How did Dolly come to file for bankruptcy? Understand the situation

The attorneys' offices of the state of São Paulo and the National Treasury filed, on Wednesday (1st), a joint request for the bankruptcy of the companies that make up the Dolly Group, responsible for the famous Brazilian brand of soft drinks.

The request was directed to the 2nd Bankruptcy and Judicial Recovery Court of São Paulo, which had been conducting the group's judicial recovery for almost eight years.

What happened to the company?
Started in 2018, the process was terminated, without conclusion, in May of this year. The company then began to consider an extrajudicial recovery, seeking an agreement with its creditors outside of court. However, Dolly was unable to meet the legal requirements to proceed with the new process.

The prosecutors maintain that the group used judicial recovery to gain time without effectively regularizing its tax debts, suspending tax foreclosures and preventing asset constriction measures.

The Union and the state of SP claim that all traditional collection attempts were frustrated.

The petition highlights that tax liabilities were presented as the main cause of the crisis, but were never effectively addressed.

The company's tax liabilities are valued at R$15.746 billion in active debt registrations.

According to the document sent by the prosecutor's offices, a large part of this amount is considered demandable and without sufficient guarantees.

The prosecutors describe accounting manipulations, corporate successions and patrimonial confusion between the group's companies, so the action points to the existence of an alleged scheme to:

CNN Money tries to contact the company and keeps the space open for positioning.

Source: CNN