Arst Avocats designed this mini-series to give you an inside look at a judicial reorganization procedure.
By Morgan Jamet, Partner Attorney — Insolvency Law
Published on August 22, 2026
The day before the hearing, an unexpected call: the lessor's counsel. "My client would prefer a settlement rather than arguing about replacement value." I wasn't surprised—the termination indemnity clause was too clear to hope to convince a bankruptcy judge otherwise. We agreed, in a single conversation, on an amount close to what we ourselves had calculated. A debt settled before even entering the bankruptcy judge.
Before going in, let's take a moment in the hallway to put the figures into perspective. Taken together—the outstanding bank loan balance, the disputed supplier debt, the lease payments before the transaction, the lessor, the social security contributions before adjustments—the declared liabilities of Établissements Dupont that year were, for all intents and purposes, almost equal to the company's annual turnover. This isn't a minor accounting detail. It's the sheer scale that explains why a simple business continuity plan can't be drawn up overnight: it's not a handful of overdue invoices that need to be spread out, it's an entire year's worth of business activity that needs to be transformed into ten, or rather eight, years of repayments.
The judge-commissioner's office is nothing like the deliberation chamber—a smaller room, one file per case, a discussion more technical than solemn. The trustee is there, with the statement of claims he's keeping. And, in the corridor, a presence that doesn't escape Marc's notice: the building materials supplier, there to defend his own disputed claim—the same man who, for the past few weeks, has also been monitoring the proceedings. "He's wearing both hats at the same time," Marc whispers to me, half-bitter, half-amused.
First, the landlord. I reiterate the argument already presented to the trustee months earlier: the offset he applied to the security deposit was not permissible, as the lease continued without having been terminated. The supervising judge follows this reasoning without undue hesitation: the landlord's claim is admitted for the rent actually owed, excluding any offset. The security deposit remains intact—which also eliminates the risk of having to replenish it later, during the course of the plan.
Then the supplier. At this point, the debate takes a different turn. It's not a question of calculation or a misapplied clause—it's a fundamental disagreement, concerning the very conformity of the delivered goods, which each party continues to assert in their own way, without any evidence truly resolving the issue in just a few minutes. The supervising judge listens to both versions, then issues a reasoned order from the bench: he declares himself incompetent to rule on a dispute that raises, in his own words, "a serious difficulty" exceeding his powers. But the order doesn't stop there. It designates, by name, who must act: the supplier—the plaintiff seeking the admission of his own claim—has one month from the notification of this order to file his claim with the competent court. If he fails to do so within this period, his claim will be simply time-barred.
As I was leaving, I took the time to explain to Marc exactly what this meant in practice. "Does that mean he has to take the initiative himself?" Exactly. It's not up to Établissements Dupont to initiate proceedings to resolve this commercial dispute. It's the supplier, and only the supplier, who must file a claim with the court within one month, otherwise their claim will be dismissed. "So if they do nothing…" their claim will never be accepted. This reversal is significant: it shifts the pressure. A supplier who has to initiate legal proceedings against one of their clients—even a struggling one—might very well prefer a quick settlement to an uncertain trial. It's not a done deal. But for the first time in this case, it opens a real window for negotiation, initiated by the other party.
Finally, the URSSAF (French social security agency) no longer poses a problem: the payslips and actual declarations, produced in the meantime, bring its flat-rate assessment back to the correct amount. A simple update, without any debate.
As we leave, Marc does his sums, just like me. "So that's settled, for the lease and the lessor. And for the URSSAF (French social security agency). Only him remains—and it's up to him to take action now." The supplier, indeed—the one who, just a few weeks ago, obtained the right to closely monitor the development of the plan on which the fate of his own claim partly depends, and who must now decide, within the month, whether he truly wants to pursue his dispute to court. "It's not the most comfortable situation," I concede. "But the liabilities are much clearer now than they were a month ago. There's only one unknown, not three—and this time, it's not up to us to make the first move."
Now there remains the other issue, the one that can no longer be delayed: the bank, and its silence, which is beginning to weigh more heavily than any protest.
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*Marc and the situations described in this series are fictional, composites of cases encountered in practice. Any resemblance to a real situation is purely coincidental.*
Next episode — Season 1, Episode 14/17: “ Negotiation with the bank ”
Morgan Jamet,
founding partner of Arst Avocats, advises business leaders on commercial law, insolvency law, restructuring, and business litigation.
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