Court Confirms Bankruptcy of Oi Amid Legal Battles and Service Concerns

The Court of Justice of Rio de Janeiro has decreed the bankruptcy of the telecommunications company Oi for a second time. This decision follows a period of legal instability where a previous bankruptcy decree from November 2025 was suspended due to appeals from creditors including Bradesco and Itaú Unibanco. The current ruling establishes that essential services must continue to be provided until a transition to other providers is completed.

The bankruptcy has raised concerns regarding critical infrastructure. Caixa Econômica Federal currently uses Oi to connect approximately 13,000 lottery shops across Brazil. The bank stated that services will continue as defined by the court until a technical replacement is possible, though no deadline for this change has been set. This dependency caused system outages in lottery shops across 18 states in early August when Sitelbra, a service provider for Oi, cut links due to non payment. Similar disruptions affected security cameras in Bahia, Enel operations in Ceará, and government services in Goiás.

Simultaneously, the bankruptcy has intensified legal scrutiny of the Ad Hoc Group, consisting of investment funds Pimco, SC Lowy, and Ashmore. These funds became majority shareholders by converting credits into shares during a 2024 judicial recovery plan. A lawsuit in the 7th Business Court of Rio de Janeiro alleges that these funds used their control to prioritize their own payments to the detriment of other creditors. While the court has previously ordered the seizure of credits from Pimco to ensure potential payments, legal experts note that no final judgment on the merits of these illegalities has been reached. The court has ruled that the investigation into the personal responsibility of controllers and administrators will proceed regardless of the bankruptcy status.