Requests for judicial reorganization increase by 86% in Minas Gerais.

Mines 247 - The number of companies filing for judicial reorganization in Minas Gerais increased by 86% last year compared to the previous year. There were 147 requests in the state in 2016, compared to 79 in 2015. This percentage is proportionally higher than the overall data for Brazil, where cases jumped from 1.287 to 1.863 during the same period, an increase of 44,7%. According to data compiled by Serasa Experian, the number of bankruptcy filings in the state also increased, rising from 71 to 172 in one year.

Among micro and small businesses alone, which are those with the greatest difficulty accessing credit, the variation in the number of recovery requests was 64,8% in Brazil, rising from 688 in 2015 to 1.134 in 2016.

In Minas Gerais, after mining and construction companies were affected by the commodities crisis and the drop in investment in real estate and infrastructure, respectively, the service sector has also become part of the statistics for judicial reorganization and bankruptcies, according to experts.

“Given the severity of the crisis, there is a trend of transforming judicial reorganization into bankruptcy. Some creditors, seeing the inability of companies to recover, have been requesting the most drastic solution,” analyzes Guilherme Carvalho de Andrade, professor of Business Law at Ibmec. The report was published in the newspaper Hoje em Dia.

According to economist Sérgio Guerra, from the Economics Department of Fiemg, the numbers are a "standard occurrence" within the adverse scenario and cumulative difficulties experienced by companies in the recent period. The scholar sees the possibility of stabilization of the scenario by the end of the year. "It is natural that they remain high in 2017, but some measures taken by the federal government, such as the renegotiation of tax debts and the granting of new credit lines by BNDES, provide some relief for the management of companies," he says.