Heloísa Nogueira Engel and Maria Eduarda Vidotti
The path to recovery is uncertain and involves numerous factors beyond the mere granting of the request; the company will need not only to resolve its outstanding legal and financial issues but also to reinvent its business model.
123 Milhas, a company holding a prominent position in the tourism and travel sectors, filed for judicial reorganization due to the economic and financial crisis it is facing. According to the company, the downturn in the tourism and travel market, fierce competition, a heavy tax burden, and a lack of working capital were among the factors contributing to the companies' current situation.
The "Promo123" program—offered by 123 Milhas and the primary driver behind the filing—is facing criticism for a lack of transparency and for causing losses to customers. As described by the company, the program was designed for customers with flexible travel schedules and dates. It involved selling airline tickets and travel packages with adjustable dates, where tickets would be issued after the customer's purchase, without a specific date having been set in advance.
However, the reported delay in fulfilling products purchased through the Promo123 program caused a major uproar. Numerous sensationalist news reports regarding the companies' financial situation led to contract cancellations and a rush by various entities to file lawsuits seeking preliminary injunctions to freeze funds—moves that proved devastating for the company.
Furthermore, the model in question allowed the company to choose the optimal time to purchase the ticket or package previously bought by the customer—securing a more favorable price—which may have resulted in losses for customers whose trips did not take place or who had to bear additional costs.
According to the judicial reorganization filing, four lawsuits are currently being filed against the company every hour in Belo Horizonte alone. However, 123 Milhas claims to possess the necessary means and know-how to maintain business operations and generate profit, yet it requires judicial reorganization to restructure its finances and attempt a recovery.
The reorganization filing appears to be a move born of sheer desperation; facing liabilities estimated at over 2 billion reais, 123 Milhas submitted only a portion of the documents required for the court to grant the reorganization request. Furthermore, the company seeks an immediate preliminary injunction and an early start to the "stay period," aiming to freeze all lawsuits against the firm—and consequently, any asset seizure actions—for a period of 180 days.
Amidst this delicate situation, a crucial question arises: will 123 Milhas manage to get back on its feet and overcome this crisis, or are we witnessing the beginning of its irreversible decline? The filing for judicial reorganization itself demonstrates the company's good faith and its attempt to reorganize its finances and find a way out of its current troubles. Nevertheless, it is difficult to ignore the warning signs inherent in the situation.
The lack of transparency regarding the Promo123 program—which appears to have caused customer dissatisfaction—may raise doubts about the company's ethics and reliability. Moreover, the delay in fulfilling orders placed through this program, combined with ongoing lawsuits, has further tarnished 123 Milhas's image and eroded consumer trust.
The economic and financial crisis facing the company may not stem solely from general market conditions. A lack of strategic planning, inadequate resource management, and a risky business model may also have contributed to the current situation. Even though the company claims to possess the necessary means and expertise to recover, successfully executing such a plan is a complex task requiring not only financial effort but also a thorough review of its business practices.
Given the current scenario, an interesting approach to consider is the possibility of a quick restart—an alternative known in US law as a "Fresh Start." Under this model, the company would opt for a more "agile" bankruptcy process, allowing it to emerge with a clean slate and a reimagined business model. This approach would facilitate a more dynamic and efficient renewal, potentially reducing the costs and time associated with a protracted judicial reorganization process.
By exploring the "Fresh Start" option within Brazilian law—incorporated into Article 158 et seq. by Law No. 14.112/2020—the company could pursue a restructuring based on the actual settlement of financial obligations, while simultaneously taking the opportunity to deeply evaluate its operations and practices.
This could involve redefining market strategies, renewing a commitment to transparency and customer satisfaction, and creating a solid plan to ensure sustainable financial management in the future—especially given that, as noted in the judicial reorganization proceedings, the company has faced financial difficulties since its inception.
In the current landscape, 123 Milhas faces an uphill battle to regain public trust, restructure its operations, and balance its finances. The path to recovery is uncertain and involves numerous factors extending beyond a judicial reorganization filing. The company will need not only to resolve its outstanding legal and financial issues but also to reinvent its business approach, demonstrating transparency, accountability, and a compelling value proposition for its customers.
Regardless of the path chosen, the desire to bounce back is evident, yet the situation's complexity demands in-depth analysis and measured decisions. The pursuit of a second chance—whether through a judicial reorganization process or a "Fresh Start"—must be driven by a focus on restoring public confidence, revitalizing the business model, and building a solid foundation for the future.
Faced with all these uncertainties, only time will tell whether 123 Milhas can truly recover or if the current situation reflects a profound market shift—with deeper, more persistent challenges that could eventually lead to the disappearance of the company as we know it today.
1 – Case No. 5194147-26.2023.8.13.002
2 – MAY. Chapter 13 bankruptcy may help debtors obtain a fresh start | Stockton & Kandt. Stocktonlaw.com. Available at: . Accessed on: Aug. 29, 2023.
3 – Law No. 11.101/05. Planalto.gov.br. Available at: . Accessed on: Aug. 29, 2023.
