delays, thereby ensuring the swift distribution of the proceeds and the maximization, although partial, of creditor recoveries.
