Newsletter - Turnaround Management Association

Août 2003
Newsletter
Mesdames, messieurs,
C'est avec plaisir que nous vous soumettons
le premier exemplaire de la newsletter de
la TMA France.
Lors de sa création il y a maintenant 15 années, la Turnaround
Management Association (“TMA”) avait pour objectif de fédérer
les professionnels du retournement d'entreprise aux Etats-Unis.
Aujourd'hui cet objectif a été atteint, l'association regroupant plus
de 5000 membres répartis en 28 “chapters” et étant devenu dans
l'intervalle l'organe de représentation de l'ensemble des acteurs
du marché des entreprises en difficulté.
Depuis quelques années, l'association a concentré ses efforts sur
son développement à l'international, des “chapters” étant successivement
créés au Canada, en Angleterre, et en Nouvelle-Zélande. Cette année,
la croissance s'est accélérée avec la création de trois nouveaux chapters,
en Australie, au Mexique et en France tandis que l'Allemagne,
les Pays Nordiques, la Chine et Taiwan ont posé leur candidature.
En France, force est de constater que nos professions restent méconnues
ou mal-connues. C'est pourquoi il nous est apparu utile de lancer
l'association afin de faire connaître mais aussi reconnaître
les professionnels que nous sommes. Les réactions et commentaires
que nous avons recueillis auprès des personnes invitées aux deux
premières réunions du 22 avril et du 17 juin, mais aussi l'intérêt
exprimé par les média et divers acteurs économiques nous confortent
dans notre initiative.
Cette newsletter est l'un des media que nous souhaitons utiliser
pour servir les objectifs de l'association, et je vous en souhaite
au nom du bureau de l'association, une bonne lecture.
Renaud Cormier
au site Internet TMA
www.france.turnaround.org/
TURNAROUND MANAGEMENT ASSOCIATION France (TMA France)
Sponsor de TMA France
Avec 5800 adhérents au niveau mondial
l'association dénommée “Turnaround
Management Association” (“TMA”) réunit
à travers le monde les professionnels
du retournement d'entreprise.
TMA a été à l'origine de la création d'associations
du même nom et relevant du même objet dans
d'autres pays. C'est dans ces conditions qu'une
association française, poursuivant les mêmes
objectifs est créée selon les mêmes principes
de fonctionnement que ceux de TMA.
Les dispositions suivantes sont directement
inspirées des statuts de la TMA.
Servir de forum de réunion des professionnels
des entreprises en retournement (“Turnaround”)
de toutes disciplines afin d'échanger
des informations, idées et connaissances
concernant le métier des entreprises
en retournement ;
Promouvoir des niveaux élevés de compétence
et mettre en place des méthodes reconnues
dans la gestion des entreprises en retournement ;
Favoriser les opportunités de développement
professionnel pour les praticiens des entreprises
en retournement, afin d'améliorer
les compétences nécessaires à l'exercice de
leur activité ;
Servir de lieu d'échange d'informations et
de connaissances intéressant les entreprises
en retournement ;
Promouvoir l'image de l'association et
de ses membres en tant que professionnels
possédant un haut niveau de compétence
en matière d'entreprises en retournement ;
Pour obtenir des informations sur les événements
en France, ou si vous souhaitez devenir membre
de l'association, veuillez contacter Fabrice
Keller au 01 55 61 02 48 ou envoyer un email à
[email protected]
FRENCH INSOLVENCY LAW:
OPTIONS AND PROBLEMS FOR FRENCH COMPANIES IN FINANCIAL DIFFICULTIES
Pour ce premier numéro de la Newsletter de TMA
France, nous vous proposons de découvrir ou
de redécouvrir un article paru dans le numéro
d’avril 2003 du “Journal of Corporate Renewal”,
et consacré aux difficultés de mise en place
d’une solution de retournement inhérentes à
la réglementation française.
Cet article a été préparé par Bryan Green
et Paul de Drée, associés chez Salans. Bryan Green
et Paul de Drée sont respectivement membres
de TMA UK et TMA France. Paul de Drée
intervienda lors de notre prochaine réunion
du 23 septembre.
