Eldorado Brasil: Justice issues new result favorable to Paper Excellence
With the approval of the withdrawal of an embargo by the PE, the end of the conflict of jurisdiction in the second instance was confirmed
In a trial held this Wednesday, the 19th, on the billionaire dispute over Eldorado Celulose, the Special Group of the Court of Justice of the State of São Paulo (TJ-SP) approved the withdrawal of an embargo by Paper Excellence (PE), confirming the end of the conflict of jurisdiction in the second instance. It was also decided that the judge José Benedito Franco de Godói continues as rapporteur of the case.
PE won two more at the trial, as J&F’s and Eldorado’s claims were unsuccessful. J&F’s claim asked for the annulment of the first instance sentence, handed down in July 2022 by Judge Renata Maciel, authorizing the transfer of control of Eldorado to PE. The argument of the Batista holding is that the judge could not have decided on the merits of the case, since the process had been suspended by decision of the judge José Carlos Costa Netto, after the conflict of competence had been established between the judges.
Eldorado’s other argument referred to the dispute that arose between Costa Netto (rapporteur for the conflict of jurisdiction) and Franco de Godoi (who had already been chosen as rapporteur for the case). For Eldorado, the judge Franco de Godoi could not have determined the transfer of its shares held by J&F to Paper Excellence because, at that moment, there was a decision by Costa Netto (conflict rapporteur) suspending the entire process again.
The Public Ministry of São Paulo had previously rejected the two complaints and the Special Group followed the MP’s understanding.
LEARN MORE ABOUT THE DISPUTE FOR ELDORADO CELULOSE
The dispute over Eldorado Celulose began when J&F Investimentos, owned by brothers Joesley and Wesley Batista, sold Eldorado Celulose to Paper Excellence in 2017 for BRL 15 billion. PE signed a contract for the acquisition of 100% of Eldorado, paid BRL 3.8 billion for 49.41% of Eldorado’s shares, becoming at that moment a partner in half of the Brazilian pulp company.
The multinational would pay for the remainder of the shares, 50.59%, after the release of Eldorado’s debt guarantees, which should happen within a year, according to the contract signed between the parties. During the process of closing the deal, J&F asked for an additional BRL 6.4 billion to deliver to Eldorado, which was not accepted by Paper and the case ended up in arbitration.
In February 2021, the three arbitrators who judged the case agreed with Paper Excellence in the dispute and stated that J&F and Eldorado acted in bad faith, by making it difficult to close the deal. J&F decided to go to court asking for the annulment of the result of the arbitration process, but Judge Renata Maciel, of the 2nd Business and Arbitration Disputes Court, ruled in favor of PE.
