A Brazilian affiliate has secured a bankruptcy judgment against TelexFree.
What does that mean?
…I’m not sure.
A TelexFree affiliate claims the company owes them $50,000. That prompted a lawsuit, which culminated in a bankruptcy order on Monday.
According to the ruling, the company confirmed the amount due, said it was unable to pay the debt and did not oppose the request.
Based on the order itself, it appears the above scenario triggers a bankruptcy judgement and proceedings.
The order is lengthy and difficult to follow (auto-translate), but an accompanying Globo report breaks it down.
In the decision was appointed a judicial administrator – a company in the state of São Paulo – who will collect the assets and documents related to the company.
This sounds like the Brazilian equivalent of the US Trustee.
Telexfree’s managing partners must present the nominal list of creditors.
The judge also ordered the suspension of all actions or executions against the company, with some reservations provided by law, in addition to the sealing of the company, even if she has already closed its activities.
In addition, the magistrate points out that any evidence of crime committed by the partners could result in pre-trial detention.
Globo notes TelexFree owes more than R$2 billion to creditors. With parallel US proceedings and seized assets, what impact this Brazilian ruling will have is unclear.
Trying to follow TelexFree proceedings in Brazil is supremely confusing.
Part of that is the language-barrier, but also the proceedings themselves seem convoluted.
Every few months (sometimes up to a year at a stretch) we’ll get some news, that seemingly contradicts or is unrelated to previous coverage.
Previous coverage is rare to update. So what we’re left with is disjointed developments for a singular company that collectively seem unrelated.
TelexFree stories we’ve seen out of Brazil over the past year include
Seriously though, hard is it charge Costa and Wanzeler, arrest them and hold a criminal trial?
While civil TelexFree proceedings are unbearably dragging on in the US, James Merrill was sentenced back in early 2017.
Wanzeler would be in a US prison too by now had he of not fled to Brazil.
And still TelexFree proceedings continue to pop up in various Brazilian courts.