Companies in difficulty: the rules change in the face of an unprecedented wave of bankruptcy filings

The Council of Ministers examined on Friday an ordinance which relaxes the rules for companies in difficulty. Business leaders will have a period of up to three months after the end of the health emergency to declare themselves in default of payment. The procedures can be done online during the period of closure of the commercial courts.

Like the other courts, the commercial courts have been closed since mid-March.

They too are seeing the wave rise, not of patients with the Coronavirus, but that, which will come in a second step, of companies brought down by the containment measures. Business restructuring professionals expect serial bankruptcy filings, despite government measures to preserve the cash flow of VSEs and SMEs. “This is out of all proportion to the 2008 crisis. This time, the entire economy has come to a halt: tourism, catering, industry…. I find it difficult to understand at this stage how companies will succeed in passing this test ”, testifies Catherine Poli, judicial administrator.

According to a survey published by the Association pour le Retournement des Entreprises (ARE), which questioned 250 professionals (lawyers, court administrators, consultants), 85% of them noted an increase in their activity under the effect of the Coronavirus crisis. Unsurprisingly, it is in the catering, hotel and events sectors that they are most in demand.