By Brazil Stock Guide — Casas Bahia (B3: BHIA3) did not make it through the first day after laying bare the depth of its financial crisis without seeking court protection. At 11:32 p.m. on Sunday, less than 24 hours after releasing financial statements that already flagged the possibility of a judicial restructuring, the Brazilian retailer said it had filed for recuperação judicial, Brazil’s court-supervised restructuring process.
In the hours between the two announcements, events moved quickly. Two members of the Board of Directors resigned and left a meeting convened for 4 p.m. The company’s chief legal and tax officer also stepped down. The five remaining directors then approved the bankruptcy-protection filing on an urgent basis and authorized management to seek measures to preserve key contracts, release assets and prevent creditors from enforcing guarantees.
What had appeared in the financial statements early Sunday as a possibility had become the company’s chosen course of action before the day was over.
Casas Bahia had released its second-quarter results at around 2 a.m. on Sunday, after the expected deadline. As Brazil Stock Guide reported at the time, the retailer posted a R$10.1 billion net loss, while auditor EY declined to express a conclusion on the interim financial statements because of material uncertainty related to the company’s ability to continue as a going concern.
The company had also acknowledged that it might need to resort to formal mechanisms to restructure its liabilities. Within hours, that possibility was no longer theoretical.
A Sunday of crisis
Minutes from the extraordinary Board of Directors meeting provide a glimpse into what unfolded behind the scenes.
At 4 p.m., all seven directors were present. Representatives from Alvarez & Marsal and law firm Thomaz Bastos, Waisberg, Kurzweil Advogados also attended the meeting and answered questions from board members in their respective areas.
The agenda brought together a significant reshuffling at the top of the company and the most consequential decision in Casas Bahia’s recent history: accepting the resignations of two directors, accepting the departure of the company’s chief legal and tax officer, appointing his successor and authorizing an urgent filing for judicial restructuring.
Jackson Schneider, a former president of Brazilian automakers’ association Anfavea who currently serves on the boards of CBMM and Abra, the controlling shareholder of Gol, and Rogério Calderón, a board member at Nubank and Alupar, submitted their resignations from Casas Bahia’s board.
After their resignations were formally recorded, both men left the meeting.
The five remaining directors then proceeded with the other items on the agenda — including the decision to seek court protection.
Documents released by Casas Bahia do not link the resignations to the decision to file for judicial restructuring. The sequence of events, however, shows a significant governance reshuffle taking place at the same time the retailer decided to put its financial restructuring under court protection.
At the same meeting, Fábio Eduardo de Pieri Spina, a former executive at Anheuser-Busch InBev, Suzano and Vale, resigned as chief legal and tax officer, effective Monday, August 17.
Spina had been with Casas Bahia since 2024 and, according to the company, had overseen significant internal restructuring initiatives within the legal department. He will remain as an adviser.
Sírley Lima, formerly with Heineken’s legal department, was appointed to replace Spina and will oversee an expanded structure encompassing Legal, Tax, Compliance and Internal Controls.
A R$7.8 billion working-capital hole
The numbers released just hours earlier help explain the urgency.
As of June 30, Casas Bahia had negative consolidated working capital of R$7.84 billion, compared with R$7.42 billion at the end of 2025. At the parent-company level, the deficit widened to R$11.97 billion from R$10.76 billion.
EY’s report painted an even more troubling picture.
Casas Bahia accumulated a R$11.18 billion loss in the first half and had negative shareholders’ equity of R$8.27 billion. The auditor pointed to conditions that could raise substantial doubt about the company’s ability to continue as a going concern.
Consolidated short- and long-term loans and financing stood at R$7.03 billion in June, up from R$6.30 billion at the end of December.
But the central problem was liquidity.
EY highlighted Casas Bahia’s need to generate future cash flows to meet upcoming financial and operating obligations, settle overdue operating liabilities and maintain enough working capital to keep the business stable. The company’s ability to meet obligations as they came due depended on the successful implementation of financial and operational measures already under way.
