14 Companies Go to Court Against World Cup Organizers Over Default

05/25/2016 - 12h44

Businessman Daniel Okamoto has bad memories of the World Cup 2014, but not because of the 7-1 defeat that Germany imposed to Brazil.

"My company almost went bankrupt because of the World Cup," he says. The Dahouse Events, owned by Okamoto, won the bid for a contract of R$ 300,000 (US$ 83,905) to make the costumes for the opening and closing ceremonies, but wasn't paid.

"At first we received approximately R$ 86,000 (US$ 24,052), but the rest was not paid," he says.

"I took a loan from the bank, hired people and didn't get what was agreed. Since then I had to fire my 12 employees and sold real estate to pay off the debt. I still owe four suppliers, banks and even taxes related to the contract that wasn´t paid".

The debt, corrected for inflation, is R$ 222,600 (US$ 62,257).

Dahouse is one of 14 companies that went to court in São Paulo over debts related to services provided for the opening and closing ceremonies of the World Cup.

They provided scenic design, sound equipment, logistics, security, lighting and communication services, and claim damages which together add up to over R$ 4.255 million (US$ 1.182 million).

The company responsible for the payment of suppliers is Spirit Communication, an agency contracted by the Local Organizing Committee of the World Cup (COL, in its Portuguese acronym) to organize the two ceremonies.

The committee transferred money to Spirit, which should pay the contractors. At first, the payments were made normally, but started to fail a month before the World Cup.

Those who signed contracts with payments after the World Cup didn't see a penny. Gabisom, which provided sound system and musical equipment, signed with Spirit a contract which provided payment in a lump sum of R $ 746,700 (US$ 208,838) in October 2014. The payment was never made.

Gabisom is suing Spirit, but the lawsuit includes the COL as co-responsible for the debt.

The largest creditor listed in the São Paulo state court is Mchecon, which won the bid for "all services necessary for the assembly and disassembly of set design pieces" for R $ 2.5 million (US$ 699,203).

The company also named the COL as co-responsible. By May 15, Mchecon received R$ 795,800 (US$ 222,570), but the remaining R$ 1.78 million (US$ 497,832) was never paid.

The debt, corrected for inflation, is now over R$ 2 million (US$ 559,362).

INTERFERENCE

In the court, Mchecon tries to prove that who actually dealt with suppliers were executives of the COL, and not Spirit employees. Emails with conversations between people from the committee and the company were attached to the lawsuit.

In one of the emails, the lawyers argue that the executive director of the COL, Joana Havelange, "actively interfere in the definition of events" of the ceremonies.

On March 25, 2014, she sent e-mail to Mchecon asking to transfer to the morning a test regarding the artistic review and finalization of the set design pieces.

She is the granddaughter of FIFA's former president Joao Havelange and the daughter of Ricardo Teixeira, former president of the Brazilian Football Confederation (CBF, in its Portuguese acronym).

The Local Organizing Committee said in a statement that it hired Spirit to organize the opening and closing ceremonies of the World Cup and that "all obligations (...) with that company have been duly complied with, having the COL received full discharge in relation to the contract. "

Translated by MARINA DELLA VALLE

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	Eduardo Knapp/Folhapress
	"My company almost went bankrupt because of the World Cup," says businessman Daniel Okamoto