Brazil Stock Guide — A Rio de Janeiro appeals court on Tuesday upheld the bankruptcy of Brazilian telecom company Oi SA (B3: OIBR3, OIBR4), rejecting appeals filed by Itaú Unibanco (B3: ITUB4; NYSE: ITUB) and Bradesco (B3: BBDC4; NYSE: BBD).
The ruling by the Rio de Janeiro Court of Justice’s 1st Chamber of Private Law largely preserved a November 2025 decision that converted Oi’s court-supervised restructuring into bankruptcy.
The bankruptcy covers Oi and its subsidiaries Portugal Telecom International Finance and Oi Brasil Holdings. The group will be allowed to continue operating temporarily to prevent the disruption of essential services while court-appointed administrators oversee asset sales and payments to creditors.
Itaú and Bradesco, both creditors of Oi, had argued that the company should remain under court-supervised restructuring. The banks said a premature liquidation could reduce creditor recoveries and disrupt services still provided by the telecom group.
The court, however, upheld the conclusion that Oi was no longer able to comply with its restructuring plan. The company had faced payment delays, difficulties funding its operations and setbacks in completing planned asset sales.
The judges appointed Adriano Pinto Machado, Sérgio Zveiter and Preserva-Ação Administração Judicial to oversee the bankruptcy proceedings, including the temporary continuation of operations and the liquidation of the group’s remaining assets.
The decision effectively ends Oi’s second attempt to restructure under bankruptcy protection. The company filed its first restructuring case in 2016 and emerged from the proceedings in 2022, only to return to court less than a year later with approximately R$44 billion ($8 billion) in debt.
The bankruptcy does not mean Oi’s remaining services will be shut down immediately. Operations will continue on a temporary and controlled basis while the court determines which assets can be sold and how the proceeds will be distributed among creditors.
For shareholders, the ruling leaves virtually no prospect of recovering value. Equity holders rank behind creditors under Brazil’s statutory payment hierarchy and would receive proceeds only if funds remained after all creditor claims had been paid.
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