Experts in the international securities and financial markets once again made the effective juridical acknowledgement of ELETROBRÁS as a private company that can not claim for itself the condition of State privileges so as not to pay international debts.

For years ELETROBRAS has been supporting the weak argument that it has the prerogative of special Courts and special Court procedures for being a State controlled company and for being at the service of the government. In an attempt to perpetrate its various unpaid debts to thousands of Brazilian citizens and citizens of other countries this private company uses inappropriate arguments, full of sophistry that violates the truth of facts.

EDISON SIQUEIRA DE FREITAS ASSOCIATES LAWYERS has insistently fought against this fraud and other forms of institutional frauds that arbitrarily harm the patrimony of individuals and companies, and denigrate the image of markets and companies based in Brazil.

Once again, EDISON DE FREITAS SIQUEIRA ASSOCIATED LAWYERS promotes a favorable decision in which the attachment of the debentures issued by ELETROBRÁS is accepted and acknowledged as possible. This court sentence is based precisely on the fact that ELETROBRÁS is a company ruled by the Act of Corporations, a bill in the Brazilian Law for private companies that trade their shares in the Brazilian and foreign stock exchanges.

(court decision summary)

1st SECTION OF THE SUPERIOR COURT OF JUSTICE CONFIRMS DECISION OF THE 1ST COLEGIATE TO ADMIT THE POSSIBILITY OF THE ATTACHMENT FOR THE DEBENTURES ISSUED BY ELETROBRÁS.

The 1st Section of the Superior Court of Justice (in Brazil), Received from the law firm Édison Freitas de Siqueira Associated Lawyers the ARGUMENTS and acknowledged the possibility of attachment for the debentures rejected by Eletrobrás embargoes filed by the National Revenue Department, against the decision of the 1st Class Court which accepted the appeal brought by Maquimóvel Special Machinery and Industrial Equipment Ltda to procede with the attachment of debentures issued by Eletrobrás.

In the trial of Special Appeals in the 1st Class of the Superior Court of Justice ruled that the debentures can be attached because when these titles are listed on the stock exchange and according to the item. 655, IV of the Civil Process Code (CPC) and item 11, II of the bill number 6830/80, when there isno stock exchange listing there happens a special ruling according to the item. 11, VIII of the bill 6830/80 and item 655, X of the CPC.

It is important to emphasize that the National Revenue Department’s embargo tried to demonstrate a supposed difference between Eletrobrás’ bearer bonds and the debentures issued by the same company. However, as it is well known, despite of the different names, the debentures and bearer bonds issued by Eletrobrás are the same kind of bond and both are listed at the stock exchange having liquidity and usability as guarantee for tax debts.

In the ruling, Thi High Court Judge Mr Mauro Marques Campbell, confirms the arguments made by the law firm Édison Freitas de Siqueira Adv Ass to understand that:

“The debentures gives the holder a right of credit (Act 6404 of 15.12.1976, item. 52), which is added collateral on a property and / or floating ensuring security privilege generally on all assets of the debtor ( art.58). It is also suitable for securities traded in stock exchanges or in the OTC market, under the law specifies (Law 6385 of 07.12.1976, art, 2 º).”

The National Revenue Department presented Embargoes of divergence claiming disagreement and filed charges in the 2nd Class of the High Court in the sense that it is not possible the attachment of Eletrobrás debentures, because they would be of difficult and doubtful liquidity.

In citing the ruling embargo, the Minister Rapporteur defined the controversy as:

“... the examination of the attachment or not of debentures with stock exchange listing. On the nature of debentures and an enforceable court (CPC, art. 585, I)”

The ruling above – this excerpt is its most important part - making effective A REALITY THAT ELETROBRÁS - for being a PRIVATE COMPANY - CAN NOT betake Prerogatives OF STATE OR of an PUBLIC department FOR delaying the payment of an INTERNATIONAL debt.

The author of such important claim is Prof. Dr. Édison Freitas de Siqueira, Brazilian lawyer working in the courts of Brazil and the USA. Mr. Edison, as publicly acknowledged, supports the interests of customers in amounts exceeding 10 billion dollars, involving more than 30,000 lawsuits in process. His work has already been requested and used by staff of the SEC, the PCAOB and even the FBI, in investigations and proceedings relating to Brazilian companies the trade of shares and ADRs on the stock exchanges of New York and Madrid, or that simply operate in North American financial market, as investors, financiers, operators of tag along, or because they are bearers of securities traded in markets under the jurisdiction of these bodies.

For better understanding of the terms of the ruling partially transcribed above, follows the brillant commnent of the Mr. Néri José da Silveira, retired minister of the Superior Court of Justice (STF).

*Dr. Édison Freitas de Siqueira is an internationally renowned tax lawyer and Serbia Consul in Brazil.

Related links:

World Bank's ROSC - Reporte on the Observance of Standards and Codes

Comment of the retired High Court Judge and Minister of the Superior Court of Justice, Mr. José Néri da Silveira fornecido, forwarded by Mr. Amaury Palma

Superior Court of Justice (STJ) decision that admints the possibility of attachment for the debentures used by ELETROBRAS.

Portuguese version of the article above/versão em português do artigo acima.