Naval Construction in Pernambuco Faces Tension: Atlântico Sul Shipyard May Declare Bankruptcy in Coming Days, “Default” Risk Worries Creditors

Creditors Accuse The Shipyard Atlântico Sul In Pernambuco Of Evading Judicial Recovery. Group Fears Default And Will Seek Initiation Of Bankruptcy Process

Tension in the shipbuilding industry of Pernambuco! Judge Eduardo José Loureiro Burichel, of the 2nd Civil Court of Ipojuca – Pernambuco, signed a judicial decision that points to indications of a strategy by the Atlântico Sul Shipyard to evade creditors and avoid debt payments even before the judicial recovery process, already approved in February 2020.

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According to the judge, the shipyard in Pernambuco would be using Consunav, of which Atlântico Sul is the 100% controlling entity, as a financial arm, keeping the minimum possible cash on hand.

In the upcoming creditors’ assembly of Atlântico Sul, which takes place in Pernambuco on March 3, Engita, one of the creditors, will propose the bankruptcy of the shipbuilding yard.

The Bad Faith Opinion Of The Shipyard EAS In Pernambuco

The judge states in the ruling that the “Atlântico Sul Shipyard would be hiding its assets from the reach of its creditors, under the veil of a different legal person, namely, Consunav, of which the executed is the owner of the entirety of the capital stock, with asset concealment.”

Burichel also said that at no time during the execution or judicial recovery process did the shipyard present a collaborative attitude in fulfilling its obligations to indicate the assets/rights it owns for seizure.

The complaint from Engita, a company that is owed about R$ 50 million by the shipyard, was the “ammunition” for the judge’s decision. “The company is practically ceasing operations due to the default it suffered from the shipyard,” says attorney Hebron Cruz de Oliveira, legal representative. “It’s a David versus Goliath struggle,” he summarizes. “Given these maneuvers, the situation for creditors becomes very fragile. We estimate that the shipyard’s assets cover its total debts. In this case, a bankruptcy request would be more appropriate,” says the lawyer, who will present the proposal at the assembly on Wednesday. He also complains that the recovery plan provides for the payment of debts without interest over more than three decades. “Today, we know that the assets cover the losses, but what guarantee do we have ten years from now?” he questions.

Strategy Of Atlântico Sul – Pernambuco

In light of the Atlântico Sul’s bad faith strategy, Engita filed a lawsuit (incident of reverse disregard of legal personality) and obtained a favorable decision in Pernambuco, determining the extension of patrimonial responsibility to Consunav Rio Consultoria e Engenharia.

The analysis of Consunav’s balance sheet shows that the company never issued an invoice and, therefore, had no revenue. “Everything points, as stated in the judicial decision, that Consunav served to divert financial resources from the shipyard to bypass its own obligations through loan operations between them,” states Engita’s lawyer. “Normally, judges make this type of decision when there are serious indications of fraud,” he points out.

The processing of the judicial recovery of the Atlântico Sul Shipyard (EAS) and Consunav Rio Consultoria e Engenharia was approved in February 2020.

The decision to suspend actions and executions by creditors against the shipyard, conditioned on the monthly presentation of accounting reports of the judicial recovery process, was given by Judge Ildete Veríssimo de Lima, of the 1st Civil Court of Ipojuca, Pernambuco.