1. State of the Restructuring Market
1.1 Market Trends and Changes
State of the Restructuring and Insolvency Market
There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).
Fewer Insolvencies for More Opportunities
At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:
Three years ago, the Commercial Code amended the procedure for declaring debts in France with the aim of simplifying the management of insolvency proceedings.
Before this reform, the only way for creditors (excluding employees) to declare their debts was to send their proof of debt to the receiver within 2 months (or 4 months for those living outside France) from the publication of the judgment opening the safeguard procedure, adminstration or liquidation – or be debarred.
On July 6-7, 2017, Craig Jalbert, in his capacity as Trustee for F2 Liquidating Trust, filed approximately 187 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code (depending on the nature of the claims). In certain instances, the Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.
Il y a trois ans déjà, l’ordonnance du 12 mars 2014, conçue dans le but de « simplifier » la gestion des procédures collectives, est venue modifier la procédure de déclaration des créances.
Avant cette réforme, les créanciers (hors salariés) devaient adresser leur déclaration de créances au mandataire judiciaire dans un délai de deux mois (quatre mois pour ceux résidant hors de France Métropolitaine) à partir de la publication au BODACC du jugement ouvrant la procédure de sauvegarde, de redressement ou de liquidation judiciaire, sous peine de forclusion.
On June 15, 2017, Curtis R. Smith, as Liquidating Trustee of the Hastings Creditors’ Liquidating Trust, filed approximately 69 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. The Liquidating Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.
On June 13, 2017, The Original Soupman, Inc. and its affiliates (collectively “Debtors” or “Original Soupman”) commenced voluntary bankruptcy proceedings under Chapter 11 of the Bankruptcy Code. According to its petition, Original Soupman estimates that its assets are between $1 million and $10 million, and its liabilities are between $10 million and $50 million.
As 26 June 2017 approaches – the date of entry into effect of the Recast EU Insolvency Regulation (2015/8484/EU) – we look in detail at the new provisions for co-ordinating the insolvency proceedings of members of a pan-European group of companies and consider whether the new proposals for co-operation will be compulsory, the practicalities of who will pay the co-ordinator’s fees and whether the creditors can have a say in the process.
BACKGROUND
On May 17, 2017, GulfMark Offshore, Inc. (“GulfMark” or “Debtor”) filed a voluntary petition for bankruptcy relief under chapter 11 of the Bankruptcy Code in the United States District Court for the District of Delaware.
Starting on April 28, 2017, Craig R. Jalbert, as Distribution Trustee of the Corinthian Distribution Trust, filed approximately 122 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548, 549 and and 550 of the Bankruptcy Code (depending upon the nature of the underlying transactions). The Distribution Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.