Judgment No. 10893 of 2024: Bankruptcy Avoidance and Closure of Insolvency Proceedings

The recent order of the Court of Cassation, No. 10893 of April 23, 2024, offers important points for reflection regarding bankruptcy avoidance actions, emphasizing the procedural standing of the trustee even in the presence of pending litigation. This article aims to analyze the content of this judgment and the practical consequences it entails for legal professionals and parties involved in insolvency proceedings.

Context of the Judgment

The central issue addressed by the Court concerns the relationship between the closure of bankruptcy and the possibility of exercising bankruptcy avoidance actions. According to Article 118, paragraph 1, no. 3, and paragraph 2 of the bankruptcy law, bankruptcy can be closed even in the presence of pending litigation, granting the trustee the standing to continue the avoidance action. This means that the pendency of the insolvency proceeding does not constitute an obstacle to the trustee's standing, who can continue to protect the interests of the creditor pool.

Headnote of the Judgment

Bankruptcy avoidance action - Pending litigation - Closure of bankruptcy for final distribution of assets - Art. 118, paragraph 1, no. 3, and paragraph 2, bankruptcy law - Procedural standing of the trustee - Existence. In matters of bankruptcy avoidance, the pendency of the insolvency proceeding is not a condition for the continuation of the action, where the bankruptcy has been closed for final distribution of assets, pursuant to Art. 118, paragraph 1, no. 3, and paragraph 2, bankruptcy law, since the provision allows closure despite the presence of pending litigation, with respect to which the trustee retains procedural standing in subsequent stages and appeals.

Practical Implications

The implications of the judgment are manifold and of great importance. Among the main ones, we can highlight:

• Continuity of legal action: the trustee can continue to pursue the necessary actions for the protection of creditors, even after the closure of bankruptcy.
• Regulatory clarity: the judgment clarifies that the closure of bankruptcy does not preclude pending legal actions, simplifying the trustee's position.
• Protection of the creditor pool: the trustee's standing to proceed with avoidance actions is fundamental to ensuring that creditors' rights are respected even after the closure of the insolvency proceeding.

Conclusions

In conclusion, order No. 10893 of 2024 represents an important reference point for understanding bankruptcy avoidance actions. It reiterates the possibility of the trustee's standing despite the closure of bankruptcy and the presence of pending litigation, thus ensuring greater protection for creditors. Industry operators must take these developments into account to better guide their legal strategies and protect the interests of their clients.