Monetary Correction in Bankruptcy

Is It Possible Under the Current Legislation?

Abstract

The article analyzes the possibility of applying monetary correction in bankruptcy and composition proceedings, with the aim of arguing that, as a rule, the legislation in force does not authorize its broad application to claims subject to bankruptcy proceedings. It adopts a legal-dogmatic and systematic methodology based on the examination of legislation on monetary correction, bankruptcy law, the legal nature of decisions rendered in the verification and admission of claims, and the structural principles of bankruptcy law. It argues that Brazilian legislation expressly regulated monetary correction in specific situations, including labor, tax, and extrajudicial liquidation matters, but did not repeal the special regime of bankruptcy, in which the principle of par conditio creditorum and the prohibition on fluctuation of liabilities after adjudication prevail. The article further shows that decisions rendered in the verification and admission of claims are declaratory in nature and therefore do not constitute debts resulting from judicial decisions for purposes of Law No. 6.899/1981, and it distinguishes procedural monetary correction from substantive monetary correction, admitting the latter only exceptionally as a means of full restitution in cases of fraudulent bankruptcy. It concludes that the indiscriminate application of monetary correction in bankruptcy would undermine equality among creditors and mainly benefit privileged creditors, and for that reason it should be rejected, except in cases expressly provided by law or in exceptional situations involving fraud.