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Rival supermarket of Grupo Pão De Açúcar (GPA) declares bankruptcy after failing to comply with judicial recovery. Around 7 branches are closed and debt reaches R$37 million.
Competition between large supermarket chains is intensifying. Large corporations are standing out and gaining more and more presence in the daily lives of the population. Among the current market leaders is Pão de Açúcar Group (GPA), one of the largest food retail conglomerates in South America. In this scenario, it is relevant to highlight the recent bankruptcy of one of GPA's main competitors in the supermarket sector, a movement that reflects the dynamics and growing competitiveness of the retail market.
Rival of the Pão De Açúcar group declares bankruptcy
It is the Buy more, a rival supermarket chain to GPA. Judge Luis Otávio Pereira Marques, of the Fourth Civil Court of Várzea Grande, declared the bankruptcy of the Compre Mais supermarket chain. Furthermore, the ruling took into account signs that the supermarket had not been complying with the judicial recovery plan approved with creditors.
The request for recovery of the Compre Mais network was approved in June 2013, by judge Anglizey Solivan de Oliveira, of the Fourth Civil Court of Várzea Grande. Thus, at the time, the supermarket chain claimed to have debts totaling around R$37,7 million.
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Furthermore, according to the magistrate who declared the bankruptcy of the rival Grupo Pão De Açúcar (GPA), in addition to the various requests for conversion (amendment) of the judicial recovery plan presented, the judicial administrator appointed to monitor the process pointed out the non-payment of debts initially agreed and discussed with the supermarket chain. According to the excerpt of the decision, the default of the company under reorganization towards the creditors was also reported by the judicial administrator when presenting the activity report, where it was stated that no payments were made to the financial institutions.
Closing of rival GPA supermarket units
During the discussion of this new plan, however, the supermarket chain sought to extend the debt payment period and also requested a grace period of one year to start paying in installments, which, according to the judge, did not meet the limits provided for in the initial decision of the judicial recovery process. In the judge's opinion, the measure would place a significant burden on creditors, who have been waiting since 2013 to receive their credits, as the attempt to recover the company was frustrated.
Another point that influenced the judge's decision, according to the sentence, was the closure of units of the Compre Mais supermarket chain, which, during the recovery process, went from eight branches to just one. The closures, according to the ruling, were carried out without prior communication to the court which, in the judge's opinion, demonstrated the ineptitude of Grupo Pão de Açúcar's rival and even a lack of will to comply with the recovery plan.
Judge prohibits the sale of properties
According to the Judge, given this totally negative situation, it is clear that the company under recovery is not in a position to bear the accumulated liabilities, not even under the conditions of the new plan, so that prolonging its activities constitutes a mistake, the losses of which can be aggravated mainly by creditors. In addition to declaring the supermarket chain bankrupt, judge Luis Otávio Pereira Marques prohibited the sale of the properties where the Parque Cuiabá and Morada do Ouro branches operate.
The measure was taken in response to a request from the judicial administrator and taking into account, in accordance with the ruling, the closure of the activities of these units without prior communication to the Judiciary. According to the judge, the supermarket chain not only reported the closure of the units, but also did not provide explanations about the destination of the properties.
