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 administrator called me on a Monday morning, before I'd even had time to settle into my office. "I've had initial feedback from the bank. It's not good." The loan committee has reviewed the file and believes that the repayment terms proposed in the plan, based on the rule of 5% then 10% per creditor—over eight years now, not ten—are insufficient to secure a debt of this size. In short: without further explanation, the bank is preparing to reject the proposal.
I immediately alerted Marc. "What does this mean, concretely?" It means that if the bank refuses, and its claim represents what it does in the total liabilities, the plan as it stands today becomes very difficult to get approved by the court—all the more difficult since the window of opportunity has already been reduced by two years. It's not yet a final refusal. It's a signal, and we need to act before the end of the consultation period, not after.
Three days go by without any news, during which Marc calls me almost every evening, for no particular reason—just to check that we're making progress. We request, and get, a meeting—not with Marc's usual advisor, the one who's been with him for fifteen years, but with the department in charge of litigation and restructuring at the regional office. Three people facing us, printed files, not a single smile. Marc, next to me, is shaking hands under the table. I know because I'm doing the same thing.
I state from the outset what the bank already knows but needs to be said out loud: a court-ordered liquidation would not bring them any more profit. Real estate assets, sold in the rush of liquidation, always trade below their true value—and the costs of the proceedings take precedence over the liquidation itself in the order of payments. The question, therefore, is not whether to be paid in full or not. It is whether to choose a structured, long-term repayment plan or a partial, rapid, and significantly lower repayment.
The case manager listens, takes notes, and asks precise questions about the financial projections—the same ones already presented to the court, based on the same assumptions, but this time compressed to eight years. There's a rather long silence, during which Marc looks at his hands. Then he proposes what I'd been hoping for but hadn't dared mention to Marc beforehand, for fear of his disappointment if it didn't work out: a separate agreement, negotiated privately, that arranges for the repayment of this debt over a longer period than the plan, secured against the existing guarantee on the property. The bank agrees not to oppose the plan in court in exchange for this parallel agreement, which gives it a level of visibility it wouldn't have had by remaining strictly within the standard repayment schedule, now condensed to eight years.
“Is that even legally possible?” Marc asked, almost incredulous, once they had left. Yes. A formal consultation by registered letter is mandatory for all creditors, but nothing prevents a creditor from simultaneously accepting terms negotiated directly with the debtor, provided they do not harm the other creditors. In fact, this is what most often happens with bank creditors holding a security interest.
Marc remained silent for a long moment in the car. "Three weeks ago, this case wouldn't have gone through. Two fewer years to repay the same amount, and now it's accepted." No, indeed, it wasn't as simple as it seemed. "It's not enough to be legally correct. You also have to convince the other party that it's in their best interest to believe you, and sometimes find, outside the usual framework, a solution that the framework didn't allow." This time, it worked. Now all that remains is to put everything on paper, with supporting figures, for the hearing to review the plan.
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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 15/17: “ The Continuation Plan Calculations ”
Morgan Jamet,
founding partner of Arst Avocats, advises business leaders on commercial law, insolvency law, restructuring, and business litigation.
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