Court Blocks Power Cuts to Habib's Amid R$ 265 Million Debt Restructuring

The court-backed protection shields the fast-food network from utility disconnections tied to legacy debts accumulated up to August 24, giving the company a brief operational buffer to restructure its finances while safeguarding perishable food inventories against total loss. Habib's Operator Secures Court Protection From Cerpro Power Cuts The immediate clash between Grupo Gennius and utility provider Cerpro erupted when the energy company moved to disconnect power over unpaid utility bills. According to court filings, the restaurant operator petitioned the judiciary to intervene, arguing that cutting off electricity would inflict catastrophic damage on its commercial kitchens and jeopardize its entire corporate restructuring process. Management emphasized that the chain's inventory relies heavily on cold chain storage for perishable food items that would face total loss if refrigeration failed. The court accepted this argument, ruling that Cerpro could not disconnect power for debts incurred prior to the August 24 filing date. However, the dispute exposes the friction between utility providers and firms navigating bankruptcy protection in Brazil. Responding to inquiries about the ruling, Cerpro noted through its representatives that its legal team was still evaluating the verdict and opted against providing an official statement. In a message sent to Grupo Gennius leadership, Cerpro argued that its billing statements targeted obligations amassed after the court-supervised restructuring request had been filed, contending those specific costs fell outside the scope of the freeze. Macroeconomic Pressures and Delivery Apps Drive R$ 265.2 Million Restructuring The financial strain forcing Grupo Gennius into judicial reorganization—known locally as recuperação judicial—stems from a combination of macroeconomic shifts and changing consumer habits. Following the pandemic, the rapid expansion of app-based delivery services further reduced in-restaurant dining, tightening operational margins for physical outlets. Concurrently, persistent upward shifts in Brazil's baseline Selic interest rate drove up the expenses associated with servicing loans originally taken out to support day-to-day business functions. The court accepted the processing of the petition and appointed KPMG Corporate Finance as the judicial administrator. Pursuant to the legal regulations governing the procedure, the tribunal put a temporary halt on all debt collection efforts and creditor lawsuits directed at the business, while setting a rigid schedule for management to outline its path forward. Brazilian bankruptcy law provides a mechanism for struggling businesses to halt creditor demands while working out a viable repayment strategy. Should the business miss the mandated deadline to present its plan, or if creditors vote to turn it down, the magistrate has the authority to cancel the restructuring process and declare bankruptcy. KPMG Oversees Creditor Negotiations and 60-Day Restructuring Timeline As the administrative phase of the turnaround advances, attention shifts primarily toward drafting and negotiating the timeline for clearing liabilities. KPMG Corporate Finance acts in the capacity of judicial administrator, managing the audit of creditor claims and ensuring adherence to the reporting standards ordered by the court. The weeks ahead remain critical for franchise owners, staff members, and vendors as executives juggle keeping locations open with hashing out agreements across all financial liabilities. The ban on utility disconnections offers a short-term breathing room that allows restaurant kitchens to preserve perishable goods and serve patrons while financial consultants negotiate with lenders. Grupo Gennius is required to deliver its finalized turnaround strategy within the mandatory 60-day period so it can be put before the general meeting of creditors. Further developments will depend on court filings and upcoming assembly votes regarding the proposed debt settlement terms. Habib's entra em recuperação judicial com dívida de R$ 265,2 milhões Related