CEO: anticipating the crisis and protecting your assets
Financial difficulties rarely arise overnight. A deteriorating order book, lengthening payment deadlines, major disputes that are tying up cash. Insolvency law offers solutions at every stage of this deterioration, provided that action is taken before it is too late.
When your company can no longer meet its current liabilities with its available assets, you are in a state of suspension of payments. You then have 45 days to declare it to the commercial court registry. This is not a cooling-off period: exceeding it exposes the director to liability for insufficient assets, a ban on managing the business, or even personal bankruptcy.
Article L. 631-1 of the French Commercial Code - Suspension of payments
«Judicial reorganisation proceedings shall be instituted for any debtor who is unable to meet its current liabilities with its available assets and is in suspension of payments. The cessation of payments is the pivotal point in insolvency law. Below this point, the safeguard procedure remains available. Beyond that point, only receivership or liquidation may be opened.
Before this happens, there are a number of preventive tools available. Ad hoc mandates and conciliation are confidential procedures that allow you to negotiate an agreement with your creditors under the aegis of the president of the commercial court, without publicity. Managers are often unaware of these amicable procedures, even though they offer tangible results if they are initiated in good time.
Our firm handles
- Diagnosis of the financial situation and classification of the state of suspension of payments
- Setting up preventive procedures: ad hoc mandates, conciliation, etc.
- Preparing and filing the declaration of cessation of payments with the court clerk's office
- Representation of the director before the Commercial Court at the opening hearing
- Support during the observation period in safeguard or receivership proceedings
- Drawing up the safeguard plan or recovery plan with the court-appointed administrator
- Defending against liability claims for insufficient assets and applications for management bans
- Protection of directors' personal assets and guarantors
Creditors: protecting your rights in insolvency proceedings
Your debtor has been placed under protection, receivership or compulsory liquidation. As soon as the order is issued, individual legal proceedings are suspended. You can no longer seize your debtor's assets or claim payment of your debts directly from him. The only leverage you have left is to file a claim with the judicial representative. The deadline is strict - two months from the date of publication in the BODACC. Once this period has elapsed, you will be barred from participating in any distributions.
The declaration is only the first step. The verification of claims may give rise to disputes over the amount, the nature of the claim or its priority ranking. If your debtor proposes a safeguard or reorganisation plan, the conditions for settling your claim will be set for a period of up to ten years. Defending your position in these negotiations requires a lawyer who is familiar with the mechanisms of insolvency law.
Our firm handles
- Declaration of claim in the legal form and within the legal time limits
- Claiming property in the event of a retention-of-title or leasing clause
- Defence of lien rank against other creditors: pledge, mortgage, special lien
- Contesting the admission or rejection of your claim before the official receiver
- Involvement in asset disposals in receivership
- Resumption of individual proceedings after closure of the insolvency proceedings
Takeover: seizing takeover opportunities
Insolvency proceedings create opportunities for investors and buyers. A sale plan in receivership or a sale of assets in liquidation makes it possible to take over all or part of a business, often on advantageous terms. The buyer acquires the assets free of any liabilities; the employment contracts of the employees taken over are transferred by operation of law.
The takeover bid must be solid, credible and comply with the conditions set out in the French Commercial Code. The court will select the bid that best guarantees that jobs will be maintained and creditors paid. Bids often compete with each other, and preparation makes all the difference.
Our firm handles
- Identifying and analysing opportunities to take over a company in difficulty
- Drafting and filing the takeover offer in accordance with legal requirements
- Representing the buyer at the hearing before the Commercial Court
- Negotiations with the court-appointed administrator or liquidator
- Legal due diligence on assets, contracts and risks
From prevention to liquidation: our approach
Insolvency law provides a graduated response to a company's difficulties. Each procedure has its own opening conditions, logic and constraints. The role of the lawyer is to guide the manager towards the procedure best suited to his situation and to defend his interests throughout the process.
The 4 levels of difficulty handling
Prevention (ad hoc mandate, conciliation)
Judicial safeguard
Receivership
Court-ordered liquidation
The cessation of payments separates two worlds. Until the cessation of payments is established, the company director can request the opening of a safeguard procedure. As soon as the cessation of payments is established, the company is placed in receivership - unless recovery is manifestly impossible, in which case it is placed in liquidation. Preventive procedures (mandat ad hoc and conciliation) are used upstream, in a confidential framework, to try to avoid the opening of insolvency proceedings.
Our firm appears before the Commercial Court of Marseille and courts throughout France. We also handle cases with an international dimension.
To find out more about each procedure, visit our dedicated pages:
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