Home » AREAS OF EXPERTISE » Firms in difficulty

Firms in difficulty

What your lawyer can do for you when it comes to firms in difficutly

It is often in a rush, when a company is facing cash flow difficulties, that tensions grow in its relations with banks and suppliers.

In the very short term, your company is going to encounter difficulties, or your company is already experiencing difficulties, what are the solutions?

We help you, in complete confidentiality, to overcome your financial difficulties by choosing the solution best suited to your company. We accompany you throughout the procedures implemented to achieve your goal.

  • If you consult us from the outset, at the first sign of difficulties, this will allow us to anticipate and choose preventive measures, pre-insolvency procedures, measures available under French law, such as an ad hoc mandate or a conciliation.
  • We analyze the situation and make a diagnosis, to determine if your company goes into default (an important legal notion under French law).
  • Once this diagnosis has been made, we help you choose the procedure or strategy to be implemented.
  • We intervene alongside the company director whose responsibility may be sought and/or who may personally be held liable.
  • Tensions grow in your relationship with your creditors or your bank, you can no longer honor your loans, the bank wants to implement your guarantee,  we can assist you in negotiations with your creditors and the bank or in proceedings.
  • In the event of late payment of the sums you owe with respect to your social security and tax obligations, we help you present your case before the CCSF (Commission des Chefs de Service Fiscal) in order to obtain payment delays.
  • Your company is summoned to open insolvency proceedings by a creditor: we are here to assist you.
  • We are here to assist you and follow-up on the implementation of a discharge plan or any other solution, in direct contact with the administrators and/or judicial agents involved in the process.

You are interested in taking over a company in difficulty

We assist you in this takeover in order to prepare your offer.

  • We assist you and examine for you the elements communicated by the insolvency practitioner.
  • We take care of the drafting of the business purchase offer.
  • We defend the offer before the Court in charge of the collective proceedings.
  • We can take care of drafting all the deeds of assignment following the acceptance of your offer.

Your client is undergoing collective proceedings: ad'hoc mandate, conciliation, safeguard, receivership, judicial liquidation

We assist you in your efforts to optimize your chances of obtaining payment of your debt.

  • We take care of the necessary formalities for the declaration of claim.
  • We are analyze the feasibility of a procedure for claiming back the transferred materials.
  • We advise you on how to adapt your business relations with your client placed in receivership proceedings.

Company in difficulty,
how to address the situation?

How can I avoid that the bank implements my guarantee?

It often happens that a bank takes a guarantee with the manager in order to mitigate the risk of default when a company borrows money.

The company director who acts as guarantor himself, also called bank security, can be put in default to repay the loan in place of the defaulting company.

By consulting a lawyer sufficiently early on the difficulties experienced by his/her company, particularly before a situation of default, company directors will be able, for example in the context of a judicial safeguard procedure, to set up a safeguard plan to avoid any action by the bank with regard to the guarantor for the entire duration of the plan set up for the benefit of his/her company.

What should I tell the bank when they ask me to act as bank security?

When the bank sends you a registered letter with acknowledgement of receipt asking you to reimburse your defaulting company, you should, first of all, check the validity of the guarantee commitment form – presentational and substantive.

A possible disproportion of the commitments also needs to be considered.

The bank will have to initiate proceedings before the competent court and obtain a decision before being able to execute any request targeted at the company director.

This period allows the lawyer to exchange with the bank and possibly find an agreement, a transaction is then possible.

What do I do when the bank refuses to work with my company experiencing difficulties?

The bank blocks your company’s accounts or refuses to grant you longer payment deadlines or any other payment facilities, etc.

It is advisable to consult a lawyer in order to set up an amicable or legal procedure adapted to the situation, depending on whether your company is in a situation of default or not.

In this way, the bank’s action towards you can be suspended and you can even negotiate payment terms to spread out your business loans or overdrafts.

How to solve a cash flow problem?

In the context of the pandemic, cash shortfall can be resolved with a loan backed by the state, which must be applied for before December 31, 2020. In case of refusal of a loan backed by the state, by requesting ad’hoc assistance from the departmental committee on examining problems of business financing (CODEFI).

It is also possible to use confidential measures such as a conciliation or an ad hoc mandate. A conciliator is then in charge of negotiating with your bank contacts and your main creditors.

If the cash flow difficulties have become insurmountable due to a lack of more favorable payment facilities, it is possible to use collective proceedings (safeguard, receivership, or liquidation if necessary).

In any cases, a prior diagnosis is necessary in order to consider the next steps to be taken.

How can I pay my employees and social security contributions when my company is experiencing difficulties?

Be careful, this subject is sensitive because when you reach the point where you can no longer pay your employees at the end of the month, few solutions will present themselves. In many cases, only receivership or judicial liquidation can take place with urgent case processing by the AGS (the Association for the Management of the Employees’ Claims Guarantee Plan).

In order to avoid this, it is possible beforehand to manage the company’s cash flow by, for example, requesting payment deadlines not only from suppliers but also on social and fiscal charges from the CSSF (Commission of Tax Services Directors).

