São Paulo Law School discusses impact of financial crisis on Brazilian companies

27/02/2014[Atualizado em: 17/04/2017 - 08:59]

Érica Gorga - Professor of Business Law of São Paulo Law School and Director and Associate Researcher of the Centre for Corporate Law at Yale Law School (the John R. Raben / Sullivan & Cromwell Executive Director for the Yale Law School Center for the Study of Corporate Law) - gave a lecture on the cases of billionaire losses of Sadia and Aracruz Celulose on currency derivatives during the financial crisis at the Law School of Yale University on February 12.

The different responses offered by the American and Brazilian judiciary to the investors who were harmed by the losses of the companies affected by the abrupt change of currency derivatives linked to the dollar led to the formulation of the paper "The Impact of the Financial Crisis on Non-Financial Firms - The Case of Brazilian Corporations and Lessons for the Private Enforcement Debate".

In Érica's view, the striking difference is that millionaire investors received financial compensation in both cases in the United States, whereas in Brazil there was no compensation for the losses of shareholders. "The issue of the Judiciary's transparency in the disclosure of the United States is paramount. While there are portals and websites where all shareholders may check the progress of the cases, in Brazil legal proceedings occurred in judicial secrecy. In Brazil, unlike the United States, models of financial measurement that can determine the 'fair value' with regard to compensation for fraud in the capital market are not used," said the professor.  Érica Gorga also pointed out the technical problems and the lack of shares of the class of shareholders in Brazil.

On March 7, the professor will present the paper "Corporate Control & Governance after a Decade from the "Novo Mercado": Changes in Ownership Structures and Shareholder Power in Brazil” at the National University of Singapore, in a Congress about the Power of Shareholders held in partnership with Vanderbilt Law School in the United States.

The Congress will be attended by experts from Germany, Australia, Belgium, South Korea, Italy, England, Switzerland, China, Japan, Denmark and the United States.  At the event, Érica Gorga will discuss the evolution of stock ownership and the rights of minority shareholders in the Brazilian market.

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