The modifications introduced by Law Nº 20.720 to the rule of article 1496 number 1 of the Civil Code and their operation in bankruptcy proceedings

Abstract

 In this study, we will examine the amendments introduced by Law 20.720 to the early termination rule outlined in article 1496 of the Civil Code. The goal is to understand the framework established by the legislator, both in the civil and insolvency realms, and clarify how this rule operates in each insolvency proceeding. Additionally, we will consider the modification introduced by Law 21.563, which modernizes the insolvency procedures outlined in the Law on the Reorganization and Liquidation of Companies and Individuals. This study is guided by a normative, dogmatic, and jurisprudential legal approach to establish positions regarding the necessity of insolvency as a prerequisite for bankruptcy proceedings and these, in turn, as requirements for early termination. When comparing cases, we aim to support the previous idea by confirming our working hypothesis: the immediate enforceability is determined by the impact on a bankruptcy proceeding, considered today equivalent to a situation of notorious insolvency.