Feb 2, 2023
3G Billionaires’ Personal Assets Targeted by Americanas Creditors
(Bloomberg) -- Top Brazilian banks that are creditors of distressed retailer Americanas SA plan to go after personal assets of billionaires who are the firm’s biggest shareholders: Jorge Paulo Lemann, Marcel Telles and Carlos Sicupira.
The firms will make the move if the billionaires don’t rescue the company with combined capital injections of at least 15 billion reais ($3 billion), according to people familiar to the matter, who asked not to be identified because the decisions aren’t public. The billionaires have offered no more than 6 billion reais, the people said.
Creditors are trying to prove who was responsible for the $4 billion of “accounting inconsistencies” announced by Americanas, which doubled the retailer’s liabilities and made it collapse in one week. They say that the firm’s managers and main shareholders benefited from what they call fraud.
Representatives for Americanas and the billionaires didn’t immediately respond to messages requesting comment.
In a Jan. 22 filing, the three billionaires said they didn’t know about the accounting issues. “We never had any knowledge and would never have tolerated any maneuvers or accounting tricks in the company,” Lemann, Telles and Sicupira said. “Our action over decades has always been one of ethical and legal rigor.”
Bradesco SA, the biggest Americanas creditor and Brazil’s second-largest bank by market value, has said in a filing obtained by Bloomberg that it aims to go after the personal assets of shareholders. Other large banks have a similar view, but the people familiar with the matter asked not to identify them because it would reveal their legal strategy. A Bradesco spokesperson declined to comment.
With 41.2 billion reais in debt, Americanas filed for bankruptcy protection in a Rio de Janeiro court on Jan. 19. Negotiations with creditors stalled and the firm has been embroiled in a legal fight with banks.
In addition to Bradesco, Americanas debt holders include Banco BTG Pactual SA, Banco Santander SA’s Brazil unit, Itau Unibanco Holding SA and Banco Safra SA.
Much of the management team that ran Rio de Janeiro-based Americanas before the accounting issues were revealed is still in place. Former Chief Executive Officer Miguel Gutierrez left prior to the announcement.
Judge Andréa Galhardo Palma granted Bradesco the right of “advance production of evidence” — the search and seizure of emails and documents from board members, main shareholders, executive directors and employees over the last 10 years. The judge said the measure was to prevent the destruction of evidence.
That decision was confirmed Thursday by Judge Ricardo Negrao after Americanas appealed, alleging “a breach of secrecy and violation of the privacy of subjects” who are in no way related to the case.
Kroll Associates Brasil Ltda has been nominated to examine those documents, which will be kept sealed and shared with securities market regulator CVM. Other creditor banks said they think they would be able to use the same evidence against shareholders.
Later Thursday, the search and seizure of emails was halted by Judge Alexandre de Carvalho Mesquita, from Rio de Janeiro. The judge accepted an argument by Americanas that courts in Sao Paulo shouldn’t decide the case because the firm is based in Rio de Janeiro.
In its Jan. 23 filing signed by law firm Warde Advogados, Bradesco said that shareholders received 1.8 billion reais in dividends during the 10 years of “inconsistencies.” Last year, Americanas distributed a record 330 million reais in dividends, according to the filing.
In the same 10 years, Americanas managers received more than 700 million reais in wages, bonuses and benefits, some linked to the company results, Bradesco said. The executives sold Americanas shares valued at 241 million reais last year, according to the filing.
In a separate filing, BTG cites a restructuring in Americanas in the middle of 2021, which diluted Lemann, Sicupira and Telles to their 31% stake in the firm. The three gave up the control without asking for a premium, which is unusual to them, BTG said on the Jan. 14 filing.
The businessmen — who founded buyout firm 3G Capital Inc and have been invested in Americanas since 1982 — are the three wealthiest Brazilians. They have a combined fortune of $39.4 billion, according to the Bloomberg Billionaires Index.
They said that in the past 20 years the company has been run by highly qualified executives, and that neither auditor PwC nor banks involved in reviewing financial statements ever found irregularities.
Brazil’s President Luiz Inacio Lula da Silva said Thursday that the collapse of Americanas was a result of “fraud” by Lemann. The leftist leader, speaking in a TV interview, compared Lemann, Brazil’s richest man, to Eike Batista, who occupied the same position before his companies collapsed and he was briefly arrested for bribery and market manipulation.
--With assistance from Simone Iglesias.
(Updates with judge’s decision, Lula starting in 13th paragraph.)
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