Brazilian cooperative liquidations

Recent developments in Brazil involve the liquidation of two distinct cooperatives under different circumstances.

In mid-October, the Central Bank of Brazil ordered the extrajudicial liquidation of Credipaiva, a small credit cooperative serving employees of the Newton Paiva University Center. The regulator cited a “grave violation of the norms that discipline the institution's activity” and a failure to comply with previous determinations. As part of the process, the assets of former administrators have been frozen while investigations into potential administrative sanctions continue.

By late October, the Cotribá Agricultural Cooperative in Rio Grande do Sul entered a voluntary extrajudicial liquidation process. This follows a court ruling that denied the entity’s request for judicial recovery. Facing approximately R$ 1.427 billion in debt owed to over 20,000 creditors, Cotribá is utilizing a model that allows for operational continuity. The cooperative intends to maintain its 60 business locations to continue serving rural producers while managing assets and negotiating debt under a temporary suspension of collections.