The insolvency and liquidation of companies in France is governed by
Law 85 - 98 of 25 January 1985, as amended by Law 94 - 475 of
10 June 1994. These laws represented a major reform of French
insolvency regime; the aim was to promote corporate rescue as a
preventative measure to liquidation. The reform also placed much
emphasis on the protection of the employees.
This Article seeks to explain the options available to a French company
in financial difficulties, considering both pre-insolvency schemes and
the procedure once the company becomes “insolvent”, which is the trigger
for the commencement of bankruptcy proceedings. The particular
problems that employees pose for insolvent companies are discussed.
Finally, this article examines some recent decisions in the French
courts regarding the assignment of receivables in bankruptcy proceedings,
which are of particular interest and will give some insight into the
problems of funding potentially insolvent companies in France.
There are various options available to a company in financial difficulties
which has not yet been legally classified as “insolvent”; these are
supervised conciliation, unsupervised informal practice and formal
conciliation with a possible stay of creditors.
Under a supervised conciliation, a mandataire ad hoc is appointed to
supervise negotiations between the company and its creditors. The
mandataire ad hoc, who is appointed by the court, arranges a meeting
between the company and its principal creditors and negotiates an
arrangement appropriate for all the parties. This process does not allow
a stay of creditors; to achieve this the company must enter into a formal
conciliation (règlement amiable), and the conciliator is again appointed
by the courts. This would, however, inform the public that the company
has financial difficulties and this could have a further negative impact
on the company. Alternatively, the company is at liberty to enter into
unsupervised arrangements with its creditors, which allows a company
to make any arrangements it believes necessary for the survival of the
company. This does present some risks though: lenders could be liable
for any increases in another creditor's liability if they provide additional
funding when the company is technically insolvent (soutien abusif) and,
as in the UK, any recent financing could be set aside as a voidable
preference.
If pre-insolvency schemes fail or are not implemented, the companies
can turn to the insolvency procedure. The procedure will depend on the
size of the company; it is simplified for small companies. The procedure
a company must follow depends on its turnover and the number of
employees.
There is a three stage procedure for the larger companies:
1) Commencement of bankruptcy proceedings:
Proceedings are initiated when a company is no longer able to pay
its liabilities as they fall due; this is the so-called cessation
des paiements, the triggering event for insolvency. The petition
can be from the management of the company, its creditors, the Public
Prosecutor or the court of its own accord.
2) Observation period:
the economic and social elements of the company are monitored
to assess whether the company should be rescued, sold or liquidated.
This task is done by the administrator who is appointed by the court
and runs the business throughout the observation period. At the end
of the observation period (usually no more than 6 months but could
extend to 20 months) the administrator issues a report with his
opinion as to the future of the company. The court will decide the
level of involvement the administrator will have in the management
of the company; the court may order that the administrator simply
supervises the managers or shares or replaces the management.
The court may order that there is no observation period if it is
immediately obvious that there can be no recovery and the company
will be put straight into liquidation. Alternatively, the observation
period can at any time be ceased and the company put into liquidation.
3) Period of implementation:
This will implement the action plan decided at the end of the
observation period; the available options are the sale of the business
(as a going concern or on an asset basis), liquidation or implementation
of a recovery plan.
As in the UK, all claims against the company are suspended as from the
date the bankruptcy proceedings commenced; creditors must submit their
claims to a creditors' representative, who is appointed to represent all the
creditors, within two months of the advertisement of the notice of the
order in the Gazette. Any foreign creditors have four months to do so.
The court will fix the terms, conditions and duration of any recovery plan
proposed in the administrator's report and will appoint a commissaire
à l'exécution du plan who will supervise and implement the recovery
plan. Unless the creditors agree to waive or reduce their claims against
the company, the recovery plan must provide that all the company's debts
are paid in full. If the company fails to adequately perform the plan,
the company can be put into liquidation.
