At the 3rd Brazilian Cerealist Congress, we contributed to expanding the discussion on the alternatives available to creditors in the face of the growing use of judicial reorganization in agribusiness. The presentation led by Thomas Dulac Müller, managing partner at CPDMA, highlighted the key points of attention for cerealists and other stakeholders in the chain, focusing on collective organization, strategic participation in assemblies, and the opportunities made possible by the creditors’ alternative plan.

By exploring practical aspects of the legislation and voting dynamics, the content aims to offer a clear and functional understanding of how to protect positions, reduce risks, and structure more efficient solutions in restructuring scenarios.

Below, we provide the full text presented at the event, including all details, explanations, and practical references:

In today’s agribusiness landscape, the judicial reorganization of rural producers is no longer an exception — it has become a recurring reality. For the cerealist creditor, this means, in practice, two main consequences. The first is that a significant portion of their credits may become subject to judicial reorganization, involving suspension of executions, extended payment terms, haircuts, and uncertainty regarding cash flow. The second is that, once the reorganization is admitted, the logic shifts from “every creditor on their own” to a collective process governed by law and decided in a creditors’ assembly.

It is precisely in this context that the creditors’ alternative plan comes into play. This instrument allows organized creditors, such as a coordinated group of cerealists, to reject draconian plans and propose their own solution — including the takeover of assets and a much shorter exit horizon.

The idea here is to explain, step by step, how this works in practice.

1. What happens when the debtor enters judicial reorganization and where the cerealist’s credit fits into this scenario

When the judge grants the processing of the judicial reorganization, three main effects provided for in Law 11.101/2005, particularly in Articles 6 and 49, generally come into force:

i. there is a suspension of individual lawsuits and executions against the debtor for 180 days;

ii. the conditions of the credits subject to reorganization are frozen as of the legal cutoff date; and

iii. the dispute ceases to be handled through dispersed individual executions and is instead resolved collectively, through a plan and a creditors’ assembly.

For the cerealist, these effects unfold as follows: when the credit is concursal (for example, supported by an invoice, supply agreement, mercantile current account, etc.), it enters the judicial reorganization and becomes subject to the approved plan. In cases of extraconcursal credit, expressly provided for in the legislation, there is the possibility of remaining outside the reorganization, with separate enforcement.

This is the case, for example, with certain structured transactions involving physical CPRs linked to barter arrangements, in which the CPR Law (Law 8,929/1994, art. 11, as amended by Law 14,112/2020) now provides that the credits and guarantees are not subject to the effects of judicial reorganization and are handled under their own separate regime.

In practice, many cerealists hold mixed portfolios. Part of their credits is protected by more robust structures and guarantees, while another portion becomes locked inside the judicial reorganization. It is precisely this segment subject to reorganization that the alternative plan becomes a strategic protection tool for.

2. From passivity to strategy: the creditor’s role after the judicial reorganization is processed

Once the reorganization is processed, complaining about the plan in the courthouse hallway is not enough. As a rule, the debtor will present a plan with long extensions, significant haircuts, grace periods, and a payment horizon that may reach 10, 15, or even 20 years. Real protection requires three steps: first, understanding which credit class the cerealist falls into, which in most cases means Class II, III, or IV. Second, organizing with other creditors in the same class, especially other cerealists, cooperatives, input suppliers, and regional financial institutions. Third, acting in a coordinated manner at the General Assembly of Creditors.

It is in the Creditors’ General Assembly (AGC) that it is decided whether the debtor’s plan will be approved, rejected, or adjusted, and also whether there will be political and legal room to open the way for the creditors’ alternative plan. Without organization, each cerealist acts as an isolated vote, easily diluted in a process driven by the debtor and major financial players. With organization, the group becomes a relevant bloc in the assembly, capable of influencing the voting outcome and the very dynamics of the negotiation.

3. What the creditors’ alternative plan is, from a legal standpoint

The possibility for creditors to present an alternative plan was introduced by Law 14,112/2020, which reformed Law 11,101/2005 and incorporated this mechanism into provisions such as Article 56. In simplified terms, the reform opened two windows in which creditors can take the lead in crafting the solution. The first window appears when the debtor’s plan is rejected by the assembly. In this scenario, instead of the case moving directly to bankruptcy, the AGC itself may deliberate on granting a 30-day period for creditors to submit an alternative plan. The second window arises when the debtor’s plan is not voted on within the legal timeframe. If the stay period expires without the plan being deliberated on, the law again allows creditors the opportunity to present their own plan, provided legal requirements are met.

In addition, the legislation requires a minimum level of support for the alternative plan to be submitted to a vote. In general terms, this support may be demonstrated through the expression of more than 25% of the total credits subject to judicial reorganization, or more than 35% of the credits present at the assembly in which the alternative plan is discussed. This shows that an alternative plan is not an improvisation. It requires a group of creditors with real weight in credit value and the coordination necessary to formulate, formalize, and articulate the proposal within short deadlines.

The law itself provides that the plan submitted by creditors may include the capitalization of credits, with the conversion of debt into equity participation, changes in the control of the debtor company, and the organization of the sale of assets or productive units, as set forth in Article 56 of Law 11,101/2005. Based on this framework, it is possible to structure the removal of the current management, the appointment of new managers indicated by the creditors, and the implementation of stricter oversight mechanisms over the administration. From an economic standpoint, the alternative plan is an opportunity for creditors to take command of the solution when the debtor insists on an unviable or abusive plan.

