Estimated reading time (in minutes)
To avoid filing for bankruptcy, the company must quickly put in place safeguard measures . What are they ? Can the entrepreneur first enter into an amicable agreement with his creditors?
As soon as the company notices a fall in its cash flow, a difficulty with its customers and a poor flow of products, it must immediately take safeguard measures. To do this, the company must establish very precise accounts and determine the major backup point to be preferred. She must also call on a lawyer or a judicial administrator.
This measure is often the least restrictive because it allows the business manager to define the terms of payment himself. The business manager must call the creditors to a meeting to define the difficulties encountered, propose terms of payment over a period of less than 3 years, and impose regular payment deadlines (half-yearly or quarterly). This solution is interesting when the situation is not too serious. Indeed, in the opposite case, this can frighten the creditors who will have been aware of the significant difficulties of the company.
The ad hoc mandate:
The entrepreneur has recourse to a judicial administrator who submits a request to the commercial court to be appointed ad hoc agent. This brings together the largest creditors or categories of creditors, and offers them payment terms spread over 3 or 4 years at most. In case of agreement, a protocol is drawn up and signed by the creditors. It applies once it has been submitted to the court.
This procedure is submitted to the commercial court by way of a request presented by a judicial administrator. He will be appointed as conciliator. It brings together the creditors and proposes settlement terms spread over a period of less than 4 years. It also defines the categories of creditors affected by these terms. The conciliation ends with the signing of a protocol which is submitted to the commercial court. The court makes an order or a judgment that puts an end to the actions of the creditors. Those who have signed this protocol may be paid and those who have refused to sign may be obliged to execute it.
Backup and accelerated financial safeguard:
These procedures are recent and are based on a request submitted to the commercial court. A judicial administrator is appointed by the court and the entrepreneur is not divested. The court-appointed administrator brings together the creditors in different committees depending on the nature of the debts and submits to them a recovery plan defined with the business manager. Depending on the responses of these committees, the court can ratify the safeguard and render a judgment putting an end to it. He decides that the liabilities will be paid within 10 years maximum.
DAMY Law Firm , Nice, Filing for bankruptcy, Update 2022