The Americanas-BTG Pactual feud became a proxy war for Lula v. Bolsonaro

A recent public hearing of the Senate Committee on Economic Affairs shed light on a different facet of the Americanas case — the floundering retailer trying to claw its way out of a bankruptcy protection process initiated after the company reported “accounting inconsistencies” of BRL 20 billion (USD 4 billion) and liabilities of BRL 43 billion.

In granting the company’s request for bankruptcy protection, a Rio de Janeiro business court said that Americanas going under could lead to “a collapse in Brazil’s supply chains, with considerable losses to relevant economic sectors, affecting over 50 million consumers and putting at risk [45,000] workers.” 

Economists warned about the risk of Americanas being the first domino with the potential to unlock a chain of events that would lead Brazil into recession. Since the scandal broke, banks have become stingier with credit at a time when companies desperately need it.

But the Americanas scandal is not just a corporate affair. It is also an opportunity for allies of President Luiz Inácio Lula da Silva and those of Jair Bolsonaro, his predecessor, to engage in a proxy war. The former are friendly toward Americanas, while the latter are harshly critical of...