Court Freezes R$143 Million in Financial Assets of Marcelo Odebrecht

RIO DE JANEIRO, BRAZIL – The São Paulo courts have frozen R$143 (US$32) million from Marcelo Odebrecht’s accounts. The preliminary decision, handed down on Tuesday by Judge Eduardo Pellegrinelli, of the 2nd São Paulo Business Court, meets Odebrecht Group’s own request, which brought the lawsuit against its former president, his wife and daughters.

Two weeks before Odebrecht and the 77 whistleblowers signed the leniency agreement in 2016, Marcelo, in return for accepting the cooperation agreement, demanded a payment of R$143 million. Half was paid in cash and the remainder deposited in a pension plan on behalf of his wife and three daughters.

The deal signed between Marcelo and Odebrecht provides for arbitration to resolve the conflict, but the lawsuit was filed by the corporate group to prevent the money from disappearing. In the ruling, the judge found that there was risk of an “attempt to shield” the money by its former president, based on messages from Marcelo and appended to the case file.

Both sides are at war for the control of the group. By late last year, Marcelo, out of the group’s command since 2015 when he was convicted by Lava Jato, was still being paid wages and benefits by the company.

However, he was fired for just cause at the request of his father Emílio. Marcelo had criticized current executives for the way the group was being conducted while undergoing judicial reorganization, and made himself available to the family to resume command.

Odebrecht started an internal investigation to find potential crimes committed by Marcelo. The investigation has not been completed yet, but the company says it has found evidence against its former president in the proposed action.

Among the evidence, the judge referred to messages that would suggest blackmail by Marcelo against the group’s current and former executives. “I’ll end up blowing everybody up”, says one of them. Marcelo failed to reply to the report’s request for an interview.

With a debt of R$98.5 billion, the group is expected to hold a meeting with creditors on March 18th to approve its judicial reorganization plan. Among the major creditors are Banco do Brasil, Itaú, Bradesco, Santander and BNDES.

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