Carrefour sues Sonae over debts in Brazil

 In Companies, Food distribution, Justice, News

The French supermarket retailer Carrefour is to sue Sonae in a bid to claw black a number of fines that were slapped on it over civil, labour and tax infractions that were still pendant and unpaid on the date Sonae sold its operations in Brazil in 2005.

According to the case which has been registered at a Lisbon Civil Court, and which the online news source ECO has obtained, the fines total €8.8 million plus interest.
Eighteen years ago the Sonae group led by Cláudia Azevedo decided to get out of the food distribution sector in Brazil where it had 140 stores in the south of the country but sold its assets to Walmart for €635 million. These in turn were sold to other companies in the sector, the latest owner of the assts was Carrefour which paid €1.1Bn in March 2021 to the group BIG Brasil which belongs to Walmart and Advent International, for the former Sonae supermarkets which in Portugal has the Continente supermarkets.
However, in the purchase and sale contract signed in December 2005 it was agreed that Modelo Investment Brasil, the local vehicle through which Sonae operated in Brazil, would compensate the buyer for all losses and costs from pending cases at the date of the transaction or relative to prior or contemporary facts to do with this sale.
This is a common clause in such types of acquisitions so that the seller continues to be responsible for existing litigation with staff, suppliers and public entities before the date of sale.
At the same time, on December 13, 2005, Sonae MC SGPS (then called Modelo Continente SGPS) signed a letter of intent in Walmart’s favour, with the holding based in Maia committing to pay all obligations that the Brazilian vehicle had accepted from this transaction.
This binding comfort letter is common for operations of this kind since the local company, after selling the assets, ceased to hold assets in Brazil.
In order for the buyer to get these outstanding debts paid, if the payments were not made voluntarily and they don’t reply — as was the case — they can pursue the matter with the holding company and if they don’t reply get recourse through the Portuguese courts which now seems to be the case.
An official source from MC told ECO: “MC is calmly and securely awaiting a positive outcome from this case, it always acts in the knowledge of its legal and contractual obligations in accordance with the principles of good faith, honesty and integrity.”