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Judicial Reorganization

In 2015 PDG began a debt restructuring process aimed at preserving its capacity to fulfill the obligations assumed to creditors and customers, foreseen agreements to extend interest payments and amortization, granting of new financing to cover general expenses and administrative. However, the agreements did not achieve the originally expected effect and PDG continued to face difficulties in the management and continuity of its real estate projects, such as growing number of cancellations, the drop in sales throughout Brazil, the interruption of construction projects in progress, the accumulation of condominiums and property expenses and costs with suppliers of products and services, as well as the large volume of lawsuits filed by customers, former customers and employees of service providers.

Thus, the Board of Directors considered that it was not possible to find, in the extrajudicial scope, a sustainable solution to the financial crisis, and concluded that the filing of the PDG’s Judicial Reorganization was the most appropriate measure for (i) continue advancing, in an organized manner and with pre-defined deadlines and procedures, with the coordination of all those involved in the Restructuring Process; (ii) enable the maintenance of normal operating activities of the Company and its subsidiaries; as well as (iii) preserving the value and protecting the Company's and its subsidiaries' cash.

Thus, on 02/22/17, the Company filed a request for Judicial Reorganization for the 512 companies of the Group (PDG). On 03/02/17, the request for judicial reorganization was granted by the Judge of the 1st Bankruptcy and Judicial Reorganization Court of the Judicial District of São Paulo in the case file number 1016422- 34.2017.8.26.0100.

The granting court decision, among other measures, determined the appointment of PricewaterhouseCoopers Assessoria Empresarial Ltda. to act as Judicial Administrator.

On 03/27/17, at the Extraordinary General Meeting, the shareholders ratified the request of RJ of the Company.

The plan was approved on 11/30/17 by the General Meeting of Creditors, and was certified on 12/06/17. 

Among the main measures approved in the plan to restructure the Company's liabilities are: (i) limitation of  amounts for reversal of charges on credits due until the plan's final approval; (ii) possibility of converting debt into  Company shares; and (iii) extension of the remainder of the Company's public concursal debt in up to 25 years.

In 2020 there was a substantial increase in requests from Labor Creditors, so that their payment under the terms agreed in Clause 4.2.3 of the Plan would cause an imbalance in PDG's cash flow, impacting the group's economic and financial conditions. In this context, in order to comply with the payment of Labor Creditors and adjust the payment of these creditors to the actual economic and financial perspective of the Company, PDG presented an Amendment to the Judicial Recovery Plan.

The Amendment was approved by the general creditors meeting on 11/30/20.

On 10/14/21 the Court of the 1st Bankruptcy and Judicial Reorganization Court of the Judicial District of the Capital  of São Paulo issued aR20sentence terminating the judicial reorganization process of the Companies and their  subsidiaries. 

The closing sentence of the Judicial Reorganization was rendered pursuant to art. 63 of Law No. 11.101/2005, as  amended, and acknowledged that the PDG Group has complied with all obligations provided for in the judicial  reorganization plan and its amendment. 

In addition to the information disclosed to the market during the Judicial Reorganization process, the Companies  inform that the means of recovery agreed in the Plan and in the Amendment have been successfully implemented,  in accordance with the terms, terms and conditions set forth in such instruments. The Judicial Reorganization  allowed the PDG Group to restructure a liability of more than R$5.3 billion before more than 22,000 creditors. 

Therefore, the Judicial Reorganization was successfully concluded, providing the Companies with the maintenance  of normal operating conditions on solid bases, overcoming the crisis and conditions to continue the payment of the  bankruptcy liability balance and resume the growth plan. 

In this regard, the Companies clarify that the bankruptcy credits not yet settled and the illiquid credits, whose  triggering event is prior to the request for Judicial Reorganization, remain subject to the effects of the Plan and the  Amendment and will be paid in accordance with the terms, terms and conditions set out in these instruments.

This section is intended for informational purposes only and must always be interpreted together with the documents approved and confirmed in court, available by Grupo PDG on its official communication channel (http://ri.pdg.com.br). All documents can also be viewed on the website of the Superior Court of Justice of the State of São Paulo (https://esaj.tjsp.jus.br). The main papers and documents are also available for download on this page.

