Yeesco’s Bankruptcy: Legal and Practical Lessons for Business Leaders

In the Brazilian business environment, the adjudication of a company’s bankruptcy presents an opportunity for reflection on multiple aspects of corporate governance and managerial liability. The case of Yeesco Indústria e Comércio de Confecções Ltda., headquartered in Brusque/SC, whose bankruptcy was recently decreed, offers relevant lessons for entrepreneurs and managers. The company, leader in complaints before Procon-SC, had filed for judicial reorganization in October 2024 but, faced with significant debt and numerous consumer complaints, the creditors rejected its reorganization plan and bankruptcy was decreed in October 2025. For managers needing to understand legal issues clearly and without heavy jargon, this article examines the main legal and practical vectors of the situation and provides objective guidance for business operators.

1.     Legal framework for judicial reorganization and bankruptcy: Under Brazilian Law No. 11.101/2005, the company may file for judicial reorganization to overcome an economic-financial crisis and preserve its activities. Approval of the RJ suspends executions against the company and requires presentation of a recovery plan. However, when the plan fails creditors’ approval or proves unviable, bankruptcy may be decreed. In the Yeesco case, bankruptcy was decreed on 13 October 2025 due to non-approval of the plan and inability to recover. Bankruptcy triggers the raising of company assets and payment of creditors in legal order. The company’s debt exceeded approximately R$ 50 million.

2.     Practical implications for businesses and managers: First, the episode shows that filing for reorganization is not sufficient: the plan must be feasible, accepted by creditors and the company must demonstrate economic viability. Yeesco’s plan proposed a 45 % cut of debts and 10-year repayment, leading to rejection. Hence managers must ensure recovery plans are realistic, transparent and negotiated early. Second, the volume of consumer complaints and reputational impact can turn into a corporate risk. Yeesco amassed 715 formal complaints at Procon-SC and more than 62,000 on “Reclame Aqui”, mostly for non-delivery of online purchases. This shows that consumer service, logistics and contractual performance are not only market issues but potential corporate crisis triggers. Third, bankruptcy affected suppliers, creditors and employees. Labour credits have legal priority in bankruptcy. Employees should file labour claims and seek creditor registration in the bankruptcy. For companies growing or operating online, this case is a warning: operational risk in e-commerce (delay, non-delivery, returns) can become legal-corporate crisis. Therefore, compliance with the Consumer Protection Code (CDC) and operational controls are essential. Moreover, in a crisis, early legal, accounting and recovery advisory can avoid bankruptcy. Consolidation of debts, renegotiation with suppliers, review of e-commerce contracts are part of governance.

3.     Sectoral and strategic aspects for e-commerce and textile retail: The textile and e-commerce sector faces tight margins, rising logistical costs and fierce competition. In that context, timely delivery and customer satisfaction are critical. In this case, Yeesco was prohibited by Procon Brusque from online sales in April 2024, resumed operations via TAC with the Public Prosecutor offering to indemnify for delays. Still, complaints continued. For managers in this sector, the scenario reveals that consumer claim risk, delays and non-delivery may convert into corporate-legal crisis. From this standpoint, adherence to the Consumer Protection Code and control of operations in e-commerce are fundamental. For companies in difficulty, early legal‐financial advisory is key, as well as realistic recovery plans and transparent communication with creditors.

4.     Practical recommendations to avoid or mitigate bankruptcy risk: For business leaders, based on this case, they must monitor: (i) internal financial indicators – liquidity, debt, current liabilities vs. realizable assets; (ii) consumer complaint risks, delays and breach risks that may lead to public or administrative demands; (iii) in case of initial crisis, evaluate early the feasibility of recovery, prepare a realistic plan accepted by creditors; (iv) prioritise governance and compliance, including customer service and e-commerce logistics controls; (v) if in a reorganization or possible bankruptcy phase, rely on specialised legal advisory to monitor creditor meetings, asset realization, creditor registration and rights of shareholders, employees and suppliers. It must be recalled that bankruptcy does not simply mean “closing doors”, but a judicial process involving asset raising, sale, creditor registration and eventual liquidation. In the Yeesco case, the court appointed administrator highlighted the need for creditor monitoring of notices, meetings and registration.

Conclusion

The Yeesco case demonstrates how operational issues (non-delivery of products), consumer issues (volume of complaints), financial issues (heavy indebtedness) and legal issues (recovery plan rejection) converge to produce a risk of bankruptcy. For companies wishing to act sustainably and resiliently, robust governance, operational controls in e-commerce, complaint monitoring, and early legal advisory are essential. As a manager or entrepreneur, you should consult legal advisory in corporate law to assess your specific situation, draw a preventive or corrective plan, considering the legal framework of Law 11.101/2005 and relevant jurisprudence.