Wednesday, 14th April 2010 by David Thorley

Machado, Meyer, Sendacz e Opice Advogados, along with lawyers from Pompeu Longo Advogados, has helped Italian dairy company Parmalat′s Brazilian outfit reduce a tax bill by 99.914%.

The initial fine of 14 billion reais (just over US$8 billion) was levied at 10 times the company′s 1999 annual income, but, counsel argued, Parmalat went into bankruptcy four years after it was imposed, meaning the fine ought to be reassessed as the company had significantly downscaled its operations.

In a decision issued on 7 April, the Brazilian board of tax appeals (CARF) agreed, reducing the fine to 12 million reais (just under US$7 million).

Parmalat Brazil was taken over by Latin America Equity Partners (LAEP) in 2006, and since has been in the process of working through its restructuring plan to pay off its debts.

Thomas Felsberg of Felsberg, Pedretti, Mannrich e Aidar Advogados, which acted for Parmalat up to the LAEP takeover, says that enforcing the 14 billion reais fine would have endangered the repayment plan, saying, ′It is a disproportion. The debt has to be something within the reasonable scope of company size. It was an excessive tax demand."

Counsel to Parmalat

·          In-house counsel - Rodrigo Ferraz and Anelisa Racy Lopes

·          Machado, Meyer, Sendacz e Opice Advogados

Partners Celso Costa and Fernanda Sá Freire

Pompeu Longo Advogados

Partner José Henrique Longo

(Latin Lawyer 14.04.2010)

(Notícia na Íntegra)