By Brazil Stock Guide – Judge Fernanda Perez Jacomini of São Paulo’s 3rd Business Restructuring and Bankruptcy Court has restricted for 90 days the ability of health plan operators to remove Oncoclínicas (B3: ONCO3) facilities from their provider networks, terminate contracts or change commercial terms.
The relief was granted as part of an extrajudicial reorganization proceeding through which the oncology group is seeking to restructure approximately R$ 5 billion in unsecured debt, as well as obligations among companies within the group.
The injunction also bars operators from suspending services, blocking appointment schedules, restricting patient referrals or wrongfully withholding payments when those measures are related, in whole or in part, to the restructuring filing or the claims covered by the plan.
The ruling cites the need to protect ongoing cancer treatments and notes that health plan operators account for 98% of the group’s revenue. The protection has nevertheless drawn criticism within Brazil’s private healthcare industry for preemptively interfering with commercial relationships.
“An extrajudicial reorganization cannot be used as a tool to create a form of contractual immunity,” an industry source said on condition of anonymity. “By preemptively restricting health plan operators’ contractual rights, the ruling gives the company protection that is not expressly provided under Law No. 11,101/2005.”
Law No. 11,101, commonly known as Brazil’s Bankruptcy and Corporate Reorganization Law, also governs extrajudicial restructurings. It provides for a stay on the collection of claims covered by a restructuring plan but does not expressly require health plan operators to maintain provider credentials, referral flows or commercial terms.
Health Plan Operators Also Listed as Creditors
The criticism is particularly relevant because Amil, Unimed Recife, Unimed Salto/Itu and Central Unimed do Rio Grande do Sul appear on the creditor list submitted by Oncoclínicas.
The same ruling imposed a 180-day stay on lawsuits, enforcement proceedings and asset-seizure measures involving claims subject to the restructuring. It also barred those claims from being set off, except in circumstances expressly permitted by law.
In practice, a health plan operator that is also a creditor may still be required to pay current Oncoclínicas invoices while being prevented from enforcing or setting off its own claim against the group.
The order preserves the oncology network’s incoming cash flow but may shift part of the restructuring burden to companies that played no role in the decisions that led to its financial crisis.
The wording of the injunction adds to those concerns. It applies to measures based “in whole or in part” on the extrajudicial reorganization, potentially opening disputes over the actual reasons behind provider-network removals or commercial changes made during the period.
Protection Granted Before a Final Plan
The restrictions on health plan operators were imposed before Oncoclínicas presented a final restructuring plan. Jacomini described the document submitted by the company as “admittedly incomplete” and merely an outline to be developed through negotiations.
The updated creditor list shows R$ 5.004 billion in covered third-party claims and another R$ 3.111 billion in intercompany obligations. The combined amount, including intercompany claims, totals R$ 8.115 billion.
Four creditors have so far signed on to the plan, representing R$ 1.907 billion, or 38% of covered third-party claims. That exceeds the one-third threshold required to begin the process, but Oncoclínicas must secure support from creditors representing more than half of the covered claims within the statutory 90-day period.
OPEA Securitizadora accounts for R$ 1.683 billion, equivalent to 88% of the support obtained and 33.6% of all covered claims.
OPEA is the successor to True Securitizadora and is listed as the formal holder of Oncoclínicas debentures that back Brazilian real estate receivables certificates, known as CRIs, held by about 25,000 investors. The ultimate economic exposure rests with the certificate holders, rather than solely with the securitization company.
A fund challenged the validity of OPEA’s consent, arguing that the securitization company should first have consulted investors at a holders’ meeting. OPEA said its initial signature was a credit-preservation measure and did not, at this stage, change principal, interest or maturity terms. Any subsequent changes to the economic terms would require approval from CRI holders.
The public prosecutor’s office and Jacomini accepted OPEA’s consent at this preliminary stage. Without the claim represented by OPEA, however, support for the restructuring plan would amount to approximately 4.5%, well below the minimum threshold.
Injunction Is Not Absolute
Jacomini imposed limits on the protection granted to Oncoclínicas. The restrictions apply for 90 days and do not prevent decisions based on failures in patient care, regulatory breaches or other reasons unrelated to the restructuring.
The judge also rejected the company’s request for protection from the contractual consequences of failing to pay obligations outside the restructuring terms. The proceeding, she wrote, “cannot be used as a mechanism to avoid paying for services rendered.”
The dispute with Porto Seguro illustrates that distinction. The health plan operator told the court that its investment agreement with Oncoclínicas had already been terminated on May 21, before the restructuring filing, because of an alleged serious breach of service-level requirements.
Porto said the breach involved what it described as Oncoclínicas’ acknowledged inability to treat cancer patients. Jacomini did not reinstate the agreement and barred only terminations motivated exclusively by the restructuring filing.
In the case of Unimed Recife, the court preserved earlier rulings issued by a court in Pernambuco. It also rejected Oncoclínicas’ request to require individual explanations for every patient redirection, use of Unimed’s own facilities or direct purchase of medicines.
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