The 1st Chamber of Business Law of the São Paulo State Court of Justice (TJSP) has ruled that the mere fact that a company is dissolved while undergoing debt enforcement proceedings does not automatically constitute fraud or an attempt to avoid debt payment.

The case involved a cosmetics company convicted of trademark infringement. After the conviction, the enforcement phase began, during which the defendant company was required to pay the amounts determined by the court.

During this phase, the debtor company was formally dissolved. Creditors grew suspicious of the dissolution and filed a separate lawsuit, accusing the shareholders of shutting down the company to evade payment. They requested that the court consider the dissolution irregular and impose a fine for “acts offensive to the dignity of justice,” alleging that the debtors were attempting to obstruct the enforcement process.

However, appellate judge Eduardo Azuma Nishi found no evidence that the company acted in bad faith. According to him, the shareholders submitted documents and provided all clarifications requested by the judge, demonstrating cooperation with the proceedings. The judge emphasized that dissolving a company, in itself, does not indicate an intent to defraud enforcement — especially in the absence of signs of asset concealment, disobedience to court orders, or other conduct suggesting an attempt to harm the creditor.

Thus, the court concluded that there was no abusive behavior and upheld the lower court’s decision, rejecting the creditors’ claims.

This ruling reinforces that the dissolution of a company during legal proceedings must be assessed with caution: it will only be considered irregular if there is concrete evidence of fraud — not merely because the company was closed during the process.

Read the full article:
https://www.conjur.com.br/2025-nov-23/dissolucao-de-empresa-em-execucao-por-si-so-nao-e-fraude-decide-tj-sp/