Our intervention in receivership
Judicial reorganisation is the procedure that allows a company that has suspended payments to continue trading, maintain employment and pay off its liabilities under the supervision of the commercial court. It is a race against time: 45 days to declare the cessation of payments, 6 to 18 months of observation period to demonstrate that the business is viable.
Our firm assists managers, creditors and buyers at every stage of these proceedings. We appear before the Commercial Courts and Magistrates' Courts, alongside the court-appointed administrator and the court-appointed trustee.
Article L. 631-1 of the French Commercial Code
«The receivership procedure is open to any debtor who is unable to meet its current liabilities with its available assets and is in suspension of payments. Its purpose is to enable the company to continue trading, maintain employment and pay off its debts.»
Stages of receivership
Cessation of payments
Declaration to the registry (45 days)
Opening judgment
Observation period (6-18 months)
Economic and social report
Recovery plan or sale
CEO: dealing with your company's difficulties
Your cash flow has dried up. Suppliers are no longer delivering, URSSAF is threatening to issue a writ of summons, and the bank has reported the overdraft. Insolvency proceedings are not an admission of failure - they are often the only way to save your business and your jobs. The only condition is that you act quickly and effectively.
A company director who fails to declare the cessation of payments within 45 days is liable to personal sanctions: disqualification from managing the business, personal bankruptcy, or even payment of liabilities if a management error has contributed to the shortfall in assets.
Our firm handles
- Analysis of your financial situation: assets available, liabilities due, date of cessation of payments, etc.
- Preparing and filing the declaration of cessation of payments with the commercial court clerk's office
- Representation at the opening hearing and relations with the official receiver
- Support during the observation period: relations with the court-appointed administrator, day-to-day management, financing, etc.
- Drawing up a recovery plan: repayment schedule, restructuring, job preservation, etc.
- Defending directors against liability claims (payment of liabilities, management ban)
Creditor: protecting your rights in the procedure
Your debtor has just been placed in receivership. As soon as it is published in the BODACC, a two-month countdown begins to declare your claim to the court-appointed representative. Once this deadline has passed, your claim is foreclosed. Your claim is no longer recognised as a liability and you lose all rights to payment under the procedure.
In addition to making the declaration, checking claims, contesting the insolvency plan and ensuring that the payment schedule is respected are all stages where the assistance of a lawyer makes a difference.
Our firm handles
- Filing claims on time: drafting, costing, supporting documents
- Contesting competing claims before the official receiver
- Defending your securities: liens, mortgages, pledges, sureties
- Participation in discussions on the recovery plan and negotiation of discounts
- Monitoring the implementation of the plan and taking action if the debtor defaults
- Legal remedies: appeal against the opening judgment, third-party proceedings
Safeguard, recovery, liquidation: the differences
| Backup | Turnaround | Liquidation | |
|---|---|---|---|
| Condition | Difficulties that the debtor is unable to overcome | Cessation of payments | Suspension of payments + recovery manifestly impossible |
| Who is asking | The debtor only | The debtor, a creditor or the public prosecutor | The debtor, a creditor or the public prosecutor |
| The manager | Remain at the helm | Assisted or replaced by the director | Transferred to the liquidator |
| Issue | Backup plan | Recovery plan or sale | Sale of assets and closure |
| Max. duration. | 18 months of observation + 10 years of planning | 18 months of observation + 10 years of planning | Variable (closing when assets liquidated) |
Buyout: acquiring a company in receivership
Court-ordered reorganisation can lead to a sale plan when the debtor is unable to continue the business. This is an opportunity for buyers to acquire a going concern, often at a lower price than the market price, with previous debts wiped out.
However, the operation requires rigorous preparation. The takeover bid must be submitted within the deadline set by the court, comply with the conditions set out in article L. 642-2 of the French Commercial Code and present credible commitments to maintain jobs.
Our support
- Identifying takeover opportunities (BODACC, contacts with receivers)
- Legal audit of assets: current contracts, commercial leases, intellectual property, security interests, etc.
- Drafting the takeover offer in accordance with legal requirements
- Negotiating with the court-appointed administrator and representing you in court
- Post-sale support: transfer of contracts, integration of employees, formalities, etc.
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