Assisting companies in difficulty
Delubac Restructuring Banking, Banque Delubac & Cie’s legal banking activity, operates in the very specific legal framework of assisting struggling businesses (preliminary bankruptcy and insolvency proceedings), which covers the whole period of the business’s difficulties.
Preventive procedures
Ad Hoc Mandate
The ad hoc mandate is a preliminary bankruptcy and confidential proceeding intended for companies in difficulty.
Through this means, the temporary difficulties encountered by the business can be settled amicably by promoting dialogue between the business and its creditors.
For businesses that are not found in a situation of insolvency, its implementation provides for the appointment, by the Commercial Court, of an ad hoc receiver, who is appointed for a period of three months which may be renewed.
His/her mission ends with the signing of agreements between the creditors and managers.
Conciliation
This confidential and amicable procedure is ordered by the President of the Commercial Court and at the express request of the company director
If the President of the Court accepts the request, a Conciliator will be appointed, most often an insolvency practitioner to negotiate with the creditors. The goal is to reach an agreement which will be recorded and/or approved by the President of the Commercial Court.
Insolvency proceedings
Safeguard
Safeguard is an insolvency procedure whose objective is to temporarily protect the struggling business from the pursuit of its creditors in order to allow it to carry on its activity, get reorganised and thus settle its debts.
Opened by the Commercial Court, at the company’s request, on condition that it is not insolvent, these proceedings begin with an observation period of up to 6 months, renewable once (except an exceptional extension of up to 6 additional months, upon request by the Public Prosecutor’s office).
Two major things occur within this observation period: first, an Economic and Social Balance Sheet can be drawn up; second, a business continuation plan is developed that sets in particular the terms of settlement of liabilities and the level of employment.
During the entire observation period, the business’s liabilities are frozen. At any time, if the business is found in a situation of insolvency, the court may convert the safeguard into receivership
Receivership
Receivership proceedings kick off when the business becomes insolvent (<45 days), i.e., when it is unable to meet its current liabilities with its available assets and no longer has any credit reserves.
The purpose of these proceedings is to enable the business to carry on its activity, maintain employment and settle its debts. The order opening receivership proceedings designates the bodies which will be responsible for assisting, making or applying the decisions taken by the Court: insolvency practitioner, court-appointed receiver, official receiver, and controllers.
The receivership proceedings begin at the end of an observation period of up to 6 months, renewable once, except exceptional extension of up to 6 additional months (at the request from the Public Prosecutor’s office).
Two major things occur within this observation period: first, an Economic and Social Balance Sheet can be drawn up; second, a business continuation plan setting in particular the terms of settlement of liabilities and the level of employment can be developed. During the entire observation period, the business’s liabilities are frozen.
Based on the situation of the business, these proceedings will result in either a:
Continuation plan
A continuation plan, if the court considers that the debtor can repay the debts over a period not exceeding 10 years. The continuation plan involves the establishment of procedures for settling the liabilities (moratorium, reduction or rescheduling of debts) and the structural reorganisation of the business with possible lay-offs. The draft continuation plan is established with the collaboration of the insolvency practitioner or by the manager if there is no IP.
A disposal plan
If the business’s liabilities are considered to be too high, a business disposal plan can be decided. This procedure makes it possible for third parties to file offers to take over the business in receivership or safeguard. Its objective is to preserve as many jobs as possible and to ensure payment of creditors (in part or in full) with the amount of the disposal.
Compulsory liquidation
Liquidation by decision of the court can be implemented if there is no hope of recovery, with in some cases, continuation of the activity (duration fixed by law). The procedure is initiated by the officer/partner/manager by making a request to the Commercial Court under whose jurisdiction its head office falls. It aims to realise the assets of the business and to purge the liabilities of debtors. The result is immediate payment of unmatured receivables.
Our services for businesses in difficulty
Temporary administration
When a manager is no longer able to make decisions, the Commercial Court may be required to appoint a temporary administrator. This protective measure can be implemented if the manager becomes totally or partially incapacitated, for a fixed or indefinite period.
Voluntary liquidation
In principle and with no action taken by the court, voluntary liquidation is implemented within the framework of a cessation of activity and closure of a solvent business according to the will of the shareholders.
Preparing for bankruptcy
Delubac Restructuring Banking can offer its services, acting ahead of an amicable or legal procedure and this, as soon as the business encounters difficulties, to give it every chance to carry on its activities.
