In yet another chapter of the legal dispute between J&F Investimentos and Paper Excellence for control of Eldorado Brasil, the 2nd Reserved Chamber of Business Law of the Court of Justice of the State of São Paulo determined, on Friday, 30, the “suspension of acts aimed at transferring the shareholding control of Eldorado” to Paper Excellence, its minority partner, as defined by the lower court judge on July 13th.
According to a relevant fact published by Eldorado, the decision was based on the appeals presented by J&F, which challenge the court decision handed down at the time by Judge Renata Maciel, from the 2nd Business Court and Arbitration Conflicts of the Judicial District of São Paulo.
The suspension of acts for transfer also includes the early payment of debts of Eldorado with BNDES, Banco do Brasil and Banco De Lage Landen, which total approximately R$ 1.5 billion, and payment of the price and transfer from the ownership of shares issued by Eldorado to the final judgment of the action, the merits of which should only be resolved in a few months.
According to the relevant fact, the judges also decided that “the prohibition is expressly maintained”, for CA Investment (Paper Excellence’s investment vehicle), “to adopt any judicial or extrajudicial measures, especially before foreign courts, for recognition or enforcement of the partial arbitration award”.
In the arbitration award at the beginning of February, Paper Excellence was victorious in the proceddings it had had with J&F for three years, with the objective of finalizing the acquisition of the command of the pulp manufacturer. Since 2017, Paper Excellence has owned 49.4% of Eldorado’s capital, while J&F holds 50.6% of the shares.
After the arbitration decision, J&F asked the São Paulo Court to annul the Arbitration Chamber’s decision, alleging several irregularities in the process. The holding of the Baptist brothers presented three justifications in the request: espionage, omission of a conflict of interest by one of the arbitrators and exacerbation of power. Upon obtaining an injunction suspending the effects of the arbitration decision, the company paralyzed the process of transferring the company to Paper Excellence.
In a note, Paper Excellence informed that it accepts “with respect and serenity” the preliminary decision of the 2nd Chamber on the “injunction pleaded by J&F to suspend certain effects of the arbitration award” and reaffirmed that it will continue to act to protect the right to buy 100% of the shares of Eldorado according to the contract and guaranteed in a unanimous decision in the arbitration.
J&F did not comment on the matter.