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:

Being a director is not just about managing and controlling a business; it also involves taking on certain legal duties and obligations. Directors get the benefit of limited liability, but directors' duties impose certain obligations to ensure they act in the best interest of the company, its employees, shareholders – and in certain circumstances, its creditors too.

Restructuring and insolvency issues are rarely out of the news at the moment, with a range of businesses seeking to adapt to the challenges of a post-COVID-19 world. You might have seen stories about struggling businesses going into administration or liquidation, or securing a company voluntary arrangement (CVA).

R3, the association of business recovery professionals, has produced a Standard Form Covid 19 CVA Proposal and accompanying Covid 19 Standard Conditions.

The Standard Form proposals are intended for use by SME companies, in each of the jurisdictions across UK that have been affected by Covid 19, to save time and cost and make CVAs more accessible to them.

Winding up a company – liquidation – applies in circumstances where a company is unable to pay its debts. In that situation, the company's directors, creditors or contributories can present a winding up petition. (This can be found in sections 122, 123 and 124 of the Insolvency Act 1986.)

A company is deemed unable to pay its debts if:

The Coronavirus (Scotland) (No.2) Bill (the “Bill”) has been introduced by the Scottish Parliament today, 11 May 2020. The aim of the Bill is to respond to the financial impact the COVID-19 pandemic is having on individuals and small businesses (by that Scottish Ministers mean sole traders, not companies incorporated under the Companies Act 2006).

Recently, there have been a number of high profile insolvencies hitting the headlines with a number of High Street retailers entering insolvency either by proposing a company voluntary administration (“CVA”) or via another formal insolvency process. With the recent number of high profile insolvencies there has been scrutiny of directors’ duties not only by media but also at government level.