The company remains a legal entity throughout the liquidation process;
it has the power, through the liquidator, to do all acts for the purpose
of the liquidation, retain its assets, liabilities and name. The liquidator's
duties are to realise the assets of the company, satisfy the creditors and
pay any surplus to shareholders. The distribution of assets in the French
insolvency proceedings is very interesting; employees are generally the
first creditors to be paid, above the costs and expenses of the winding-up.
In the opinion of the author, dealing with employees in financially troubled
companies is the greatest barrier to successfully turning around a failing
company. Most failing businesses are over staffed and require drastic steps
to reduce the head count and such action needs to be taken quickly.
As described below, dealing with staffing issues in bankrupt companies
is a time consuming, slow and expensive process.
France gives the highest priority to employees on the liquidation of a
company. Within 10 days after the declaration of bankruptcy or the
initiation of the liquidation proceedings, the administrator must pay
the employees' salary for the 60 working days preceding the declaration
or initiation of proceedings. This payment, with certain exceptions,
ranks above any payment to secured creditors and even above the costs
of the liquidation. In a large company, this requirement may prevent
any recovery plan being implemented, since the payment of salary will
absorb a large amount of the money available for use by the company.
If the company is being sold, the court's principal concern is to ensure
that most of the employment contracts are continued. This interest ranks
ahead of the need for the company's ability to repay its creditors.
This aim is facilitated by the creation of a Works Council or, for a smaller
firm, an Employees' Delegate. On the commencement of bankruptcy
proceedings, an Employees' Representative is appointed to represent
the interests of the employees throughout the proceedings. The typical
role of the Employees' Representative in the bankruptcy proceedings
include:
Right to be consulted on a petition for bankruptcy, the administrator's
report at the end of the observation period and any redundancies;
Right to ask the managers for an explanation of the facts which
significantly affect the economic status of the company;
Approval of the employees' claims for salary, which is drawn up
by the creditors' representative.
Administrators do not have an automatic right to make redundancies
during the observation period; this can only be done with the consent
of the supervising judge and where they are urgent and cannot be avoided.
The Employees' Representative must also be consulted.
Lender issues
Not only is it difficult to deal with employees in insolvent companies,
but funding the companies is also difficult in light of some recent
decisions of the French courts, which began with the decision of the
Commercial Chamber of the French Supreme Court dated 26 April 2000.
This was a controversial decision concerning the transferability of
receivables in bankruptcy proceedings. It reversed the common position
believed to exist by most lawyers in France. However, two recent cases
have cast doubt on this decision.
Prior to the decision on 26 April 2000, most French lawyers understood
that title to receivables arising from continuous agreements (i.e. where
the obligation in the agreement is performed over a period of time)
vested in the payee of the receivables at the date of signing the agreement,
even though the receivables were to be generated by the future performance
of the agreement. Therefore if the payee assigned the receivables,
ownership of them would be passed to the assignee at the date of the
assignment and any bankruptcy proceedings against the assignor would
have no effect on the bankrupt's right to obtain payment.
On 26 April 2000, the Commercial Chamber of the French Supreme
Court held that on the bankruptcy of an assignor of receivables arising
from the performance of a continuous agreement, the assigned debtor must
pay the assignor, not the assignee, the receivables arising in the performance
of the agreement notwithstanding that the assignment agreement was
executed prior to the opening of the bankruptcy proceedings.
What are the consequences of this decision?
The assignment of receivables is no longer an enforceable security
or payment means.
The judgement did not make it clear if, in the case of a receivable
due and payable prior to the commencement of the bankruptcy
proceedings, the assignee was able to obtain payment for the
assigned debtor.
The decision was not welcomed in France. It meant that an assignee
cannot enforce its rights against the assigned debtor but must simply
file a claim as a creditor in the assignor's bankruptcy proceedings. If
the assignment was used as a payment means, the assignee risks belated
payment and the possibly of not recovering all, or any, of the debt,
especially as employees are paid first. If the assignment was used as
a security, the assignee would become an unsecured creditor.
However, there have been two further decisions affecting the above case.
