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
It's past 7 p.m. when the screen lights up. Marc waited until his last employees had left before calling from his office, the overhead light off—only the computer screen illuminates his face. He's put his accountant on video call with us, as if he needed a witness to what he's about to say.
"I think this time, it's not going to work."
He doesn't get straight to the point. He starts with an invoice a client has refused to pay for four months. Then he pauses, resumes, talks about his cash flow—"we're holding on, but only because I'm putting everything off"—before casually mentioning that he's lost the contract he was counting on to get him through the summer. A silence. Then, more quietly: "And there was a tax audit. Last week. I haven't even told my business partner yet." Another silence, a longer one this time. "Actually, things aren't going well with my business partner either."
Things never happen one by one. That's often how you recognize them.
My job at this moment is not to reassure him. It's to sort things out. I let the accountant go over the figures, line by line, while I note down everything that isn't in the balance sheet: the faces, the silences, what was said last even though it was probably the most important.
"Marc, if I offer you a break—just that, some time—will that be enough to save the company? Or are we just postponing what's going to happen anyway?"
He doesn't answer right away. That's the right answer, actually: someone who answers too quickly hasn't yet faced the facts.
I explain this pause to him without sugarcoating it. The receivership process initiates a period of observation: creditor actions are suspended, pre-receipt liabilities are frozen, and the company continues to operate under the supervision of a court-appointed administrator. Time stands still, in a way, giving him time to develop a plan. But I also tell him what this pause will cost him, because it's my job to tell him now, not in six months.
His clients will find out—through a publication in the BODACC (Official Bulletin of Civil and Commercial Announcements), a shared supplier, or a rumor that spreads faster than he can keep up. His suppliers, meanwhile, might switch to cash payments overnight, further tightening the very cash flow he's trying to ease. His employees will need to be informed, and their concerns will be understandable, even if their salaries remain guaranteed.
Then he asks the question I was waiting for. He asks it poorly, skirting around it: "I have... for the loan of the premises, at the bank, I signed in my own name. Personally." It's a guarantee.
I'm taking the time to be precise because this is a matter where imprecision is costly. Since 2021, the law has protected him during the observation period: no one can sue him over this commitment as long as the proceedings are ongoing. But this protection ends abruptly at a specific point—the day the court approves the plan, or the day it orders liquidation. If the restructuring fails and the company goes into liquidation, the suspension ends immediately, and Marc would find himself exposed, without delay or any safety net, to the entire debt he personally guaranteed.
I look at him. "That's no reason to hesitate to initiate proceedings. Quite the opposite. It's all the more reason to fully commit to a sound plan, because it's the success of the recovery—not just its initiation—that truly protects you."
He nods his head, slowly.
One last question remains, the most crucial of all, and I ask it directly: “Since when, exactly, have you been unable to pay your debts with your cash reserves?” He hesitates. That’s normal—no one can answer that question on the first try, and that’s precisely the problem: the court can set this date retroactively, up to eighteen months before the proceedings began. And it’s this date that triggers a forty-five-day period during which a company director must declare insolvency. If this date is pushed back, a filing that was thought to have been made on time may turn out to be late—and expose the company to personal liability. It’s better to face it now, calmly and deliberately, than to discover it in a report six months later.
It's almost 9 p.m. when we hang up. Nothing is decided yet—not tonight. But everything is on the table: the figures, the third parties, the deposit, the date. And it's precisely from this table, with nothing left in the shadows, that the real decision can be made: an amicable solution if the situation still allows, receivership if the prospects are realistic, and sometimes—and we'll have to be honest about it—liquidation, when postponing the deadline would only make things worse for everyone.
Marc closes his computer. Outside, it has been dark for a long time.
—
*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 2/17: “Filing for Bankruptcy”
Morgan Jamet,
founding partner of Arst Avocats, advises business leaders on commercial law, insolvency law, restructuring, and business litigation.
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