Unable to Sell Assets, Sarava Risks Declaring Bankruptcy

Unable to sell such assets as its retail outlets and its online domain, Brazil’s Sarava Libraries suffered a new setback in its judicial recovery plan and risks declaring bankruptcy, Lodi Valley News reported. After an action by one of its creditors, technology company Infosys, which questioned the retailer’s plan filed in March, the court has now decided that Sarava will file a new proposal within 30 days, under pain of filing for bankruptcy. However, a few days before this decision the company had already made an adjustment to the plan and is contemplating the failure to sell the assets. According to the decision of the first chamber reserved for the Commercial Law of the Court of Justice of São Paulo, the new plan will need to be voted on within 30 days. To be approved, the company will need to comply with what has been previously verified, focusing on business creditors. It has already been determined, for example, that the company regularly pays up to R$160,000 in the form of work credits. Under judicial reorganization since 2018 and with debts of about R$674 million at the time, Sarava was not able to sell the assets that would be used to pay creditors and inject cash into the operation. It recently made the third attempt to sell some stores and its e-commerce business, but it didn’t attract interested parties. Read more.