Posted on January 5, 2023, 5:30 pmUpdated January 5, 2023 at 7:07 PM
Judicial Administrator. A stern name for an exciting mission. “We are the emergency workers of companies”explains Alexandre Bonetto, a 34-year-old administrator. “When we receive them, we know they are sick, but we don’t know the extent of the damage. We make a diagnosis with the information that the manager wants to give us, knowing that he is more or less lucid about the situation. »
And the professional weaves the medical metaphor: “At the end of this audit, two options: either we do a cast, we start a light procedure called friendly, or we start a major surgery, and we trigger a collective process with debt freezing and under the protection of the company by the commercial court. »
In the first case, the administrator has a reinforced consultative role. The leader remains the only master on board and simply needs a third-party mediator/negotiator to manage an issue with other stakeholders. Orpea, manager of private nursing homes, for example, requested this friendly preventive procedure to divide its debt in half and reinject capital after the scandal generated in January 2022 by the publication of the investigative book “Les Fossoyeurs”, which accused the group of abuse.
In the case of the collective process, things are already very bad and the trustee has more powers. He might go so far as to replace the manager. Its objective: to transform the company with strong measures. That second boss then inspects the box from top to bottom, trying to understand why this margin is so low or this payroll is so high relative to the competition. “Then, we build the restructuring, often with the manager who remains the one who knows his company best”specifies Alexandre Bonetto, who in the past examined the SNCM file, the National Maritime Company Corsica-Mediterranean placed in receivership and bought in 2015.
Scrap with the banks to restructure the debt
Joanna Rousselet, 36, recently started to restructure Pierre & Vacances. Eighteen months of hard work to avoid the bankruptcy of this tourism giant that ruthlessly sought capital and employs a myriad of companies.
With the process in hand, the days of this judicial administrator resemble a series of meetings, “with hundreds of people”especially formidable bankers with whom she must renegotiate the debt. “You had to have a strong heart, she says today. We had to equate their demands with those of new investors who established drastic debt reduction conditions in order to accept investment. » A job that paid off, the French company was saved from bankruptcy.
As this file shows, the receiver’s role is to bring everyone around the table to find a solution. And their powers are sometimes great. Armed with a court order, he can oblige suppliers, frightened by the customer’s financial situation, not to interrupt deliveries and, thus, avoid the worsening of the situation. The same with debts. Obliges banks not to claim monthly loan payments during a certain period. A powerful procedure that allows sick companies to raise their heads without being fired by their partners.
Business failures that will accelerate in 2023
In 2022, court administrators did not hesitate. Preventive procedures (those requested by managers themselves) increased by 21% in one year. Class actions (ordered by the courts) had a jump of 43%. An explosion largely due to the French economic context: “With the end of government ‘whatever it takes’ and state-backed loans entering the repayment phase, the distressed business rate is likely to continue to rise in the coming months.”analyzed last November Paul-Henri Audras, a 34-year-old judicial administrator involved in media archives such as Tati, Fauchon or Ascoval.
A forecast confirmed on Jan. 4 by the Banque de France, which announced in Les Echos that corporate bankruptcies had risen by 48% over the past year. That level remains 20% lower than in 2019, but experts anticipate an acceleration in failures in 2023.
Confidentiality around the preventive procedure
When a manager requests a preventive procedure, he benefits from complete confidentiality. Even the press, according to the judgment of the Court of Cassation, has no right to disseminate information. The risk is to scare customers, suppliers, employees and creditors and accentuate the company’s difficulties, since at this stage the situation is often recoverable.
In recent months, insolvency practitioners have noticed another trend: the increasing number of startups that end up in their offices. In question: the slowdown of the economy, the end of cheap money (with the rise in interest rates, it becomes more difficult and expensive to borrow) and fundraising more difficult to carry out. “Thus, we are witnessing the return of banks to the funding rounds, but banks are more demanding than investment funds”deciphers Emmanuel Laverrière, associate lawyer specializing in the restructuring of companies in difficulty.
