Bankruptcy laws

Laws are constantly evolving as new ways to look at them occur as they are challenged by various new lawsuits. Currently, the Brazilian bankruptcy law is about to have a magnifying glass shown on it because of a dispute between U.S.-based Oppenheimer Funds and JBS, the world’s biggest meat exporter.

The problem arises with Doux Frangosul, a French-controlled poultry company in Sao Paulo. According to the lawsuit, the lease allows JBS to operate the facility plants and is thus responsible for the $60 million debt which was just defaulted on.

Bigger issues come to light as the Financial Times is reporting that the lease was agreed upon without the permission of creditors and therefore violates Oppenheimer’s rights. A spokesmen for JBS declined to comment, but previous statements indicate they deny all wrongdoing.

“The lease agreement is a fraud,” a lawyer for Oppenheimer told the news source. “The actual agreement in place was the incorporation of Frangosul by JBS. JBS disguised the incorporation by naming the agreement a ‘lease’ in an attempt to avoid taking over Frangosul’s liabilities.”

This is another example of “de facto operators” in Brazil, where companies run assets that are in default without payment to creditors, which brings the country’s bankruptcy laws into question. The article mentions that this case highlights the loopholes that exist in the current law.

It will also be another ruling that will bring international attention to the problem. Brazilian oil, mining and infrastructure tycoon Eike Batista, is expected to restructure $4 billion in bondholder debt in the coming months.

Healthcare Investment Debate

The debate in Brazil regarding the allowance of foreign investments in the country’s healthcare services system has waged for some time in the political realm. Now it is taking up root on the floor of the Senate as a bill to increase the participation of outside funds is being debated. This is happening during a public hearing of the Economic Affairs Committee.

The current proposal is that hospitals and clinics maintain at least 51 percent of Brazilian equity and there are restrictions on foreign investment for certain services. The law as it is written now prohibits the entry of foreign investment into hospitals and clinics, but that same rule does not apply to health plans, pharmaceutical companies, pharmacies and diagnostic companies.

Health Minister Alexandre Padilha is on the side of the initiative.

“I am in favor if clear rules on investment are established and in terms of which manner it can be applied to expand private services,” Padilha said. “There is deficit of specialized beds, for urgent care and emergency services, diagnostics and for ICUs.”

There is outspoken opposition on the other side of the aisle. Ophthalmologist Lottenberg Claudio, the president of the Hospital Albert Einstein, questioned whether this move would benefit the 75 percent of the population that relies on a public healthcare system or just be a way to enrich the controlling groups of hospitals.

Maria do Socorro Souza, the President of the National Health Council, echoed Claudio’s argument and added that the priority should be to strengthen the SUS.

International weapons treaty

ast week, more than 60 countries, including Brazil, Japan and the U.K., came together to sign a major treaty regulating the global arms trade. The U.S. has announced it will sign soon. This is the first international movement to slow the illicit trade in weapons in the black market that are used to fuel conflicts and terrorist attacks.

The goal of this process is to create a protocol that is legally binding to regulate the legal trade of conventional weapons. It will also provide effective tools to prevent these shipments from being diverted to the illegal market.

According to ambassador Antonio Jose Vallim Guerreiro, a member of the Brazilian Conference on Disarmament, the negotiation process of this legislation took seven years to complete and Brazil has been on board this process from the early stages.

He added that for Brazil, this treaty represents a milestone in the pursuit of a more peaceful and secure world. It also protects citizens in situations of conflict and will reduce urban armed violence.

“Each one was crucial in the realization of this aspiration,” he said. “Brazil is fully committed to ensuring that the balanced, objective and non-discriminatory approaches prevail, as well as international cooperation and assistance to ensure a central role in all efforts.”

Any company that does international business, like with Brazil, would be wise to partner with Brazilian lawyers to investigate how this treaty could impact shipping processes. Being away of the changes before they take effect can keep a business ahead of the competition.

Factors on selecting an Arbitrator

Anyone who has ever seen court proceedings is aware of the key players in trial settings. Prosecutor, defense attorney, judge, and bailiff are nearly always present, but there are other ways that disputes between parties can be settled that require a different group of legal professionals. One of them is the arbitrator.

One who acts as a “judge” at an arbitration hearing—another form of legal dispute resolution that is similar to a trial—an arbitrator is chosen earlier on in the legal process. It is not uncommon for parties and lawyers to gather and discuss the possible candidates. There are several different factors that must be considered when selecting the right arbitrator.

Part of the Arbitration Act covers the arbitrator selection process, as it mandates impartiality, however, there are many more factors to be considered aside from independence. These include things like competence, diligence and discretion.

The arbitrator selection process will be affected by the nature of the case. An arbitrator for a case involving the building of an airport may not be considered the best option for dispute resolution in a niche industry like coffee beans. There are also cases that require specific procedural knowledge that will make more experienced arbitrators more attractive. If that case is international, a candidate who speaks the respective language with enough authority to discuss legal matters should be the first choice.

With all these factors considered, the parties’ lawyers can come together and select the candidates they want. To ensure a fair proceedings for both parties, selecting the right arbitrator is key.

Temporary Visas

Earlier this month, this blog discussed the new bill that will allow individuals vacationing in Brazil to obtain visas permitting them to work for periods of time when they are in the country. This is a great opportunity for businesses looking to expand in Brazil that send employees to scope out the area. But what about those who decide to stay in the country?

The Brazilian government is making strides to ease the process of finding work in the country. Those who acquire visas and put them to good use may find it easier to find long-term work in the country going forward. So, if a company sends a number of employees to map out the area and they work temporarily while networking and establishing potential partnerships and investor relationships, it could be easier to set up operation once the visa runs out.

So far, many have taken advantage of this opportunity. According to the Ministry of Labor, 15,000 permits were granted to foreigners in the first quarter of 2013. Of those, approximately 14,300 were temporary and 700 were permanent. These numbers are roughly on point with last year’s findings.

There is hope that as lawmakers continue their efforts, it will become easier for individuals to obtain permanent working abilities in Brazil. Either way, businesses need to know what their options and their rights are when they send employees to the country. Working with Brazilian lawyers will let these individuals learn the country’s laws and use that understanding to assist with their expansion efforts.