That presented a much more fragile picture than some of the headline metrics management emphasized in its earnings presentation.
The company highlighted R$2.9 billion of liquidity, including receivables, R$800 million of free cash flow in the quarter and leverage of 0.5 times.
The problem was not simply the amount of debt on the balance sheet. It was the company’s ability to finance the working capital required to keep a retailer of Casas Bahia’s scale running.
The new money never arrived
Casas Bahia has been trying to overhaul its financial structure since 2023. It renegotiated obligations, converted debt, extended maturities, sold assets and reduced the amount of capital tied up in the business.
After completing part of that restructuring, the next step was to secure cheaper and longer-term funding for working capital. The strategy called for gradually replacing expensive financing with new sources of capital carrying costs and maturities more compatible with operating cash generation.
That is where the plan began to break down.
Credit limits provided by insurers to Casas Bahia’s suppliers failed to increase as much as the company had expected. An international fundraising transaction reached an advanced stage, with an anchor investor secured and bookbuilding structured, but ultimately failed to close under the originally expected terms and timetable.
The company acknowledged that its access to fresh capital had become more constrained.
That restriction forced Casas Bahia to reduce inventory purchases and accelerate the downsizing of its operations. The logic was straightforward but painful: buying less inventory meant requiring less capital, but it also meant operating a smaller company.
In the material fact released at 11:32 p.m. on Sunday, Casas Bahia acknowledged the outcome: the liquidity alternatives it had been pursuing failed to materialize.
The company also cited high interest rates, tighter credit conditions, higher financing costs and pressure on consumer spending and working capital.
The solution was no longer purely financial. It had become judicial.
Protecting contracts, assets and guarantees
The board minutes show that management’s concerns extended beyond simply pushing out debt maturities.
Directors authorized the company to seek urgent court measures to preserve contracts deemed essential, obtain the release of assets and prevent the enforcement of guarantees, as well as other judicial, extrajudicial or administrative measures considered necessary for the restructuring.
The filing was submitted to the Bankruptcy and Judicial Reorganization Court in São Paulo and includes Grupo Casas Bahia as well as subsidiaries including Cnova Comércio Eletrônico, Casas Bahia Tecnologia, furniture manufacturer Bartira and logistics companies.
Casas Bahia said it intends to keep operating across all of its sales channels without material disruptions.
The strategy is to concentrate the business on more profitable, higher-margin operations while using court protection to reprofile and extend its financial and operating liabilities.
The decision will still need to be ratified by shareholders at an Extraordinary General Meeting. At the same meeting, the company plans to formally reduce the size of its Board of Directors from seven members to five, effectively maintaining the smaller board following the two resignations.
From out-of-court restructuring to court protection
This is not Casas Bahia’s first use of Brazil’s corporate restructuring framework.
In April 2024, the retailer sought court approval for an out-of-court restructuring, or recuperação extrajudicial, covering about R$4.07 billion of unsecured financial debt. The plan had already been signed by two banks representing 54.53% of the affected liabilities and was approved by a São Paulo bankruptcy court in June of that year.
The difference this time is significant.
The 2024 restructuring was built around an agreement negotiated in advance with financial creditors. Two years later, Casas Bahia is resorting to a full court-supervised judicial restructuring after fresh liquidity failed to materialize and its auditor raised substantial doubt about its ability to continue as a going concern.
The sequence illustrates how the restructuring lost momentum.
In 2024, Casas Bahia sought to address roughly R$4.1 billion of financial liabilities through an out-of-court agreement. By 2026, after closing stores, selling assets, renegotiating debt and trying to raise fresh capital, it was back in court — this time seeking broader protection.
Casas Bahia spent months trying to buy time, shrink the business, reduce its capital needs and rebuild confidence among suppliers, banks, insurers and investors.
On Sunday, it ran out of time.
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