The outcome of several judicial reorganisations in Brazil since the enactment of Law 11,101/2005,known as the Brazilian Bankruptcy Law, where equity holders received better treatment than would be expected in a similar proceeding if it was conducted in another jurisdiction (typically, in the United States) raised a question about the power of shareholders in Brazilian insolvency proceedings.
In fact, some market players reached the point of thinking that the Brazilian Bankruptcy Law provided for the ability of shareholders to approve the judicial reorganisation plan and asked, among other similar questions, whether the management of insolvent companies did not have fiduciary duties towards creditors. All of this arises from judicial…