Court keeps Kroll as Fictor bankruptcy watchdog
A Brazilian court rejected Fictor's bid to remove a monitoring agent, exposing deep valuation disputes and contagion risks in the $835m bankruptcy tied to the failed Banco Master rescue.
A São Paulo appeals court has rejected Fictor’s attempt to remove Kroll Associates Brasil as the monitoring agent in its judicial reorganization. The July 3 ruling upholds an unrestricted remit for the watchdog and forces the conglomerate to absorb the costs of the additional oversight.
Fictor entered Brazil’s equivalent of Chapter 11 in February after its announced acquisition of Banco Master fell apart. The central bank liquidated the troubled lender just hours after Fictor’s November 2025 announcement, a sequence the group says destroyed its reputation and drained its liquidity.
The resulting bankruptcy proceeding encompasses 43 separate companies, spanning solar and thermal power projects, agricultural trading, and financial services. Built through acquisition rather than organic growth, the group carries total liabilities of roughly 4.3 billion reais, or $835 million.
Fictor argued that Kroll’s appointment lacked a basis in insolvency statute and duplicated the work of the court-appointed administrator, prosecutors, a creditors’ committee, and the judge. The company also protested the expense, noting the administrator's provisional fee of 645,000 reais a month, with Kroll's retrospective review adding several hundred thousand more.
Yet the most consequential dispute in the case is not between Fictor and the watchdog. Creditors are actively pushing to dismiss the administrator, Laspro Consultores, over its methodology for calculating what investors are owed.
Laspro contends that the joint-venture contracts Fictor used to raise capital were unauthorized shams. Treating them as void would reclassify the investments as simple loans. Under this framework, claims would be recalculated as the original principal minus any prior withdrawals, adjusted only for inflation, stripping out all promised profits.
The administrator maintains this ensures parity, preventing investors who took money out before the collapse from claiming as if they had not. Creditors' lawyers have labelled the approach an aberration that unjustly benefits the scheme's architect.
Unpicking the conglomerate's finances has proven exceptionally difficult. Filings detail unsigned balance sheets, missing bank statements, corporate accounts registered to personal tax numbers, and instant transfers to individuals that were later reclassified as related-party loans.
The next inflection point arrives on July 17, when Laspro must lodge its verified list of creditors. For market participants, the core takeaway extends beyond a single conglomerate: the fallout from the Banco Master liquidation continues to metastasize, having already surfaced in the accounts of a cancer-clinic chain and now this sprawling industrial group.
