Bankruptcy
The company went under: what about the employees?
Speak early and truthfully, put wages and severance first and hand over the unemployment insurance documents. People come before suppliers.
bairogonzalez.com team, drawing on Bairo's story · Published
When a company goes under, the weight isn't only yours. On the other side of the payroll are rent, groceries and school for other families' children. That responsibility hurts, and it is exactly what calls for clarity now.
What to do now
- Speak early and speak the truth. An employee who finds out about the closure from a locked door loses the chance to plan. Gather the team, explain the situation without drama and without promises you can't keep.
- Know the order of priority. In bankruptcy, Law 11,101/2005 puts labor claims (up to 150 minimum wages per person) ahead of almost all others. Even outside a court process, treat wages and severance as the bills that come first in line.
- Meet the termination deadlines. Brazil's labor code (CLT) allows up to 10 days after the end of the contract to pay what is owed and hand over the documents. If there isn't money for everything, see a lawyer before the deadline and propose a formal agreement, which can be ratified by the Labor Court.
- Hand over the documents, even without money. The FGTS withdrawal key, the unemployment insurance forms and the update to the digital work record allow the person to receive what is theirs through other channels. Holding back documents only makes life worse for someone already losing their job.
- Help them find new work. Reference letters, contacts, a message to partners asking whether they are hiring. It costs little and changes a lot.
- Don't treat going under as "force majeure." A business's financial crisis is the employer's risk: the CLT says the employer's lack of foresight rules out force majeure (art. 501, §1) and that contractual rights remain in force even in bankruptcy or closure (art. 449). The half severance of art. 502 does not apply to an ordinary crisis; using it on your own usually turns into a court ruling against you later.
- Take care of yourself too. Carrying the guilt for many families is heavy. If it becomes unbearable, CVV at 188, free and 24 hours a day.
When it happened to Bairo
The hardest chapter in Bairo's story is the fall in which other lives depended on him. He says that, when the business he had invested in did not hold, there were many people who depended on him. He speaks of them as human lives, not as lines on a spreadsheet.
At that moment, he says, he made an unlikely decision. Instead of going back to familiar ground, he decided to do something he didn't know how to do and to build again. The next attempt also went wrong, and he was left hanging by people he had helped. He kept going anyway.
Years later, the ventures he founded came to speak of human life and of lifetime as a measure. Anyone who knows the chapter of the fifty lives understands why this theme is so dear to him.
The path
Leadership doesn't end when the money does. That is exactly where leadership shows: in the honest conversation, in the document handed over, in the effort to make sure no one leaves worse off than necessary. People forget many things, but they remember how they were treated in the fall.
If anything is left over, even a little, use it to settle what is owed to people before thinking about saving assets. An asset sold to pay severance is an asset well spent. And when you start a business again one day, those same people may come back to work with you, because they saw how you acted at the worst moment. A reputation for treating your team well in the fall is capital no creditor can take.