Possibility of redirecting enforcement against the successor company without triggering a piercing of the corporate veil

In a decision rendered in Special Appeal No. 2,230,998/SP, the Superior Court of Justice (STJ) reaffirmed that the enforcement or execution of a judgment may be redirected to the debtor’s successor company without the need to file a motion to pierce the corporate veil.

The STJ’s Ruling in REsp No. 2.230.998/SP: Distinction Between Business Succession and Piercing the Corporate Veil

The STJ’s interpretation stems from the distinction between the legal concepts of piercing the corporate veil (DPJ) and business succession. Piercing the corporate veil presupposes abuse by the company, characterized by a misuse of purpose or commingling of assets, pursuant to Article 50 of the Civil Code. Business succession, in turn, occurs when a company becomes liable for the activity previously carried out by another, due, for example, to the transfer of the business, a corporate transaction, or the continuity of economic activity.

The STJ emphasized that the recognition of business succession does not necessarily depend on the existence of formal proof of the transfer of assets, rights, and obligations. This conclusion may arise from the totality of circumstances in the specific case, such as the continuity of economic activity, operations at the same address, the identity or similarity of the corporate purpose, the use of the same operational structure, workforce, machinery, and equipment, or the retention of the previous company’s customer base.

That is, corporate reorganizations that, although formally distinct, result in the continuity of economic activity under another legal entity may justify the recognition of succession and the consequent redirection of collection efforts.

Thus, when the existence of a business succession is raised, it is up to the Judiciary to determine whether the elements justifying the company’s liability are present, without the need to initiate proceedings to pierce the corporate veil.

Practical Implications of the Decision

In practice, this interpretation by the STJ facilitates the actions of creditors who, depending on the situation and circumstances of the specific case, may request that the successor company be named as a defendant, thereby avoiding the need to initiate separate proceedings for the DPJ. For companies involved in acquisitions, corporate reorganizations, and business transfers, the decision also reinforces the importance of properly structuring and documenting such transactions, particularly given the risk of liability for prior obligations.

In disputes of this nature, an analysis of the specific circumstances of the transaction is decisive in determining whether a business succession has occurred.

For more information on this topic, please refer to the Strategic Civil Litigation practice at Araújo e Policastro Advogados.

Authors:

Roberta Novaes Marcondes– rmarcondes@araujopolicastro.com.br

Eduardo Filipe Adua – eadua@araujopolicastro.com.br