Brazil sees record surge in companies filing for judicial reorganization

Casas Bahia entered August by shutting almost 300 outlets, laying off roughly 3,000 workers and filing for judicial reorganization to address 17.3 billion reais in liabilities while aiming to safeguard over 20,000 jobs. A São Paulo judge granted a 180-day stay after the company argued that creditor actions threatened its recovery. Nationwide, 1,756 firms filed for reorganization in 2025, surpassing the previous record of 1,688 in 2019.

Analysts point to Brazil’s persistently high benchmark interest rate, changes in consumer behavior and competition from e-commerce as key pressures, while noting that some companies use the process strategically to renegotiate debts and gain competitive advantages. The 2020 legal reforms, which tilted the system toward debtors, may have further encouraged filings. Ongoing cases often linger for years, contributing to a growing backlog of companies in restructuring.