The first section presents a brief literature review to contextualize the Aracruz case in the empirical foreign-exchange hedging literature. The second section introduces the stylized facts surrounding the case, placing the company‟s downfall in the context of the ambient financial crisis as well as similar cases from around the world. The third section deals with the formal models and presents results for the optimal and effective hedging of Aracruz for the period 1999-2008. Finally, the fourth section summarizes the case and offers comments on implications for future research.