By Brazil Stock Guide – Azul (B3: AZUL3; NYSE: AZUL) has asked a U.S. bankruptcy court to block a R$ 10.6 million ($2 million) collection action in Brazil, arguing the underlying debt was discharged under its Chapter 11 restructuring before the claim changed hands.
The dispute involves three guarantee contracts signed with Banco Daycoval in 2023, totaling about $ 2.05 million. Daycoval later transferred the claims to Determinação Organização, Apoio e Treinamento Ltda.
Determinação filed an enforcement action against Azul and Azul Linhas Aéreas on August 5 before São Paulo’s 29th Civil Court. It is seeking R$ 10.62 million, according to the U.S. court filing.
André Moraes Marques, a Pinheiro Neto partner advising Azul on Brazilian law, said the U.S. order was necessary for the airline to defend itself in the Brazilian proceeding. The case tests whether a claim Azul says was extinguished in its U.S. restructuring can still be pursued through Brazilian courts.
Daycoval did not file claim
Azul filed for Chapter 11 protection in the United States on May 28, 2025. Its restructuring plan became effective on February 20, 2026. Daycoval was listed as a creditor of Azul Linhas Aéreas Brasileiras with three unliquidated claims. According to Azul, the bank received notices about the bankruptcy proceedings and the deadline for filing claims in both Portuguese and English.
Daycoval did not file a proof of claim, object to the restructuring plan or appear in the Chapter 11 proceedings, Azul said. The airline argues that the claims were therefore disallowed and discharged under the restructuring plan, preventing Daycoval from pursuing payment.
On March 30, after the plan had taken effect, Daycoval assigned the claims to Determinação. Azul was notified of the transfer on April 27. Determinação acknowledges the Chapter 11 proceedings but argues that the U.S. restructuring plan does not produce legal effects in Brazil, according to Azul’s filing. That position allowed the company to seek payment through the São Paulo court.
Azul seeks to enforce U.S. order in Brazil
Azul is asking U.S. Bankruptcy Judge Sean H. Lane to confirm that Daycoval and Determinação are bound by the restructuring plan. It also wants the court to declare that the claims were discharged and prohibit Determinação from continuing the Brazilian enforcement action.
A U.S. ruling would not, by itself, automatically end the case in Brazil. Azul said it could seek recognition of the U.S. order before Brazil’s Superior Court of Justice, or STJ, request direct cooperation between the courts or seek formal recognition of the Chapter 11 proceedings under Brazilian insolvency law.
Brazilian legislation allows courts to cooperate directly with foreign judges in cross-border insolvency cases, according to the filing.
Azul has also asked Lane to make the U.S. court available for direct communication with the Brazilian judge if necessary. The court has not yet ruled on Azul’s request. Objections are due on August 21, and a hearing is scheduled for September 8. A decision in Azul’s favor would strengthen its ability to prevent claims discharged in Chapter 11 from being pursued separately in Brazil.
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