Finally, a solution for the court-ordered payments?
The courts seize money from the São Paulo state government to pay creditors. A scare for the Palácio dos Bandeirantes (São Paulo state government headquarters); a relief for the creditors.
Fernando Porfírio - The São Paulo state government is alarmed by a decision from the São Paulo Court of Justice ordering the seizure of R$ 98,8 million in public funds. The seizure was authorized due to the non-payment of installments of a court-ordered debt. The fear at the Palácio dos Bandeirantes (São Paulo state government headquarters) is that the interpretation will prevail and the state will be obligated to pay off its entire debt in court-ordered debts, which exceeds R$ 20 billion. The Palácio dos Bandeirantes has assembled a task force led by the State Attorney General's Office. The first step was to appeal to the Supreme Federal Court requesting the revocation of the measure. According to the prosecutors, the decision of the São Paulo judiciary creates a dangerous precedent that could seriously compromise the state's financial management. What they don't mention is that there are thousands of citizens who have had properties expropriated and have won lawsuits against the state, but who have never received a penny of what they are entitled to. Throughout its 16 years in power, the state has used the non-payment of court-ordered debts to balance public accounts. The court's decision may now put an end to this injustice.
The court-ordered debt that resulted in the seizure of public funds stems from an indirect expropriation lawsuit filed against the State of São Paulo. The reason given was an alleged loss caused by the creation of the Serra do Mar State Park and the listing of part of a property located in the municipality of Bertioga (SP) as a protected historical site. The São Paulo government argues that Constitutional Amendment 62/2009 altered the rules previously established for the payment of court-ordered debts, through the insertion of Article 97 into the Transitional Constitutional Provisions Act (ADCT) and the establishment of a special payment regime for States, the Federal District, and Municipalities that were in default.
Therefore, according to the State Attorney General's Office, Constitutional Amendment 62/2009 allowed for two payment options: installment payments of the outstanding debt over 15 years or commitment of a fixed and determined percentage of current revenue, for an indefinite period, until the total settlement of the outstanding debt. According to information provided to the Supreme Federal Court (STF), the São Paulo state government opted for the commitment of a fixed and determined percentage of its net current revenue, that is, 1,5%, for an indefinite period, until the total settlement of the outstanding debt.
According to the government, if the São Paulo Court's decision is upheld, the State may be forced to bear the cost of seizing the entirety of its debt in court-ordered payments, which is currently astronomical: R$ 20,328 billion. "And, in addition to the seizure in question, the State of São Paulo would have to bear the cost of several others in a procedurally similar situation," argues the State Attorney General's Office in its petition to the Supreme Federal Court.