Liquidations, adjustments: procedures on the rise at the Montpellier commercial court

Les juges et les représentants du parquet, lors de cette rentrée solennelle. Midi Libre – JEAN-MICHEL MART

Les procédures collectives, les liquidations et les redressements judiciaires ont été en hausse de 37 % l’an dernier par rapport à 2022. Les secteurs du bâtiment et de la restauration ont été les plus touchés par ces démarches.

The commercial court closed its 2023 judicial year with increased overall activity. These trends presented this Thursday during the solemn re-entry of the commercial jurisdiction reflect the difficulties encountered by the local economy, affected by the consequences of global conflicts, the rise in the price of energy and raw materials.
In terms of company creation, the results show a decrease of 6.6%, for the first time since 2020. Litigation is also up by 10% with 884 cases registered in 2023 for an average judgment time of less than 10 months. 

"Let's avoid catastrophism" 

But it is naturally the collective procedures, safeguards, reorganizations and judicial liquidations which best demonstrate the cyclical fragilities of the Montpellier economy. Last year was marked by a 35% increase in this activity, or 839 files recorded. "An increase of 18% compared to 2019, the reference year" specifies the president of the court, Nadine Baptiste. These procedures mainly concerned the construction and catering sectors. "The slowdown in the number of procedures, totally artificial, which had characterized the period of the health crisis is now well over, without us witnessing a wave of business failures, let's avoid to catastrophize" insists Nadine Baptiste, however. 61% of registered collective procedures concerned company liquidations (513 cases). "I know that the economic situation is difficult, certain sectors are changing their economic models but we salute the actions of business leaders to face these challenges" continues the manager.& ;nbsp;

Renegotiate state-guaranteed loans

To prevent these painful outcomes, entrepreneurs have therefore resorted more massively to ad hoc mandate and conciliation procedures, an increase of 153%. "This increase comes, in part, from requests for renegotiations of the repayment period of loans guaranteed by the State, which in certain cases to secure the system, are the subject of ’ a conciliation" further specifies the commercial court which emphasizes the interest of these preventive steps: "the chances of success of a collective procedure are notably lower (75% adjustments go towards liquidation) than that of an amicable procedure (75% are a success, moreover for amicable procedures confidentiality is guaranteed by law.
This policy of mediation and alternative dispute resolution will be implemented again and strengthened by the commercial jurisdiction in 2024. They "are valuable tools that help to relieve the burden on the court while promoting consensual solutions and sustainable" refers to Nadine Baptiste. 

In 2023, the court's 50 judges will have rendered more than 12,000 decisions.

Internships for “forgetful” entrepreneurs

Irregularities. As a preamble to Nadine Baptiste's intervention, deputy prosecutor Laurent Nekkar insisted on the need for entrepreneurs to submit their accounts annually… A very widespread irregularity which concerns nearly 3,000 companies according to the magistrate. To remedy this, the prosecution launched «courses of alternatives to prosecution», six sessions for which 68 entrepreneurs were summoned. «And in 2024 this will continue» said Laurent Nekkar. 

Sanctions. In 2023, the prosecution made 43 requests for sanctions (management bans or personal bankruptcies) against ;rsquo;unscrupulous entrepreneurs. The same year, four convictions in financial sanctions were taken against managers which represented a total amount of 1.7 M€.

I subscribe to read more