Record number of Brazilian companies seek bankruptcy protection

Casas Bahia, a 70-year-old Brazilian retailer known for selling on installment to low-income families, closed nearly 300 stores, laid off about 3,000 workers, and filed for judicial reorganization in August to restructure 17.3 billion reais ($3.46 billion) in debt. A São Paulo judge granted a 180-day stay after creditors had already frozen about 9 million reais in company accounts.

The filing is part of a record wave: Brazilian companies filed 1,756 reorganization petitions in 2025, the most since records began in 2005, with 6,341 companies now in proceedings, up 21.2% year over year. Experts point to interest rates that hit 15% and stayed there for months, e-commerce competition, and proceedings that now average 4.2 years to resolve.

Legal scholars note the 2020 overhaul of Brazil's bankruptcy law tilted the system toward debtors, letting companies use reorganization as a competitive strategy rather than a last resort. In bankruptcy outright, by contrast, creditors in São Paulo state recover an average of just 6 centavos per real owed, pushing many to accept reorganization plans that cut debt by as much as 85%.

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