SAO PAULO, Dec 15 (Reuters) - The Brazilian government is considering easing legislation overseeing the acquisition of companies in distress or under bankruptcy protection by making buyers less liable for the burden of past obligations, O Estado de S. Paulo newspaper reported on Thursday.
According to Estado, which did not say how it obtained the information, Finance Minister Henrique Meirelles plans to propose the amendments to the country’s bankruptcy law in a policymaking meeting later in the day.
As part of those changes, liabilities stemming from labor lawsuits against bankrupt companies would not be fully transferred to the buyer, Estado said. Meirelles said on Wednesday that some measures were under consideration to facilitate the repayment of corporate tax debts for companies in distress.
Debt restructurings and bankruptcy filings in Brazil have risen to a record this year as the worst recession in more than eight decades and amid a corruption probe that has cast a shadow over dozens of companies led to a surge in defaults.
Bankers and lawyers have long called for an overhaul of Brazil’s 2005 bankruptcy law, saying it prevents restructuring from taking place faster. Debts to the tax authorities and to workers take priority over other obligations, while court rulings can be easily appealed, meaning a bankruptcy can drag on for years.
Meirelles presented the proposals on Wednesday to senators from the PSDB party, Estado said.
The finance ministry’s media office did not have an immediate comment. (Writing by Bruno Federowski and Guillermo Parra-Bernal)