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
“Are we going back to court? Already?” Marc isn’t worried this time, at least not in the same way as on the first day. I remind him what I told him from the start: two months before the opening, the court systematically reverses its decisions. This isn’t a sign that anything is wrong. It’s provided for by law, for all procedures, including those that are going smoothly. I tell him this, and yet I can see that it’s not enough to stop his hands gripping the steering wheel in the courthouse parking lot.
"Is it going to be like the first time? The prosecutor, the waiting?" No, not quite. This time, there's no suspense about the opening itself—it's a given. The stakes are different: does what was promised to the court two months ago still hold true today? Marc nods, but I can tell he's holding his breath as he pushes open the door to the deliberation room, just like the first time.
The atmosphere, however, is completely different. There's no suspense about the outcome, no prosecutor whose every glance is scrutinized for long minutes. The president is already familiar with the case—the administrator sent him a detailed report on the first two months the previous week.
He begins by giving him the floor directly: “You have, I believe, a report to present to us.” The administrator opens his file and lays out what the law requires at this stage—a complete economic and social assessment: the origin of the difficulties, traced without bias or unnecessary harshness—a lost market, a poorly anticipated tax audit, cash flow already strained even before the opening; then the outlook, quantified and cautious. “The situation is not that of a company in its death throes. It is that of a company that needs time and a framework to recover—which, precisely, corresponds to the very purpose of an observation period.” Marc doesn't move, but I see him breathe a little more deeply at this sentence.
“And what about the cash flow, specifically?” the chairman asked. “No outstanding debts have been incurred since the opening. The cash flow covers current expenses with a reasonable margin—the figures are in line with the initial projections, within a few thousand euros.” This, I know, is the real issue at stake in this hearing: ensuring that no new liabilities accumulate while the proceedings are underway. A plan can only be built on a company that doesn't sink further while it's being repaired.
The chairman then turned directly to Marc. "Your clients, Mr. Dupont?" Marc replied, his voice more confident than on the first day, almost with a touch of pride: "They're still here. One of them even just placed a larger order than usual. We haven't lost a single one since we opened." Then, turning to the employee representative, who was present at his side for the first time: "People are still here. No one has left. We believe in this." Two short sentences, but in this room, they carried as much weight as any figure on the balance sheet.
The president closes his file, looks at his assessors—a simple exchange of glances this time, not the long wait of the first day—then at Marc. “The court orders the continuation of the observation period.” A brief sentence, almost anticlimactic after the morning's wait, but which, for Marc, constitutes official confirmation of what he had been promised two months earlier: yes, the situation did indeed allow for an attempt at recovery. Yes, it wasn't an illusion.
In the hallway, Marc breathes a sigh of relief, a genuine smile this time, not just relief. "We're on track, then." Yes. The same figures as at the opening, confirmed in reality, two months later. That's no small feat. "It's perhaps the best news since day one," he tells me, almost surprised to think it himself.
He has no idea what the following week holds in store for him. As I leave the parking lot, my phone vibrates: it's the accountant, asking to see me alone before speaking to Marc. "The figures for the month," he told me in a tone that didn't bode well, "aren't quite what we were hoping for.".
—
(Marc is a fictional, composite character.)
SEEN FROM THE INSIDE, a series about bankruptcy proceedings told in a concrete way.
Next episode: layoffs.
Morgan Jamet,
founding partner of Arst Avocats, advises business leaders on commercial law, insolvency law, restructuring, and business litigation.
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