Last week, we came across two other judicial reorganization requests from well-known companies, Dolly and Eternit. We will not delve into the importance of the difficulties encountered by these two traditional companies, which culminated with judicial reorganization requests, we will rather address the concept of protection.
One of the most vulnerable assets of a company is its Accounts Receivable, where increases and reductions related to the sale of products or services are recorded. It can and should be protected against such surprises under a Credit Insurance Program.
From these two cases (and innumerable others that will come up), and the Brazilian scenario, which remains fragile, we perceive that it will take years to pay the creditors, in addition to the possibility of debt discounts.
This is a reality that we strongly experience in Brazil, and undoubtedly a company without a consistent reorganization plan will need years to recover, and also the understanding of its creditors.
If companies receive orders, manufacture and deliver products, the minimum that can be expected is that they be paid by the agreed date. However, this is not the day-to-day reality. Companies need instruments to minimize the non-payment risk, and in Brazil, we can rely on the protection provided by Credit Insurance.
In these two instances of judicial reorganization of last week, provided the companies count on the protection of a Credit Insurance policy they will receive their credits within a maximum of 30 days after submission of their list of creditors. And it will be the insurer that will have to wait years to receive payment.
Therefore, in addition to the innumerable advantages provided by a Credit Insurance Program, it is essential to have the peace of mind of knowing that the company’s Accounts Receivable are protected against eventual unexpected default and judicial reorganization.
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