By Brazil Stock Guide – A Rio de Janeiro court has declared the bankruptcy of Oi S.A., once Brazil’s largest fixed-line carrier, marking the formal end of its second judicial recovery. The ruling, issued Monday (Nov. 10) by Judge Simone Gastesi Chevrand of the 7th Business Court, converts Oi’s restructuring into judicial liquidation but authorizes the provisional continuation of services under court-appointed administrator Preserva-Ação, led by Bruno Rezende.
A controlled collapse
The decision follows a report filed Friday (Nov. 7) by the court’s interventor describing Oi’s financial condition as “irreversibly unsustainable.” The ruling invokes Article 99, XI, of Brazil’s Bankruptcy Law (11.101/2005) to allow operations to continue temporarily while contracts are transferred or wound down. All lawsuits and debt collections against Oi are suspended, and creditors may convene an extraordinary general meeting to form a committee overseeing liquidation.
V.tal transfers frozen
In a key section, the judge ordered the blocking of Oi’s “restricted V.tal cash”—funds the carrier had been routing to its fiber infrastructure affiliate, in which it holds a minority stake. The court said the practice “fatally compromises Oi’s cash flow” and required proof of contractual backing before any future transfers.
The ruling also froze proceeds from prior asset sales, including those from Oi Fibra, until the judicial administrator reviews their legality and destination. The judge prohibited any sale or encumbrance of assets without authorization.
Reshuffled oversight and separate RJs
Chevrand restructured Oi’s court management, retaining only Preserva-Ação as sole judicial administrator and removing the co-administrators Wald Advogados and K2 Consulting. The court observer was also dismissed. Separately, Oi subsidiaries Serede and Tahto were granted independent judicial recovery in parallel proceedings, ensuring continuity of their operations under a 180-day stay.
What it means
For customers, Oi’s services remain active for now, under court control. Suppliers cannot terminate contracts automatically, and payments must follow judicial channels. Creditors are now subject to the hierarchy of Brazil’s bankruptcy law, and cash flows—including those tied to V.tal—will be monitored to protect liquidity during the transition.
Long crisis
The bankruptcy ruling crowns months of turmoil. In October, Rio’s 7th Business Court removed Oi’s management and suspended R$1.5 billion in obligations amid evidence of asset stripping, inflated fees, and opaque cash disclosures. The court-appointed administrator, Bruno Rezende, replaced the ousted executives as Oi’s governance unraveled.
At the heart of the crisis lay Oi’s attempt to abandon its Brazilian restructuring and seek Chapter 11 protection in the U.S., a move that would have reopened contracts with V.tal, its former fiber unit now controlled by BTG Pactual. The plan triggered fierce resistance: at a September 30 meeting, V.tal’s shareholders approved a liability suit against Oi’s board members after court documents exposed WhatsApp messages describing a “plan of attack” against the network company.
BTG responded by ousting Oi-linked directors and consolidating control of V.tal’s board, keeping its top executives — André Esteves, Roberto Sallouti, and Amos Genish — in charge through 2027. The move insulated Brazil’s largest neutral fiber network from Oi’s downfall and signaled a power shift in the country’s telecom landscape: as Oi heads into liquidation, V.tal emerges as its enduring legacy — and BTG’s stronghold in digital infrastructure.