The Fundo Garantidor de Créditos (FGC) has recently withdrawn R$ 3 billion from the bankrupt Banco Cruzeiro do Sul, which officially declared insolvency in 2015. This action has sparked legal disputes as the FGC seeks to recover funds owed to it as it engages in litigation against other creditors of the bank. The withdrawal was made under judicial authorization, with the FGC planning to replace the withdrawn amount with Treasury bonds linked to the Selic rate.

However, some institutions that are also creditors of Banco Cruzeiro do Sul have filed appeals against this advance payment, arguing that the move contravenes the bankruptcy proceedings and that the Treasury bonds do not equate to the withdrawn amount. They assert that the original funds were invested in a fixed income fund with monthly returns, suggesting that the swap is not a fair replacement. Judge Eduardo Azuma Nishi has ruled in favor of these creditors, ordering the FGC to revert the transaction by a specified deadline, which has led to further tensions in the legal disputes.

In response to the judge's order, the FGC has filed an appeal, indicating that the case is likely to develop further in Brazilian courts. This controversy highlights the intricate legal nature of bankruptcy proceedings in Brazil and the competing interests among creditors, with potential implications for how similar cases could be handled in the future across financial institutions facing insolvency.