Brazil - Attachment of Assets
Jose Orlando A. Arrochela Lobo and Ana Paula Hubinger Araujo, Lefosse Advogados, in cooperation with Linklaters
Originally from Attachment of Assets
1. What is the general nature and effect of judicial measures available for plaintiffs to obtain provisional relief affecting property of debtors to obtain security for judgments to be obtained (“attachments”)? Freezing property in place? Placing it in the custody of a third party, such as a court official, sheriff or marshall?
Brazilian law provides for specific lawsuits with the purpose of preventing dispersion of debtor’s assets and securing satisfaction of a judgment yet to be rendered. These lawsuits aim at assuring the result of another lawsuit and they are provisional in nature, since the final judgment of the main lawsuit replaces the provisional relief granted in the request for injunction. They may be preparatory, where they are brought before the main lawsuit, or incidental, where they are brought in the course of the main lawsuit.
Basically they consist of requests for injunction, aiming at either the attachment or sequestration of assets, with the judicial seizure and deposit of the assets. Whilst the attachment is generally directed to all assets owned by the debtor in order to assure the effectiveness of the future attachment when, eventually a foreclosure lawsuit is initiated; sequestration assures the enforcement of a judgment for the delivery of a specific thing. It consists of the seizure of a specific asset, pending some further suit affecting such asset, with the scope of preserving its integrity, protecting it from damage, depreciation or deterioration, allowing the delivery of it in good conditions to the prevailing party.
The court will appoint a trustee of the attached assets. Typically, the debtor himself is appointed as trustee. If the plaintiff does not agree with the appointment of the debtor as trustee, the amounts in cash, precious stones, metals or bonds will be deposited in an official bank or in any credit entity designated by the court; furniture and urban properties will be deposited with a judicial trustee and the other assets with a private trustee. Assets which have been subject to sequestration may be deposited either with a person appointed upon agreement between the plaintiff and the defendant or with one of the parties, provided that a security or pledge is offered.