Odebrecht v. Graal Participações

Pinheiro Guimarães, Druso Advogados, Mange Advogados, E. Munhoz Advogados, L. Telles Sociedade de Advogados, and Barbosa, Mussnich & Aragão Advogados advised on the case.

The dispute initiated when Marcelo Odebrecht (then CEO of Group Odebrecht and representative of Kieppe Participações S.A., the holding company of the Odebrecht family that held the control of the group) unilaterally decided for the removal of Bernardo Gradin and Miguel Gradin from executive positions in the conglomerate and Kieppe Participações exercised a call option requiring Graal Participações S.A. (the holding company of the Gradin family) to transfer to Kieppe all of its interest in Group Odebrecht, corresponding to more than 20% of its total capital stock.

Graal Participações opposed the exercise of the call option and the associated purchase price and filed a claim arguing that the matter should be decided through an arbitration procedure pursuant to the shareholders’ agreement among the parties, which included an arbitration clause that was not recognized by Kieppe.

After lengthy judicial discussions, the Brazilian Superior Court of Justice (Superior Tribunal de Justiça) finally decided for the validity of the arbitration clause and determined that the matter should be decided through arbitration. The favorable decision obtained by Graal Participações is considered a leading case in Brazil and put an end to an intricate dispute involving several courts in Bahia and Brasília.

In 2019, the merits of the dispute had not been finally resolved when Group Odebrecht filed the largest judicial restructuring to date in Brazil seeking protection in order to negotiate a debt restructuring plan with its creditors, which involved more than R$100 billion in outstanding debts.

In the context of the judicial restructuring (which ended up being approved by creditors and the court), Graal Participações raised a number of claims and objections involving its credits and certain transactions carried out by Group Odebrecht since the beginning of the corporate dispute. According to Graal Participações, the total amount of its credits, which included unpaid dividends and the amount of its stake in Odebrecht, exceeded R$12 billion.

On September 24, Group Odebrecht and Graal Participações settled all their disputes for an undisclosed amount upon acknowledgement by Group Odebrecht of the existence of the credit and its inclusion in the overall debt restructured in the judicial restructuring proceeding. Details of the settlement will be informed to the court and Graal Participações will be paid in accordance with the conditions of the approved restructuring plan, which includes the sale of several assets by the group, such as the 38% equity stake held in Braskem S.A.

This landmark settlement will allow the involved companies to focus on their respective business, putting an end to a long and complex dispute that could also affect the agreement reached by Odebrecht with its creditors and the enforcement of the approved restructuring plan.

Pinheiro Guimarães acted as counsel to Graal Participações and the Gradin family with a team led by Eduardo Augusto Mattar (partner; Picture), Francisco José Pinheiro Guimarães (partner), Rodrigo Marcilio (partner), Jaili Cunha (partner), Bernardo Bulhões (partner), Renata Veloso (partner), Rodrigo Terassovich (associate), João Pedro Nascimbeni (associate), Fernanda Dias Almeida (associate), Renata Faraco Lemos (associate), Marina Vidal (associate), Henrique Rodrigues (associate) and João Victor Carvalho de Barros (associate).

Druso Advogados acted as counsel to Graal Participações and the Gradin Family with a team led by Caio Druso (partner), Pedro Castro and Maite Batinga.

Mange Advogados acted as counsel to Graal Participações with a team led by partner Eduardo Foz Mange (partner), Luciano Guimarães da Silveira, Walter Vieira Filho and Renato Luiz de Macedo Mange.

E. Munhoz Advogados acted as counsel to Group Odebrecht with a team led by Eduardo Secchi Munhoz (partner), Carolina Machado Letizio Vieira, Ana Elisa Laquimia de Souza, Carlos Manoel Holanda Costa and Danilo Domingues Guimarãe.

L. Telles Sociedade de Advogados acted as counsel to Kieppe Participações with a team led by Leonardo Telles, Pedro Teles and Caroline Sena.

Barbosa, Mussnich & Aragão Advogados acted as counsel do ODBINV S.A. with a team led by Luiz Antonio de Sampaio Campos (partner) and André de Albuquerque Cavalcanti Abbud, Gustavo Santos Kulesza and Luiza Romanó Pedroso.

Involved fees earner: André de Albuquerque Cavalcanti Abbud – Barbosa, Müssnich & Aragào; Luiz Antonio de Sampaio Campos – Barbosa, Müssnich & Aragào; Luiza Romanó Pedroso – Barbosa, Müssnich & Aragào; Gustavo Santos Kulesza – Barbosa, Müssnich & Aragào; Maite Batinga – Druso Advogados; Pedro Castro – Druso Advogados; Caio Druso – Druso Advogados; Danilo Domingues Guimarãe – E. Munhoz Advogados; Carlos Manoel Holanda Costa – E. Munhoz Advogados; Ana Elisa Laquimia – E. Munhoz Advogados; Carolina Machado Letizio Vieira – E. Munhoz Advogados; Eduardo Secchi Munhoz – E. Munhoz Advogados; Renato Luiz de Macedo Mange – Mange Advogados; Eduardo Foz Mange – Mange Advogados; Luciano Guimarães da Silveira – Mange Advogados; Walter Vieira Filho – Mange Advogados; Bernardo Bulhões – Pinheiro Guimarães; João Victor Carvalho de Barros – Pinheiro Guimarães; Marina Coelho Reverendo Vidal – Pinheiro Guimarães; Fernanda Dias de Almeida – Pinheiro Guimarães; Renata Faraco Lemos – Pinheiro Guimarães; Renata Machado Veloso – Pinheiro Guimarães; Rodrigo Marcilio – Pinheiro Guimarães; Eduardo Augusto Mattar – Pinheiro Guimarães; Francisco José Pinheiro Guimarães – Pinheiro Guimarães; Jaili Isabel Quinta Cunha – Pinheiro Guimarães; João Pedro Rodrigues Nascimbeni – Pinheiro Guimarães; Rodrigo Terassovich – Pinheiro Guimarães;

Law Firms: Barbosa, Müssnich & Aragào; Druso Advogados; E. Munhoz Advogados; Mange Advogados; Pinheiro Guimarães;

Clients: Graal Participações; Gradin family; ODBINV S.A.; Odebrecht;

Author: Ambrogio Visconti.