1. Grupo PDG’s Judicial Reorganization was terminated. What does that mean?
Grupo PDG filed a request for judicial reorganization on February 23, 2017 (case file no. 1016422-34.2017.8.26.0100, which was processed in the 1st Bankruptcy Court of the Judicial District of São Paulo – “Judicial Reorganization” and “Court of Judicial Reorganization”). Grupo PDG’s creditors approved the Judicial Reorganization Plan (“Plan”) on November 30, 2017. The Court of Judicial Reorganization confirmed the Plan on December 6, 2017.

On November 30, 2020, creditors approved the amendment to the Plan (“Amendment”). The Amendment was exclusively aimed at changing the form of payment for labor credits (Class I) originally set forth in the Plan. The other terms of the Plan remained unchanged. The Court of Judicial Reorganization confirmed the Amendment on December 13, 2020. Considering that since the approval of the Plan and the Amendment Grupo PDG has duly fulfilled the obligations set forth therein, within the determined term, the Court of the Judicial Reorganization ended the Judicial Reorganization by means of a decision rendered on October 14, 2021, on pages 257,481/257,493 of the Judicial Reorganization case records (“Decision”), pursuant to article 63 of Law no. 11.101/2005.

This means that Grupo PDG has successfully restructured its debts and is no longer under judicial reorganization. However, the Judicial Reorganization termination does not cease the effectiveness of the payment terms and conditions set forth in the Plan and the Amendment. Grupo PDG will continue to perform and fulfill all obligations undertaken, including the payment of all creditors, i.e., those who hold credits subject to the Judicial Reorganization.

2. I am a creditor of Grupo PDG. Will my credits be paid pursuant to the terms and conditions of the Plan and the Amendment?

As set forth in page 11 of the Decision and article 49 of Law no. 11.101/2005, all credits existing on the date when the Judicial Reorgaconsidered, regardless of subsequent court decision recognizing such credit. If nization was filed (February 23, 2017) that are not already overdue are subject to the Plan and the Amendment.

In accordance with the STJ’s understanding, set forth in the decision of Repetitive Appel no. 1,051, in order to verify if your credit existed or not on the filing date, the date of the triggering event of the credit liability should be considered, regardless of subsequent court decision recognizing such credit. If the aforementioned date is before February 23, 2017, your credit is subject to the Judicial Reorganization and should be paid according to the Plan of the Amendment, as applicable.

3. I am a creditor of Grupo PDG. When and how will my credit be paid?

The payment term and form for credits subject to the Judicial Reorganization will depend on the payment class and option in which the creditor is classified. Creditors can verify the Provisional Overall Creditor List and the Consolidated Options Report and search for their names to check said information. If a creditor is not in the list or disagrees with information provided thereon, he/she should file a proof (include the credit) or file an objection to (question the amount stated) the claim (see item 5).

The Plan and the Amendment set forth different terms and conditions for different classes and options. Payment options, which are still available for creditors who have not exercised their option within the term set forth in the Plan and the Amendment to choose, are indicated in the table below:

Class Option Clause Credit payment
I - Labor Creditors Option A 4.2.1 Credit paid through the issue of PDG Realty shares.
II - Secured Creditors Option A1 4.3.2 Credit payment is amortized with funds from the monetization of Grupo PDG’s real estate assets.
III - Unsecured Creditors Option F 4.4.1.6 Credit paid without discounts and the principal amount matures in January 2038, bearing interest and monetary restatement (TR from the filing date up to the payment date).
IV - ME/EPP Creditors Option C 4.5.1.3 Credit paid without discounts and the principal amount matures in January 2038, bearing interest and monetary restatement (TR from the filing date up to the payment date).
Unsecured creditors (class III) allocated in Options C, D, E, F or G (as per clauses 4.4.1.3.3., 4.4.1.4.3., 4.4.1.5.3., 4.4.1.6.2. and 4.4.1.7.2 of the Plan) and ME/EPP Creditors (class IV) who chose Option C (as per clause 4.5.1.3,2 of the Plan) can decide for the capitalization of their credit. In said case, they will receive shares issued by PDG Realty, traded at the São Paulo Stock Exchange, as payment for their credit. For further information on the optional credit capitalization process, see item 8 below.