“Startups find themselves in a cash tight situation and end up with us being put in a cash bubble, buying time to be able to find new investors”, comments Paul-Henri Audras. Agricool, Prêt à Pousser, Sigfox, Ma Jolie Candle… So many start-ups put into insolvency proceedings in 2022.
If we take a closer look at the numbers of preventive processes (those that are confidential) released by the National Council of Judicial Administrators and Representatives, small businesses (between 1 and 50 workers) are the ones that have been increasing the most. And the situation does not explain everything. “This type of procedure has been democratized for four or five years. And that’s good because going to the doctor when you’re really sick is too late.”, adds Joanna Rousselet. The judicial administrators interviewed are satisfied with the proliferation of these procedures that they consider “very effective”.
When the savior becomes liquidator
The success rate of these rescue operations, all types of procedures combined, would reach 75 to 80%, according to Paul-Henri Audras. But, unfortunately, bankruptcy is sometimes inevitable. The trustee must then proceed with the transfer of the company. For this, it is necessary to value all its assets, from patents to machines through the brand. The late airline’s “XL Airways” name had been sold for €686,000 at the time of its bankruptcy.
These receivers, who number just 157 across France, must know how to straighten out leisure centers as well as liquidate an airline. The question of its legitimacy then arises. Especially when they’re only 34 or 36. Let’s clarify, to begin with, that they start their careers as associates in a receivership office, often after studying finance, law and/or commerce, with partners who have the experience and title of receivership.
And everyone says, the secret of the profession remains practice. “When you are a collaborator, you have to eat as many files as possible to learn and understand only after a few years what you are talking about”, testifies Alexandre Bonetto. And before moving on to the post of administrator, candidates are required to do an internship with a company for at least three years before taking the exam.
We don’t know everything about everything, but…
Technicality also legitimizes credibility, adds Paul-Henri Audras. Finance, trade, law, so many areas to master in order to replace a manager in the commercial, financial or human resources field. “We don’t know everything about everything, but we have a sufficient level in each of these subjects to be able to obtain information and make decisions”adds Alexandre Bonetto.
Furthermore, in the case of a large group restructuring, the legal trustee is not the only one in charge. Senior management usually has advice on them. “We participate in the common reflection by bringing our perspective, but we are less at the forefront as in the case of a small structure, with an artisan, a pharmacy or an SME for example”explains Alexandre Bonetto.
Two exams to become a receiver
To change from a collaborator to a judicial administrator, it is necessary to pass an exam. And even two. The entrance test consists of several tests for entitlement and one for management control. The exit report, after the three-year internship, consists of the internship report, practical case, law, company management, economic culture and ethics.
In addition to experience and technique, you need character. “We need to know how to reconcile, forge bonds, suspend sessions and bang our fists on the table when necessary to say that at this very moment we are all doing something stupid. Or tell creditors your position is not legitimate”reports the experience of Joanna Rousselet.
A posture of authority far from being incompatible with the fact of being a woman, young as a matter of fact, she guarantees. Well, almost. On two occasions, she did not obtain the process because the manager to be supported was of a certain age and worked in heavy industry. “He considered that a 35-year-old woman was not the best profile. » But to add: “In the vast majority of cases, I have no problem. »
Companies, but also co-ownership and property
Joanna Rousselet ended up being inhabited by her profession. “I like the purpose. We help companies, that is, managers, shareholders, employees, suppliers. “The social side is what I get up in the morningspecifies in turn Paul-Henri Audras. Our goal is to maintain activity and employees, sometimes in disaster-stricken work areas. »
Namely that it does not become a judicial administrator not only to help companies, but also individuals. There are so-called civil lawyers who intervene in cases of adrift real estate co-ownership, undivided possession or problematic succession. They are few, 95% of judicial administrators are mercantilists.
How much do they earn?
A judicial administrator earns an average of 110,357 euros gross per year, that is, a salary of 9,196 euros gross per month, according to the website “fiches-droit” specializing in legal studies. But some can earn up to 500,000 euros a year. For salaried court administrators under study, the minimum salary is 6,000 euros gross per month. For an employee with two or three years of experience, his input is between 3,000 and 3,500 euros per month.