The decision of the First Civil Chamber of the French Supreme Court
dated 20 March 2001 disagreed with the Commercial Court. It decided,
indirectly, that any assignment of receivables resulting from agreements
not yet performed is final and the opening of bankruptcy proceedings
against the assignor does not grant any right to the assignor on the
assigned receivables. This decision concerned receivables assigned
pursuant to the French Civil Code whereas the Commercial Court
decision was based on the loi Dailly, but we do not see that this legal
difference should affect the different judgements.
A decision of Chambre Mixte of the French Supreme Court dated
22 November 2002 has affirmed the First Civil Chamber decision. It
was held that title to the receivables resulting from continuous agreements
arise at the time of executing the agreement and not at the maturity
date of each receivable. The position therefore reverts to that which
most legal commentators understood prior to the Commercial Court
decision. This is good news for lenders who include assignment of
receivables in their security package. We await a decision by the
Commercial Chamber of the French Supreme Court to reverse its
position in confirmation of the later judgements.
Lenders face numerous difficulties during the bankruptcy proceedings:
Security for lenders can be difficult to enforce, especially if the
security is in the form of an assignment of receivables. Ranking
behind employees and state creditors severely restricts lenders
ability to enforce security.
The observation period means that lenders are frozen out for a
possible 6 months or more while the administrator decides the
future of the company.
Existing shareholders and related parties are not permitted to
purchase the company, as in England which means that often no
purchaser can be found and the company must be wound up.
Success is questionable
Although the French insolvency regime places great emphasis on the
recovery of companies in financial difficulty, some figures suggest
that it is not always successful. One author states of all those companies
which file for bankruptcy proceedings 90% result in liquidation and
80% go straight into liquidation and bypass the observation period.
Therefore, despite the legislation providing for various recovery
mechanisms French companies in financial difficulties do not have a
bright future, and the reformed legislation has not achieved all it could.
The necessity of paying employees must have some part to play in
the inability of companies to implement a recovery plan. Certainly,
the debate in the courts regarding the transfer of receivables has not
encouraged recovery plans, as lenders remain wary of losing their
security or their payment. It seems therefore that reform is required.
Reform has been proposed quite recently in areas such as pre-insolvency
rescue methods and the supervision of recovery plans. However, the
general election in 2002 put these plans on hold and nothing further
has been announced.
Authors:
Bryan Green, partner at Salans,
London
Paul de Drée, partner at Salans, Paris
assisted by Jill Kirkwood
BPI, sponsor et partenaire privilégié de TMA France
Créé en 1984, BPI est l'un des premiers groupes de conseil opérationnel pour la conduite
du changement.
BPI intervient sur trois champs d'action : conduire les restructurations, piloter les transformations
internes, et accompagner les trajectoires individuelles.
Avec plus de 2000 références dans tous les secteurs d'activité, BPI occupe une position de
leader en Europe avec 800 consultants et 50 bureaux dans 9 pays.
TMA dans
Option Finance
Les Echos
Option Finance
La lettre de l'expansion
La lettre de l'expansion
du 21 avril 2003
du 22 avril 2003
du 2 juin 2003
du 6 juin 2003
du 30 juin 2003
TMA France
Principes d'adhésion :
- Les membres de TMA France sont membres de plein droit de TMA International.
- Les inscriptions sont à effectuer auprès de TMA France.
Les avantages attachés au statut de membre :
- Participation aux événements de TMA France (conférences, soirées, cocktails)
- Inscription dans l'annuaire mondial des membres, et abonnement à l'annuaire - Abonnement au mensuel “The Journal of Corporate
Renewal”
- Accès à la totalité des ressources du site www.turnaround.org
- Possibilité d'inscription dans des conditions préférentielles aux conférences internationales
Montant de la cotisation annuelle :
La cotisation annuelle à TMA France a été fixée à 300 Euros (sur ce montant, l'équivalent de 275 dollars américains sont reversés à TMA
International au titre de la cotisation à cette dernière).