Who to contact when my company is experiencing difficulties?

You are facing or anticipating cash flow difficulties (this is better). You have several options when it comes to person you can contact.

Your accountant is a regular contact person who can warn you of cyclical or structural difficulties.

The DGFIP (Treasury Department of the French state) with the CSSF (Commission of Tax Services Directors) can grant you extended payment deadlines for your social and tax debts.

A lawyer specializing in this area will also be able to advise you with the benefit of an outside perspective on your business and its difficulties. You lawyer will also be able to quickly implement the necessary steps to recover your debts, which is sometimes the first and sometimes sufficient measure to put in place, and to refer the matter to the competent jurisdiction on a rush basis.

He/she will also assist you, if need be, in preparing and presenting your conciliation file, ad hoc mandate or safeguard mandate, receivership or judicial liquidation.

What to do when a customer or supplier is in trouble?

Swift action is needed.  That the “race for the prize.”  Often a company manager tries to hide the situation and put down fires by paying the most offensive creditors.

A formal notice from your lawyer can be very effective.

There are measures that allow you to seize your debtor’s accounts and obtain a court decision within a few weeks.

If your debtor is placed under receivership or liquidation, you will have to declare your claim to the court-appointed agent or liquidator.

You should make sure that the goods that remain in your debtor’s possession are claimed on the basis of a retention-of-title clause or in the presence a deposit.

Should I take a loan backed by the state (PGE)?

The PGE, State Guaranteed Loan, is a way to circumvent personal guarantees. Whatever the size or legal form of your company, you have until December 31, 2020 to present your request to your bank. A loan backed by the state can be interesting if you are facing economic difficulties, it can give your cash flow a second life.

Be careful, however, to prepare a forecast for the period during which it will have to be repaid.

If your bank refuses to grant your request, you can submit a file to the CODEFI (departmental committee on examining problems of business financing) for ad’hoc aid to support weakened companies’ cash flow issues resulting from the Covid pandemic.

On the other hand, if the difficulties you are experiencing are structural, a loan backed by the state will not be sufficient to remedy same.  Additional measures will then need to be taken in order to give a second life to your company, perhaps in the form of a conciliation, ad’hoc mandate, safeguard, or receivership. In short, you might have to consider restructuring your company.

What solutions can I find when my company loses revenue?

First, we have to find out why. Once the cause has been identified, determine whether the cause is structural or cyclical.

If it is cyclical, the company must seek resources mainly internally. If it is structural the company will have to be restructured (restructuring).

Choices will need to be made on the basis of a diagnosis and an inventory of solutions. Stopping payments, when supervised and advised to do so, will often be necessary as a first step.

How can I prevent my business from going bankrupt?

This expression is hardly used anymore, it has been replaced by voluntary receivership or liquidation (“dépôt de bilan” in French). In reality, filing for bankruptcy means putting the company into receivership or judicial liquidation.

Receivership can be a solution to save your company if it is not too late and if the causes leading to the difficulties experienced can be corrected.

A professional specializing in this area should be consulted as soon as possible. The number one indicator is the immediate cash flow and cash flow forecast.

What is the solution to turn my business around?

First of all, make a clear and fair diagnosis and not be afraid or ashamed to go and talk to professionals specializing in this area (lawyers for example) who are subject to professional secrecy and trained to deal with such situations.

Then address the difficulties according to whether they are structural or cyclical. The indicator is the existing and foreseeable cash flow.

The key word is how to anticipate a cash shortfall, how to deal with it, where to find resources inside or outside my company.

It could be envisaged to spread out the debts amicably without a third party, or with the help of a third party within the framework of confidential measures such as an ad hoc mandate, conciliation, or finally use the protection of a safeguard procedure or a receivership ordered by a court having jurisdiction over the matter.

Why call in a lawyer when my company is in trouble?

The role of a lawyer is complementary to that of an accountant. Your lawyer will focus his/her efforts on the cash flow problems and will be able to accompany and help the Company manager to take the necessary measures, including legal proceedings, which may be necessary.

A lawyer often has a fresh eye on the situation, which makes it easier to assess the situation.

In addition, tensions can grow in your relationship with your accountant when invoices remain overdue.  A lawyer can help restore a smooth relationship by organizing the payment of invoices owed to the accountant, who remains an essential supplier for the company’s turnaround (dashboards to be presented, certified situations, etc.)

Your team

The team is multidisciplinary, and we combine our skills
and experience because we have our clients’ best interests at heart.


Partner HR

+33 (0)2 41 25 37 05 contact

Master’s degree in Corporate Law

Admitted to the bar in 2001



+33 (0)2 41 25 72 68 contact

Master’s degree in Private Law

University of Paris II – Panthéon Assas

Admitted to the bar in 1993

Specialist in Commercial,

Business and Competition Law


Legal Practitioner

+33 (0)2 41 25 72 68 contact

Master in Health and Ethics Law


You wish to receive our newsletter