4. Is it possible to change my payment option?
No. As agreed on clause 4.1.2.3. of the Plan, the payment option is unchangeable. Pursuant to the Plan and the Amendment, the deadline to exercise the options has already expired, therefore it is not possible to change the option available in the Consolidated Options Report.

Unsecured creditors (class III) allocated on Options C, D, E, F or G and ME/EPP creditors (class IV) who have chosen Option C will be able to choose to translate their credits into shares issued by PDG Realty. For further information on the optional credit capitalization process, see item 8 below.

5. Do I need to include my credit to the Overall Creditor List? Can I choose a payment option?
No. All credits included in the Provisional Overall Creditor List will necessarily be paid according to the following options (already described in item 3 above): (i) for labor creditors, credit will be paid pursuant to Option A (as per Clause 4.2.7 of the Amendment); (ii) for secured creditors, credit will be paid pursuant to Option A1 (as per clause 4.3.3.1. of the Plan); (iii) for unsecured creditors, credit will be paid pursuant to Option F (as per clause 4.4.2 of the Plan); and (iv) for ME/EPP creditors, credit will be paid pursuant to Option C (as per clause 4.5.2. of the Plan).

Unsecured creditors (class III) allocated to Option F and ME/EPP creditors (class IV) who have chosen Option C can choose to translate their credits into PDG Realty shares. For further information on the optional credit capitalization process, see item 8 below.

6. How can I correct or include a credit listed in the Overall Credit List?
With the closing of the Judicial Reorganization, as determined in the decision rendered on October 14, 2021, creditors must file any proof or objection to claim with Grupo PDG and no longer the Judicial Reorganization Court, and the creditor must present all documents that evidence the existence of said credit, as indicated in article 9 of Law no. 11.101/2005.

According to page 7 of the Decision, the credit amount must be restated up to the date the Company filed for the Judicial Reorganization (February 23, 2017).

PDG’s form to file for proof of claim

Therefore, creditors must fill a form in the link provided below, inserting their personal data, information regarding the credit origin and the documents evidencing the claim Grupo PDG will respond to the credit claim in up to 15 (fifteen) business days.

PDG’s form to file for proof of claim

Proof or objection to claim already in progress on the date the of the closing of the Judicial Reorganization will continue pending as decided on page 4 of the Decision.

The Definite Overall Credit List shall be timely disclosed by the Trustee after all proof of claim or objection to claim requests for pending credits are evaluated.

7. What should I do if Grupo PDG does not agree with the credit amount I intend to prove? And also, what should I do if Grupo PDG does not agree with the correction I intend to make in the amount listed in the Overall Credit
Pursuant to the Decision, all requests to include or correct credit amounts subject to the Plan and Amendment must be requested directly to Grupo PDG. If there is no agreement between the parties and the creditor wishes to object to the amount he/she believes to be entitled to, the creditor must file a lawsuit in line with case precedent mentioned on page 6 of the Decision.

8. I am a holder of a first priority claim and want to receive it as unsecured credit (class III) pursuant to the Plan. What should I do?
A creditor with a triggering event after February 23, 2017, or who is entitled to the hypothesis set forth in article 49, paragraph 3 of Law no. 11.101/2005, can opt to receive credits pursuant to the Plan and the Amendment. Any creditor who is fits in the mentioned situation, including holders of Real Estate Receivable Credits issued by PDG Companhia Securitizadora, can make this option. In such case, the creditor must contact Grupo PDG directly at securitizadora-endividamento@pdg.com.br, present the credit calculation as follows (page 7 of the Decision):

(i) the creditor must assess the credit amount on the date the Judicial Reorganization was filed (February 23, 2017);
(ii) following, the amount of credit eventually paid between February 23, 2017 and the conversion date must be calculated, brought to present value to February 23, 2017, using the discount rate equivalent to that set forth in the creditor’s respective agreement; and
(iii) lastly, the final balance that should be considered will be indicated in item (i), less the amount of item (ii).