Procédure d'adhésion :
Les éléments suivants sont à fournir :
- Fiche d'inscription remplie (1)
- Déclaration de non condamnation (1)
- Photocopie recto-verso d'une pièce d'identité
- CV (il peut s'agir d'un CV résumé en quelques lignes)
- Chèque de 300 Euros libellé à l'ordre de TMA France
(1)
Formulaires à demander à Fabrice Keller (01 55 61 02 48) ou à Blandine Drouineau (01 55 61 80 83).
Pour tout renseignement relatif aux adhésions à l'association, veuillez contacter Fabrice Keller au 01 55 61 02 48
(email : [email protected]) ou Blandine Drouineau au 01 55 61 80 83.
aux nouveaux membres
Antonio
Pascal
Eric
Christopher L.
Frédéric
Hélène
Thierry
Claude
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Patrice
Paul
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Claire
Fabrice
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Ralph
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Laurent
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Alvarez & Marsal Europe
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Claude
Denis
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Olivier
Derrick W.
Masseron
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BuyOut Data Systems
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BPI
Banque Delubac
Michel
Gilles
Claude
Rességuier
Roland
Rosevègue
Prosphères
Transition and Turnaround
APAX Partners SA
SDVE - Parisud Enchères
Skadden, Arps, Slate, Meagher & Flom LLP
Allen & Overy
SCP Bachelier - Bourbouloux
IDIA Participations
Zalis
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World Executives
Deloitte & Touche
Euro Sales Finance
Salans & Associés
SGAM
The Royal Bank of Scotland
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Director
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Administrateur Judiciaire
Directeur d'Investissements
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Partner, head of Restructuring practice
Directeur Associé
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Chargé d'Affaires
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Venture Capital & Corporate
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du bureau
Stirling
Renaud
Eric
Fabrice
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Anker
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Dailey
Keller
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Ronsain
Sorensen
NIM Interim Management
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BPI
EY Law
Directeur Associé
Senior Manager
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Director
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Avocat Associé
Marc ROCHET, ex-Président du Directoire d'AOM,
le 22 avril 2003
Monsieur Marc ROCHET, manager de transition, nous a fait part de son expérience et des enseignements qu'il a tirés des deux opérations
de retournement de la société AOM.
En opposant ses deux interventions, Marc ROCHET a souligné l'importance de la prévention et de la communication, en période de crise.
Xavier COTEREAU, ex-CFO Brandt, Groupe Brandt-Moulinex,
le 17 juin 2003
Xavier COTEREAU nous a décrit les circonstances ayant conduit le Groupe Brandt-Moulinex au dépôt de bilan, la façon dont s’est
déroulé la procédure de redressement judiciaire et l’aboutissement de celle-ci.
En particulier, l’intervention de Xavier Cotereau nous a fourni un éclairage pratique sur la façon dont un redressement judiciaire est vécu
“de l’intérieur”.
Thomas KEMORGANT, AT Kearney, atelier débat “Entreprises en difficulté, le manque d'investisseurs en capital, fatalité
ou opportunité”
Thomas Kermorgant pose le constat : les entreprises en difficulté attirent moins de 2% des investissements en capital! Pourtant,
les opportunités existent, les équipes souvent constituées, alors que ces opérations restent difficiles à financer.
Une lueur d'espoir cependant : les TRI moyens des LBO n'étant guère supérieur aujourd'hui aux rendements des marchés actions,
les investissements dans les opérations de retournement pourraient constituer à terme un segment de marché à développer pour le capital
investissement. A bon entendeur...
TMA France
Réunion du 3e trimestre
Mardi 23 septembre 2003 - 18h
Sponsorisée par BPI
Organisée chez Groupe Médéric
21, rue Laffitte - Paris 9
2003 Annual Convention
du 8 au 11 octobre 2003
(San Fransisco, CA)
(Plan d’accès sera transmis avec l’invitaion)
2004 Spring Conference
du 10 au 13 mars 2004
(Dallas, TX)
TMA Angleterre
Conférence annuelle
Mercredi 24 septembre 2003
2004 Advanced Education Workshop
Juin 2004
(Toronto, CA)
TMA France
Conférence annuelle
Mardi 9 décembre 2003
2004 Annual Convention
du 15 au 19 octobre 2004
(New York, NY)