This paper’s subject is the analysis of the conversion of debt to equity as a mechanism to promote the judicial reorganization of a company in economic and financial distress. At first, there isa brief introduction to address the shifts in the dynamic of power within the company right after the filing for judicial reorganization. Thereafter, the article examines the clauses inserted in judicial reorganization plans to fulfill the payment of creditors through the conversion of debt into securities issued by the company. The study of such clauses demands the verification of their validity according to the rules of Corporate Law, notably the right of preference, the im-pediment towards the unjustified dilution of shareholders and the setting of the value of a share capital increase.
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Mauricio Moreira Mendonça de Menezes
Rodrigo Saraiva Porto Garcia
