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Brazil’s Famous Porcão Churrascaria Faces 38 Law Suits

Posted on the 08 April 2014 by Angelicolaw @AngelicoLaw

The future of one of Rio’s most famous Brazilian barbecue restaurants appears to be in jeopardy. Brasil Foodservices Group (BFG), the controlling shareholder of Porcão Churrascaria, is facing 38 lawsuits alleging that it has failed to pay its debts.

At stake is the brand of the iconic Brazilian steakhouse. That’s because a Rio court has ruled that the brand be held as security for a R$5 million debt purportedly owed to Prince Comércio e Serviços Ltda. for unpaid rent on a property in Barra da Tijuca.

In its defense, BFG claims that it does not owe the rent because BFG rejected the location after finding that it was not in adequate condition for a restaurant. The rejection, argues BFG, had the effect of annulling the rental contract so no rent was ever owed. BFG has requested an inspection of the property by the Justice Department. However, the inspection has yet to take place.

Additionally, BFG is appealing the use of its brand as security, arguing that the brand is more valuable than the alleged debt. To make matters worse, during the first three quarters of 2013, BFG posted R$137.2 million in losses. It also faces at least 38 separate lawsuits.

One of the most significant disputes involves a debt of R$32 million for the violation of employment contracts. It’s alleged that BFG did not pass along tips and did not pay for extra hours or holidays. BFG has acknowledged these debts and has plans to pay them by mid-2016.

BFG has also been late in paying salaries, prompting Porcão employees to prepare for a strike in February. However, BFG quickly paid the employees and explained that it was going through a restructuring process that delayed certain payments. A strike by Porcão employees in 2013 resulted in at least 16 employees being fired.

Porcão Churrascaria is arguably the most famous churrascaria is the world. Established in 1975 on Avenida Brasil in Centro, Rio de Janeiro, the Brazilian steakhouse has experienced significant growth over the years. Porcão, or Big Pig, has five restaurants in Rio alone with other locations in Brasilia and Belo Horizonte.

The Porcão Churrascaria name was also franchised to restaurants in New York and Miami in the United States. However, both locations were closed citing difficulties associated with managing the restaurants internationally.

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