The Morning Warning List · 23 October 2026
Casas Bahia
In April 2024 Casas Bahia agreed with its banks to pay no interest for two years. In August 2026 it asked a court for protection from its creditors. So why was a two-year breather not enough?
Fridges, sofas and televisions, for Brazil.
Casas Bahia sells household appliances, electronics and furniture across Brazil, in its shops and online. It began in 1952, when Samuel Klein, a Polish immigrant, sold goods as a peddler to migrant workers in São Caetano do Sul, near São Paulo. Today the group says it has more than 20,000 direct jobs, and its shares trade in São Paulo.
Fix the debt. Keep the cash.
Twice in three years the company told its lenders and shareholders it had a plan. First it would shrink. Then it would reschedule its debts and keep its cash.
- Close loss-making shops and cut costs, under its 2023 Transformation PlanGrupo Casas Bahia, 2023Done
- Preserve R$4.3 billion of cash through 2027 by rescheduling R$4.1 billion of bank debtCompany estimate, April 2024Not enough
- Keep the shops, depots and website running during the court processCourt filing, 16 Aug 2026Open
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- What a 15 percent interest rate does to a shop that sells on credit
- The two-year breather, and what came after it, in a timeline
- Three moves to win the creditors’ vote
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Free. No noise. One reply is enough to leave the list. Not investment advice.
A breather, a cleaner balance sheet, then court.
In 2023 the company closed 55 shops that lost money and cut 8,600 jobs, it says.
In April 2024 it rescheduled R$4.1 billion of debt out of court, in a deal agreed with its main creditors, Bradesco and Banco do Brasil. It would pay no interest for 24 months and no repayments for 30 months. The banks could swap 63% of what they were owed for shares.
In 2025 about R$2 billion of debt was turned into shares, Nord Investimentos reports. Yet the losses grew. The group lost R$1.5 billion in 2025, after R$1 billion in 2024.
On 16 August 2026 it asked a São Paulo court for recuperação judicial, Brazil’s court-supervised rescue. The claims came to R$17.3 billion. They ranged from an insurer and a credit fund to Samsung. About 19,400 creditors had no security for what they were owed.
Net loss for the year, R$ billion
From the breather to the court
When money got dear, it paid twice.
Casas Bahia is a shop that also lives on credit. Its customers buy in instalments. Its suppliers are paid through bank arrangements. The company borrows too. The group itself says its model depends on consumer credit, working capital and corporate debt.
Then money got dear. Brazil’s base interest rate rose from 2% a year to 15% in 2025, Capital Aberto reports. A fridge sold in instalments is, for the shop, a small loan with a door.
Families had less to spend, and more of them fell behind on payments, the company says. Stock became harder to finance, so there was less on the shelves to sell.
When your customers buy on credit, the interest rate is your real price.
Between April and June 2026 it lost R$10.1 billion, much of it from write-downs and the cost of closing 298 shops. On 21 October a São Paulo court accepted its request and named an administrator. Creditors must now vote on a rescue plan. Customers who already have their goods keep paying their instalments as agreed.
Brazil’s base interest rate, % a year
Three moves to win the creditors’ vote.
Cut the debt to what the shops earn.
A plan that only moves the dates again would be the third breather. Creditors are more likely to back a plan that matches the debt to the cash the shops make.
Keep the shelves full.
A shop with empty shelves cannot earn its way out. New money for stock, approved by the court, comes first.
Let a bank carry the instalments.
Sell on credit, but let a lender hold the loans and the risk. Then the shop can be a shop.
Price the Loan Before You Sell the Fridge
In 1952 Samuel Klein, a Polish immigrant, worked as a peddler near São Paulo, selling to migrant workers. His shop, Casas Bahia, came to sell Brazil its fridges and televisions. In time it came to lean on credit: for customers, for stock and for the company. A fridge sold in instalments is, for the shop, a small loan with a door. In April 2024 Casas Bahia rescheduled R$4.1 billion of bank debt. Then money got dear. In 2025 Brazil’s base interest rate reached 15 percent. On 16 August 2026 it asked a São Paulo court for protection from R$17.3 billion of claims. Selling on credit makes the interest rate your real price. Price the loan before you sell the fridge.
— Max Noble
Casas Bahia sold Brazil its fridges in instalments, and when interest rose, the loans weighed more than the fridges.
From the book in preparationThe 42 Laws of BANKRUPT · the 2027 edition, out 31 OctoberRead every law so far →
Every number traceable.
- Poder360, 22 Oct 2026: court accepts the request on 21 Oct; administrator named; 30 days for documents · poder360.com.br
- InfoMoney (Estadão Conteúdo), 21 Oct 2026: R$17.3bn of claims, R$16.4bn unsecured; reasons given · infomoney.com.br
- Capital Aberto, 17 Aug 2026: filing on 16 Aug, Q2 2026 loss, interest rate 2% to 15%, business model, 2023 plan, 20,000 jobs · capitalaberto.com.br
- Financier Worldwide, Nov 2026: 19,400 unsecured creditors, largest claims, 298 shops closed · financierworldwide.com
- Mercado & Consumo, 29 Apr 2024: R$4.1bn out-of-court debt deal, grace periods, share swap, cash estimate · mercadoeconsumo.com.br
- Nord Investimentos, 12 Mar 2026: 2025 and 2024 net loss, about R$2bn of debt turned into shares · nordinvestimentos.com.br
- Tribuna de Jundiaí, 22 Aug 2026: customers keep paying their instalments; 298 shops closed · tribunadejundiai.com.br
- Wikipedia: Casas Bahia, founding in 1952 by Samuel Klein · wikipedia.org
The three moves and the law are Max Noble’s analysis. Not investment advice.