On February 13, 2025, the Special Panel of the Superior Court of Justice (STJ) ruled, by majority decision, that when a motion for piercing the corporate veil (IDPJ) is denied, the creditor is responsible for paying the attorneys’ fees of the party improperly brought into the proceedings.

The IDPJ is a procedural tool used in lawsuits where a creditor tries to hold shareholders or managers personally liable for company debts, claiming abuse of the corporate entity — such as commingling of assets or misuse of corporate purpose. Unlike a simple allegation, the IDPJ requires solid evidence and ensures that the affected parties have the right to defend themselves.

If the court grants the motion, the shareholders or managers become personally liable for the debt. However, if the court denies the motion, the creditor may have to pay attorneys' fees to the shareholders or managers they tried to hold liable.

The IDPJ carries its own case value, typically corresponding to the amount of the debt at issue. Since court-awarded attorneys’ fees are generally set between 10% and 20% of the case value, a creditor may face substantial financial exposure if the debt is significant and the motion is denied. In other words, an unsuccessful creditor could ultimately be liable for significant payment to the shareholders or corporate officers they attempted to hold personally responsible.

This ruling is particularly significant because it was issued by the Special Panel, which is responsible for ensuring consistent rulings from the Third and Fourth Chambers of the STJ, both of which handle matters of private law.

Given this precedent, creditors must exercise greater diligence and carefully evaluate the legal and evidentiary basis before filing a motion for IDPJ to avoid potential financial liability. Key considerations include:

i. Obtain clear and compelling proof of asset commingling or misuse of corporate purpose, which may require the assistance of forensic investigators or financial expert.

ii. Conduct a thorough analysis of the company’s and shareholders’ financial position to determine if there are sufficient assets to justify the motion and whether piercing the corporate veil will effectively support debt recovery.

iii. Carefully consider whether filing an IDPJ is the most effective option, weighing the potential costs and exploring other enforcement mechanisms, such as asset freezes or other judicial measures that may provide a more efficient path to debt collection.

On the other side of the dispute, shareholders and corporate officers should have experienced legal representation to effectively monitor and challenge an IDPJ. A well-prepared defense can be crucial in preventing unjustified piercing of the corporate veil.

In conclusion, the STJ’s ruling highlights the importance of a thorough and strategic legal assessment by all parties involved. Creditors must exercise greater caution when seeking to pierce the corporate veil, as they now face increased financial risk if their motion is denied. Similarly, shareholders and corporate officers must be prepared to mount a strong defense to protect themselves from unjustified personal liability.

Read the full opinions of Justice Ricardo Villas Bôas Cueva and Justice Nancy Andrighi.

MAC Advogados team brings extensive expertise in corporate dispute resolution and is uniquely positioned to deliver strategic, results-driven support in piercing the corporate veil and related matters.