The FLH Litigation team has achieved another important victory for the agribusiness sector. The controversy concerns whether or not agricultural commodities can be classified as capital goods essential to the activity of rural producers for the purposes of the protection provided for in paragraph 3 of article 49 of Law No. 11,101/05.

In line with the leading case decided in REsp No. 1.991.989/MA (a case handled by FLH), the STJ reaffirmed in the judgment of AREsp No. 2.977.087/GO the impossibility of classifying agricultural commodities under this legal concept and, consequently, the impossibility for rural producers to use this rule to avoid delivering their agricultural production to the respective purchasers and not suffer any constraints as a result of contractual default. The Reporting Judge, Minister Nancy Andrighi, reinforced the understanding that capital goods are those used in the production process of the company undergoing reorganization and do not include the final production of the business activity, as is the case with agricultural commodities. The STJ also understood that “if a certain asset cannot be classified as a capital asset, the reorganization court cannot make any inference as to its essentiality.”

he decision follows the terms of the law, created precisely to enable rural entrepreneurs to continue developing their core business as normal, despite judicial intervention to overcome their economic and financial crisis, since the logic is precisely to allow the maintenance of the source of production and the preservation of the company’s economic activity. The preservation of legal transactions—including contracts for the sale of agricultural production, in the case of rural producers—is essential to achieving this goal.

The precedent reinforces FLH’s leading role in discussions of major relevance to the agribusiness sector and its main players.