Do you know that you can now negotiate your next maturities while you are still solvent?
Until now, the law only allowed access to pre-insolvency proceedings (a negotiation with creditors prior to insolvency proceedings) to those who were in a situation of current or imminent insolvency (i.e. those who already had difficulties in meeting their payment obligations on a regular basis or would have difficulties in the next three months). However, pre-insolvency proceedings are now allowed when it is objectively foreseeable that, otherwise, the company will not be able to meet regularly the obligations due in the next two years.
In order to anticipate this, it is important to analyse the company’s balance sheets and make a projection into the future with different scenarios of rising costs or interest rates that allow the situation to be assessed with the help of a specialist expert in the field. If it is likely to run into difficulties in the future, it is time to act.
The restructuring plan
If you find yourself in this situation, the reform of the Insolvency Act allows you to notify the judge of the opening of a three-month negotiation period (extendable for a further three months), during which you must try to reach an agreement with your creditors on the changes that will enable you to reorganise in order to meet your obligations. The interesting thing is that, if the restructuring plan is approved – generally more than two thirds of each class of creditors are required to accept it – its effects will also be extended to creditors who have not accepted it (including partners), subject to judicial approval.
This plan may consist of modifying terms and interest, converting the debt into participating credits, shares or participatory credits, modifying guarantees and even disposing of assets. And while labour credits are excluded (except for senior management contracts), it is possible to include public credit in the negotiation, subject to certain limitations.
Our advisors will assess your current financial situation and, if necessary, accompany you in negotiating and drawing up a restructuring plan to enable you to reorganise.