Investors, beware! Judicial Recovery does not protect you from labor debts
Hope you're all well.
Today I'd like to address a particularly sensitive topic that, in my opinion, every single person who intends to invest in Brazil should be aware of: if your company faces a labor law legal suit, the limitation of liability won't apply to the owners.
And now, since a recent decision from the 4th Chamber of Regional Labor Court, Third Region (TRT3), the novation promoted by the approval of a judicial recovery plan apparently doesn't either.
Even though there's a precedent of the same Court (Precedent nº 55/TRT3), and a well-established Superior Court of Justice case law, that the Bankruptcy Court has sole jurisdiction regarding the matter, the 4th Chamber ruled that, if the Plan doesn't cover the owners personal properties, it's fair game to proceed with the execution against them.
For more direct details, check this link.