4. Control blocs in the Creditors’ Assembly: intelligent mass instead of audience

For cerealists, the key point is straightforward. Isolated, each creditor is merely a passenger. Organized, the group becomes the pilot — or at least the co-pilot — in steering the reorganization. Forming control blocs in the AGC means mapping out who the relevant creditors are in each class, identifying other cerealists, cooperatives, tradings, banks, and suppliers, and establishing a minimum prior alignment on certain issues. Among these issues are what is acceptable in terms of term extensions, haircuts, and guarantees, and where the red line lies beyond which the group rejects the debtor’s plan and considers moving toward an alternative plan.

With this level of coordination, the group of cerealists can, first, influence the negotiation of the debtor’s plan by adjusting conditions still during the debate phase. Second, if necessary, it can coordinate the rejection of the plan at the assembly, opening the procedural path for the alternative plan. Third, it can nominate members to the Creditors’ Committee and influence the day-to-day conduct of the reorganization, with greater oversight, information demands, and monitoring of asset management.

This creditor bloc ceases to be a mere instrument of manipulation and begins to operate as an intelligent mass, with its own agenda. This agenda tends to include preserving the economic value of the credit, rejecting extensions and haircuts that are incompatible with the working-capital reality of agribusiness, and, in certain cases, pursuing the acquisition of assets that are directly relevant to the chain, such as silos, warehouses, industrial units, and origination structures.

5. Outsourcing the position: the role of FIDCs

Not every cerealist wants or is able to be on the front line of a judicial reorganization. Legislation and market practice, however, allow specialized funds to purchase credits and assume this role on behalf of the original creditor. The Credit Rights Investment Fund, or FIDC, is a vehicle that allocates most of its assets to credit rights — in other words, companies’ accounts receivable. Today, the participation of FIDCs in purchasing credits from debtors in judicial reorganization is already well established, effectively creating a secondary market for distressed receivables.

In the specific case of cerealists, a common strategy is to assign the credit subject to reorganization to an FIDC, with a negotiated discount. From that point on, the fund becomes the formal creditor. It typically has a specialized legal team, the ability to consolidate positions by purchasing credits from several smaller creditors, and the leverage to lead the coordination of an alternative plan, voting as a bloc in the assembly.

For the cerealist, this strategy transforms a judicialized credit—difficult to price and with uncertain recovery—into immediate liquidity, even if at a discount, while outsourcing the burden of attending assemblies, challenging credits, negotiating the plan, monitoring the debtor, and overseeing asset sales. For those who want to remain in the game, there is also the possibility of acting in consortium with a manager or fund, without necessarily selling the entire position, combining their own credit with participation in a structured vehicle.

6. The alternative plan as a path for asset takeover and a shorter-resolution strategy

One of the major advantages of the alternative plan is the possibility of changing the logic of the game. Instead of being tied to a debtor’s plan with a 20-year term, long grace periods, a 70% haircut, and low transparency in the sale of assets, creditors have the opportunity to design a plan with a shorter overall timeline, a clear schedule for asset realization and payments, stricter control mechanisms over management and cash flow, and the possibility of directly or indirectly taking over strategic assets.

Based on the reformed law, the alternative plan may provide for the capitalization of credits, making creditors shareholders of the restructured business, the removal of the current management with the appointment of new managers indicated by the creditors, and the organization of the sale of isolated productive units or specific assets. Such sales may be directed to vehicles controlled by creditors or to strategic third parties, but always under competitive and transparent rules.

For a group of cerealists, this may mean turning a scenario of prolonged default into a realistic three- to five-year plan. In such a plan, it is possible to structure the orderly sale of silos, industrial facilities, and regional bases, link supply contracts, and even create a new corporate vehicle to operate these assets, with the direct participation of the creditors.

If the alternative plan is not submitted or ends up being rejected, the legal trend is for the case to be converted into bankruptcy, with a disorderly liquidation and, as a rule, a worse economic outcome for commercial creditors such as cerealists. In many cases, the alternative plan is the last chance for an organized solution before the bankruptcy scenario.

7. Conclusion

In plain terms, a cerealist’s credit can indeed become trapped in a judicial reorganization and subjected to abusive proposals. This is a real risk. But it is not true that the only option is to accept the debtor’s plan and hope for the best. Current legislation gives creditors — especially those who organize themselves as a bloc — the power to reject a bad plan, propose an alternative plan, take over assets, and, in certain scenarios, assume control of the company or, if that is not the case, monetize the credit through a sale to FIDCs and other investors who take the lead in the restructuring.

For this to be feasible, a few essential steps are required:

i. Map out the credits, separating concursal from extraconcursal credits, identifying guarantees, and classifying each credit according to its class;

ii. Organize the cerealists’ bloc in advance of the assembly, with a defined agenda, internal alignment, and clear negotiation limits; and

iii. Rely on specialized legal and financial advisory to structure a consistent alternative plan, whether acting directly or through partnerships or the assignment of credits to specialized funds and investors.

More than a reaction, this movement is strategy. Instead of merely enduring the effects of judicial reorganization, the cerealist begins to influence the outcome of the process.

The full content presented at the Congress — the same you find on this page — is also available in PDF format. Click here to download.