The Third Panel of the Superior Court of Justice (STJ) issued a landmark decision recognizing the standing of the Public Treasury to file for the bankruptcy of a company indebted for taxes, provided that ordinary collection mechanisms—particularly tax foreclosure proceedings—have been previously exhausted. This is the first specific precedent of the Court on this matter.
Background and Departure from Prior Case Law
Historically, the STJ held that the Public Treasury lacked procedural interest to file for bankruptcy, since it had its own instruments for collecting tax claims—most notably tax foreclosure proceedings (execução fiscal)—in addition to the statutory priority granted to tax credits.
However, the reporting justice, Justice Nancy Andrighi, revisited the prior understanding and emphasized that the reform of the Judicial Reorganization and Bankruptcy Law, enacted by Law No. 14,112/2020, substantially altered this framework. According to the justice, the current legislation does not distinguish between public and private creditors regarding standing to file for bankruptcy, broadly referring to “any creditor.”
In addition, reference was made to the precedent established under the repetitive appeals procedure (Theme 1092), which allowed the filing and continuation of tax claims within bankruptcy proceedings, thereby rejecting the alleged structural incompatibility between tax foreclosure and bankruptcy.
Grounds for the Public Treasury’s Procedural Interest
According to the prevailing opinion, the Public Treasury’s procedural interest arises from the frustration of tax foreclosure proceedings, when the typical mechanisms for asset seizure prove ineffective.
The justice underscored that bankruptcy proceedings offer specific tools capable of enabling the satisfaction of public claims, such as:
- universal collection of assets;
- clawback actions;
- liability of shareholders and directors;
- investigation of fraudulent acts;
- establishment of the legal look-back period (termo legal) of bankruptcy.
In this sense, bankruptcy does not replace tax foreclosure, but becomes a subsidiary and exceptional avenue, triggered only upon demonstrated ineffectiveness of traditional enforcement mechanisms.
The Office of the Attorney General of the National Treasury (PGFN) welcomed the ruling, describing it as a relevant tool in combating habitual tax debtors and practices involving asset shielding or depletion.
From the taxpayers’ perspective, however, the decision should be viewed with caution, given the risk that bankruptcy filings may be used merely as a revenue-raising or coercive instrument, potentially undermining the collective nature of bankruptcy proceedings, which produce systemic effects on employees, suppliers, financial institutions, and the market as a whole.
Conclusion
The ruling in REsp No. 2,196,073 represents a significant shift in the relationship between tax enforcement and insolvency law, expanding the range of tools available to the tax authorities, while conditioning their use on the proven failure of tax foreclosure proceedings.
If this understanding becomes consolidated, the Public Treasury’s actions will require greater evidentiary rigor, while companies will need to intensify attention to the management and regularization of tax liabilities, particularly in financially distressed scenarios.