Nelson Soares Moreira : Companies in Economic Distress: “PER” – What It Is and What It Is For

The Special Revitalisation Process, known as PER, is designed for companies in economic distress. Its main objective is to recover the company through a period of debt negotiation with creditors.
This process can be initiated by the company itself along with a creditor, supported by a declaration issued by the accountant certifying that the company is not currently insolvent, meaning it is still recoverable.
Once the request is submitted to the court, a Provisional Judicial Administrator (PJA) is appointed. This professional plays a crucial role in the process, particularly by overseeing negotiations with creditors. From this point, all creditors must submit their claims to the PJA, who will prepare a provisional list. If there are no objections to the list, it is ratified by the judge. Subsequently, the company and its creditors have a maximum of three months to conclude negotiations aimed at drafting a recovery plan for the company.
One of the major advantages of resorting to PER is that all pending enforcement proceedings (including attachments) are immediately suspended for up to five months.
Another significant advantage (or perhaps the main one) is that the company can, within certain rules, devise a payment plan with creditors that benefits its recovery. This may involve forgiveness of (sometimes a large portion of) capital, interest, setting grace periods for payments, capital increases, among other mechanisms. All creditors are bound by the plan, even those who did not submit claims or participate in the negotiations.