Aublé & Associés offers you a summary of exceptional measures in collective procedures.
Aublé & Associés was one of the first law firms to represent companies in difficulty in hearings held by videoconference before the Paris Commercial Court due to the COVID-19 crisis.
We accompany you in order to face the consequences of the current crisis (diagnosis of the situation, assistance in benefiting from governmental aid measures, assistance in your discussions or negotiations with any interested party (bank, lender, client, supplier, administration, etc.), opening of procedures to prevent difficulties, etc.). We also assist companies that wish to be accompanied in the takeover of assets or companies at the bar of the court.
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FLASH RESTRUCTURING - EXCEPTIONAL MEASURES IN COLLECTIVE PROCEDURES
Recognized for its ability to find innovative solutions and for its entrepreneurial spirit, Aublé & Associés has with Hugo Cosquer a recognized expertise in Restructuring and Distressed M&A. We are now in a position to offer our clients a complete range of services in transactional matters.
Thus, the firm has recently assisted companies in difficulty during hearings held by videoconference due to the COVID-19 crisis. Aublé & Associés assists you in dealing with the consequences of the current crisis (diagnosis of the situation, assistance in benefiting from governmental aid measures, assistance in your discussions or negotiations with any interested party (bank, lender, client, supplier, administration, etc.), opening of procedures to prevent difficulties, etc.). We also assist companies that wish to be accompanied in the takeover of assets or companies at the bar of the court.
In order to combat the COVID-19 epidemic, a state of health emergency has been declared until May 25, 2020 throughout the national territory (Law 2020-290 art. 4). Article 11 of this law authorized the Government to act by ordinance, and to take all measures " adapting the provisions of Book VI of the Commercial Code [relating to business difficulties] ... in order to take into account the consequences of the health crisis for businesses and operations" (Article 11-I-1 (d)). The following are some of the main measures resulting from Ordinance 2020-341 of March 27, 2020.
Measures relating to the determination of the state of cessation of payments and the opening of procedures for the treatment of difficulties (for companies whose cessation of payments would occur between March 12 and August 24, 2020, unless the state of health emergency is extended) :
- Assessment of the date of cessation of payments: this assessment is made with regard to the company's situation on March 12, 2020. For example, a company in a state of suspension of payments on April 10 will not be considered as such in the sense of the legislation as long as it was solvent on March 12, 2020. However, it should be noted that :
- This provision does not deprive the head of the company of the right to request the opening of receivership or liquidation proceedings. The new provision introduced by the ordinance is an option and the head of the company may not apply for the opening of the procedure, without incurring any liability (see below).
- This provision does not, however, deprive the Commercial Court of the possibility of postponing this date to an earlier date, pursuant to Article L. 631-8 of the Commercial Code, or to a later date in the event of fraud on the rights of creditors, without prejudice to the consequences of the nullity of the suspect period.
- This measure aims to encourage companies to take advantage of measures and procedures to prevent difficulties, such as conciliation and safeguard, during the period corresponding to the state of health emergency increased by 3 months, even in case of aggravation after March 12, 2020.
- Protection of the legal representatives of the company in difficulty: avoidance of prosecution and personal sanctions for not having declared during this period the state of cessation of payment of the company within the prescribed time limits.
- Traditional measures are maintained: if the debtor's financial situation worsens, the possibility is still offered to him to request the opening of a legal reorganization or liquidation procedure or to benefit from a professional recovery, with, in particular, the cessation of legal proceedings and the possibility of the assumption of salaries by the AGS under the usual conditions.
Measures relating to conciliation procedures:
- Automatic extension of the conciliation periods (article L. 611-6 of the French Commercial Code): for a period corresponding to the state of health emergency plus three months (i.e. until August 24, 2020, unless the state of health emergency is extended).
- The ordinance allows, by way of derogation, a second conciliation within 3 months of the previous one after March 12, 2020 and up to 3 months after the end of the period of the state of health emergency or in progress during this period.
- Exemption from the waiting period: during the same period, it is possible to have several conciliation procedures without having to respect the waiting period of 3 months.
Extension of the terms relating to safeguard plans (Article L. 626-12 of the Commercial Code) and recovery plans (L. 631-19 of the Commercial Code) (for a period until August 24, 2020, unless the state of health emergency is extended) :
- Two possible extension options:
- or at the request of the plan execution commissioner for a period corresponding to the duration of the state of health emergency plus 3 months,
- or at the request of the Public Prosecutor's Office, for a maximum period of 1 year.
- At the end of this period (i.e., after August 24, 2020) and within a period of 6 months (i.e., until February 24, 2021), the safeguard and recovery plans may be extended by a maximum of 1 year, at the request of the commissioner for the execution of the plan or the public prosecutor.
- These extensions of the duration of the plan are possible without having to " respect the constraining procedure of a substantial modification of the plan initially adopted "[1], i.e. without convening the debtor, the auditors, the employees' representative, or even, it seems, when the terms of payment of the claims are modified by these extensions, without convening the interested creditors.
Extension of the periods relating to the observation period, the plan, the maintenance of activity, and the duration of the simplified judicial liquidation procedure as well as the guarantees of the AGS (for a period going until June 24, 2020, unless the state of health emergency is extended):
- Duration of the observation period, of the plan, of the maintenance of the activity, and of the simplified judicial liquidation procedure: extension of 1 month following the end of the state of health emergency (i.e. until June 24, 2020)
- AGS guarantee periods: consistent with the extensions of observation periods, plans and periods of continued activity in judicial liquidation. This assumption of responsibility is also simplified, and is done upon transmission by the agent to the AGS of the statements of employee claims, without waiting for the intervention of the employees' representative and the official receiver.
Modification of the modalities of referral to and appearance before the commercial courts (for a period until June 24, 2020, unless the state of health emergency is extended) :
- Referral: the documents by which the debtor refers the matter to the court shall be submitted to the clerk's office by any means. The same applies to the claims and observations which are made in writing and communicated by any means.
- Communication: The same applies to the various organs of the procedure in their exchanges with the clerk's office or the court. Thus, communications between the clerk's office and the judicial representatives are made by any means. Decisions can be taken without a hearing.
