Justice requires Braskem to adhere to four measures during the extrajudicial recovery process.

Braskem announced on Friday (25) that it received notification of a ruling from the 2nd Court of Deaths and Judicial Recovery of the Central Cible Forum of São Paulo regarding the extrajudicial recovery process of petrochemicals and five subsidiaries.

The company stated that it has not received a formal subpoena regarding the decision, as it is pending official publication by the judiciary. Braskem mentioned that it is assessing the implications of the ruling and planning its next actions.

The Court’s decision enforces four relevant measures in the case.

The court ruled that every subsidiary must independently secure the approval of creditors holding a minimum of one-third of their debts covered by the out-of-court recovery process. Due to two subsidiaries failing to meet this requirement, they forfeited their temporary immunity from legal actions.

The ruling also halted additional payments related to the reorganization of the Mexican branch Braskem Idesa and designated a legal overseer to evaluate debts and agreements for the strategy.

Braskem in crisis

Braskem, a major player in the petrochemical industry in Latin America, is involved in manufacturing plastic resins and sustainable chemicals. The company is currently undergoing a debt restructuring totaling around $11 billion.

The company is attempting to negotiate an out-of-court settlement with creditors, which involves controlling shareholders Petrobras and IG4 Capital contributing $3 billion to prevent a judicial recovery petition.

Also, be sure to read.

• Petrobras opts against raising stake in Braskem during debt talks

Petrobras President Magda Chambriard stated that the government has no plans to raise its stake in Braskem unless other shareholders also increase their holdings.

Different businesses

Extrajudicial recovery will remain in procedural consolidation rather than substantial consolidation, allowing the six companies to be treated individually throughout the process. Each company will maintain its own assets, creditors, and calculations for plan approval.

The choice prevents the company’s debts and assets from being seen as those of one single company.

In cases of extrajudicial recovery, each company must satisfy legal requirements independently and achieve the necessary creditor quorum, according to the court.

The figures shown during the procedure were 39.6% for Braskem, 20.4% for Braskem Netherlands, 42.4% for Braskem Trading & Shipping, 50.6% for Braskem Netherlands Finance, and 13.2% for Braskem America Finance Company.

Two affiliate companies no longer have safeguard.

The choice also ended the collection suspension period for two companies: Braskem Netherlands B.V. and Braskem America Finance Company.

According to Justice, the pair did not meet the necessary one-third creditor membership threshold to stay protected.

Companies must demonstrate the validity of their membership within a 15-day period or specify the necessary actions they intend to take.

Justice halts the release of new funds.

The decision also concerns Operation BAKIDE (from Braskem Idesa), which is connected to a restructuring carried out in the United States under the Chapter 11 process, a legal mechanism similar to bankruptcy protection.

The financial obligations related to the operation amount to around $800 million, which includes $415 million in DIP funding, $71 million in cash support upon completion of the process, and a future commitment linked to a potential sale of a stake in Braskem Idesa.

The court decided to stop the implementation of BAKIDE due to the large number of commitments and insufficient information on the economic benefits to Brazilian companies.

The ruling prevents any new payments, transfers of assets, release of DIP funding installments, cash withdrawals, or increased guarantees until a future court decision is made. Additionally, any new commitments regarding purchasing or selling options at Braskem Idesa are put on hold.

Justice ordered Braskem to submit a comprehensive report on the operation within 15 days, including details such as contracts, actions, economic evaluations, and funding sources, as well as the effects of BAKIDE on extrajudicial recovery in Brazil.

Petrobras and Shine I Investment Fund in Multistrategy Participations were also asked to provide clarifications on corporate and contractual approvals for the operation simultaneously.

Justice designates a judicial administrator.

The fourth step involves appointing ACFB Judicial Administration Ltda. as the judicial administrator of the proceedings, with lawyer Antonia Viviana Santos de Oliveira Cavalcante as the designated technical officer.

The appointment is an unusual step in out-of-court debt recovery procedures, as indicated by the ruling. It was deemed necessary due to the complicated nature of the case, which includes six companies, five of which are foreign, varied funding arrangements, and a disagreement over the method of calculating the approval quorums.

The total passive disclosed during the process amounts to R$ 187.07 billion, with financial credits potentially recoverable making up R$ 56.48 billion and debts between the group’s companies amounting to R$ 130.60 billion.

The administrator’s responsibilities include verifying financial credits, auditing individual membership fees for the six-company plan, and assessing transactions and assets among companies.

Judge Tainá Maria Leonardo de Oliveira from the 2nd Court of Deaths and Judicial Recovery at the Cible Central Forum of São Paulo signed the decision on 24 September 2026. Braskem stated that they had not received a formal subpoena yet, and the decision was pending official publication.