Colombo's Brazilian extrajudicial restructuring unpicked

Author: Edward Price | Published: 18 Jul 2016

Brazil’s largest-ever extra-judicial restructuring has featured active - and successful - domestic bank involvement and could signal the way forward for the country’s distressed corporate sector.

Colombo, a Brazilian clothes retailer, has restructured debt worth R$1.6 billion, ($480 million). The deal signals a creative approach to restructurings in the troubled economy. 

Evy Marques, Felsberg

Brazilian counsel from Felsberg & Associados, which acted for Colombo, believe the consensual restructuring could signal hope amid the country’s turbulent economics.

“This is a good sign for Brazil. Some companies have a future but they just need to be given a chance,” said Evy Marques, partner at Felsberg & Associados.

Expedited restructuring

Counsel believe that the former practice of simply extending the terms of debt isn’t enough in Brazil's current climate. “We can’t just file for Chapter 11 in Brazil now, but we have to think about different strategies for restructuring,” said...