By Brazil Stock Guide – BTG Pactual (BPAC11) is fighting in court to access part of a R$3 billion (US$580 million) balance still frozen in the bankruptcy estate of Varig, the once-dominant Brazilian airline, InvestNews reported. The amount is what remains from a R$4.7 billion (US$910 million) government compensation payment made in July 2025.
BTG entered the dispute after purchasing R$141 million (US$27 million) in Varig’s receivables — originally held by a Banco do Brasil subsidiary — through its FIDC Precatórios Brasil fund.
The main opponent is Aerus, the pension fund for Varig’s former employees, which argues the funds should first cover unpaid retirement benefits. The Rio de Janeiro State Court initially authorized distribution among secured creditors, including BTG and Aerus, but Brazil’s Attorney General’s Office (PGFN) appealed, claiming the money should first offset Varig’s outstanding tax debts.
Behind the scenes, BTG accuses the government of creating a “judicial moratorium,” delaying payments that should have been released under Brazil’s bankruptcy law. According to InvestNews, the outcome could set a precedent for the country’s fast-growing judicial credit market, where banks and investors buy court-ordered receivables at a discount.
If successful, BTG could turn its R$141 million investment into a multibillion-real windfall, consolidating its dominance in a lucrative niche that blends legal risk with financial engineering. A defeat, however, could limit banks’ ambitions in Brazil’s booming market for court claims and precatórios.
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