9. I am an unsecured or ME/EPP creditor, am I entitled to receive my credit as Grupo PDG shares?
Yes, every 3 (three) years as from the Plan’s confirmation date (December 6, 2017), unsecured creditors (class III) allocated in Options C, D, E, F or G (as per clauses 4.4.1.3.3., 4.4.1.4.3., 4.4.1.5.3., 4.4.1.6.2.and 4.4.1.7.2. of the Plan) and ME/EPP creditors (class IV) who are allocated to Option C (as per clause 4.5.1.3.2. of the Plan), can choose to have their credits paid in the form of shares issued by PDG Realty, which are traded at the São Paulo Stock Exchange.

The last capital increase window ended on June 8, 2021. Grupo PDG makes all information related to the adhesion to the next capital increase available on its Investor relations website (http://ri.pdg.com.br).

10. I am a labor creditor; how can I receive my credit in the form of Grupo PDG shares?
Pursuant to clause 4.2.7. of the Amendment, all labor creditors who are not included in the Provisional Overall Creditor List will be automatically allocated to Option A and will be paid in shares issued by PDG realty. On June 8, 2021, PDG Realty completed its first capital increase for the payment of labor creditors and, pursuant to clause 4.2.7 of the Amendment, will adopt all necessary measures to increase its capital every year. Grupo PDG makes all information related to the adhesion to the next capital increase available on its Investor relations website (http://ri.pdg.com.br).

11. How credits from the Pool of Assets available for lien will be paid?
All creditors subject to the special regime of pool of assets available for lien, as set forth in clause 1.6.30, can request their credit in the respective pool of assets, provided that it is active and has sufficient funds.

As regards credits from extinguished pool of assets (or that will be extinguished) after the closing of the Judicial Reorganization, creditors shall be paid pursuant to the Plan and the Amendment, as set forth on page 9 of the Decision and in clause 1.6.30 of the Plan.

The list of companies that are part of the active Pool of Assets available for lien is available for download on this page.

12. Which Specific Purpose Entities (“SPEs”) had their debt restructured through
The list of Grupo PDG companies that had their debts restructured through the Judicial Reorganization is available for download on this page.

13. Is it possible to make an agreement for the payment of credits?
Yes. Grupo PDG and its Creditors can enter into bilateral agreements regarding the credit amount. However, due to article 59 of Law no. 11.101/2005, the agreement cannot rule on the classification, form and option of credit payment, and must necessarily comply with the provisions of the Plan and the Amendment. If the creditor wants to enter into an agreement to add or correct their credit in the Overall Credit List, he/she has to follow the steps mentioned in item 6 above.

14. I want to acquire a property from one of Grupo PDG companies. Do I need to present permit to issue the public deed or any type of court authorization?
No. Considering that the Judicial Reorganization is terminated, there is no need for a judicial intervention during the sale of an asset, since the Plan and the Amendment are complied with, as per item IV of the Decision. Therefore, any Grupo PDG property can be sold without any type of court authorization.

15. In what pages of the case file are the main documents related to PDG’s Judicial Reorganization?
The complete case file (no. 1016422-34.2017.8.26.0100) can be viewed on the website of the Supreme Court of the State of São Paulo (https://esaj.tjsp.jus.br). Below we list the pages of the main papers of the case file, which are also available for download on said page.

Pages Description
1 - 135 Complaint
132,662 - 133,696 Minutes of the General Creditors Meeting approving the Plan
133,287 – 133,534 Confirmed plan
133,738 - 133,767 Decision confirming the Plan
250,487 - 250,545 Minutes of the General Creditors Meeting approving the amendment
250,145 – 250,235 Confirmed amendment
251,253 - 251,257 Decision confirming the Amendment
257,481 – 257,493 Decision terminating the Judicial Reorganization
258,113 Provisional Overall Creditor List
258,113 Consolidated Options Report

16. I am a Creditors included in the Overall Credit List, how can I update my bank information? In order to update the bank information of a client already included in the Credit List, it is necessary to contact the Customer Service Center by e-mail atendimento@ixincorporadora.com.br and submit the following documents: (i) Individual Clients: photo identification document and utility bill with current address information and (ii) Corporate Clients: Corporate Taxpayers’ ID card and articles of association. Bank information and documents sent must always be those of the listed creditor.

Click here to access the Judicial Reorganization documents

Last Update on April 19,2024

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