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 first real working session on the plan took place at the administrator's office this time. Around the table were Marc, the accountant, the administrator, and me. Four chairs, a blank whiteboard, and the initial thought that this meeting would be quite studious. It wasn't for long.
“What basis do we use for the liabilities?” asks the accountant, opening his spreadsheet. A good question, and that’s precisely the problem today: two of the three disputed claims are still awaiting their review hearing before the bankruptcy judge. We can neither ignore them nor treat them as definitively due. Therefore, as the law allows, we construct two columns—a low estimate, a high estimate—pending the resolution of these disputes.
But that wasn't the line item that worried the administrator most that day. It was another, almost at the bottom of the table: the outstanding balance on the bank loan for the premises, the one for which Marc had personally guaranteed it six years earlier. "This debt alone represents almost a third of the total liabilities. If we include it in the plan according to the standard rules—5% from the third year, 10% from the sixth, per creditor—the annual payments become unmanageable for a company of this size." He didn't present it as an inevitability. He stated it as a fact, laid out on the table, that would have to be resolved differently.
Marc stares at the figure for a long time. "So the plan won't pass?" Not in its current form, no. The law allows ten yearsto spread out this type of debt—plenty of breathing room, in theory. Except the administrator raises his hand before I can even finish my sentence. "Ten years, on paper, yes. But not in this court." I already knew, actually, without having told Marc yet: this court has made a habit, in recent years, of no longer approving plans spread over the maximum duration. Eight years, in practice, is the informal limit it sets—not as a matter of principle against businesses, but to give the debtor real flexibility in case of hardship: a plan that already runs out of the legal ten years leaves no room for maneuver if, one day, an extension or a substantial modification is needed.
“Is this eight-year rule written down somewhere?” Marc asks, almost annoyed. No. Nowhere. It’s a practice specific to this court, not a general rule—another court could very well accept ten years without hesitation. But this is the one that will rule on our case, so it’s this practice we have to anticipate, whether we find it fair or not. “So we have two fewer years to spread out the same debt.” Exactly. And a bank loan that, even over ten years, posed a problem of balance.
“And if she refuses?” Marc asks, returning to the bank. Then the plan, as it stands today, doesn't hold up to the numbers—even less so over eight years than over ten. This isn't a purely theoretical scenario: the bank, too, has every interest in preventing the company from going into liquidation, where it would recoup far less on a real estate asset sold in haste. But so far, it hasn't given any indication of this.
The administrator closes his file, staring at Marc: "It's not a disaster. Two out of three banks end up negotiating on this type of case. But in the meantime, we need to move forward on two fronts at the same time: that the disputes be resolved, to finally determine the true liabilities, and that someone makes serious contact with the bank before the next deadline."
Marc left that meeting with two figures in mind that he hadn't considered when he went in: the significant portion of his entire company's financial stability represented by a single debt, and the fact that it would take him two years less than the legal timeframe allowed to absorb it. "They create a plan for everyone, except that everything hinges on a single line item, and on top of that, they change the rules of the game mid-stream." He's not entirely wrong. But that's not the end of the story either.
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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 13/17: “ Liability Verification Hearing ”
Morgan Jamet,
founding partner of Arst Avocats, advises business leaders on commercial law, insolvency law, restructuring, and business litigation.
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