Judicial reorganization is managed by a referent court. During the observation period, it must make it possible to adopt the measures necessary for the business survival. The reorganization plan can be put in place when it is deemed that the company is able to remedy the situation. This plan cannot exceed 10 years, unless the debtor is a farmer. In this case, the plan can have a duration of 15 years.
If it is felt that the business is unable to survive, this plan may alsoi organize its total or partial transfer.
The reorganization plan can have different purposes:
- the continuation of the company's activity
- The maintenance of employment
- debt clearance
- the total or partial sale of the company
Persons appointed by the court are in charge of its proper implementation and execution. The judgment must also appoint a commissioner for the execution of the plan and define the duration of the plan. It is also at this time that the deadlines and discounts already accepted by certain creditors are specified. In short, all the means put in place in the plan of legal redress to re-establish the business are recorded during the judgment.
A business continuation plan
When the company has serious chances of survival, this recovery plan aims toensure the continuation of its activity.
The reorganization of the company is also included in the recovery plan. The receivership plan determines the possibilities and modalities of activities and the possible means of financing.
Indeed, the latter also has for objective the settlement and clearance of debts and the conditions for continuing the activity. The financial situation of the company must not deteriorate. This is why the rights of creditors are frozen and their recognition is strictly regulated. The company benefits from a renegotiation of its debts.
To sum up, we can say that this plan contains a economic component aiming to ensure the sustainability of the company, a financial aspect who must ensure the settlement of the company's liabilities, and a social component, aimed at reducing employee contributions in order to allow it to be rectified.
The sale of the company
The sale of the company, partial or total, can be decided if the plan (s) proposed or implemented appear insufficient.
The company can be sold partially or totally to a buyer. In this case, this new leader injects funds so that the company continues its activity.
The court, after having fully examined the balance sheets and the situations, concludes whether this cession is possible. It also defines the period after which the takeover offers must reach the administrator and the liquidator.
The receivership plan and jobs
One of the objectives of this reorganization plan is here job preservation. However, if the economic conditions are not met, the plan may also plan layoffs. In this case, the plan must justify them as being essential to the survival of the company.
The number of redundancies required and the nature of the positions affected are indicated during the judgment setting up the reorganization plan.
In the event of a business transfer, employees who are not made redundant are automatically employees of the new manager.
The end of the recovery plan
If the company is reorganized, the court notes it and puts an end to its reorganization plan. In the event that the plan has not been respected (for example in the case of non-payment of a debt), the execution auditor may proceed to a judicial liquidation.
