[CONTENU PARTENAIRE] The worst is certainly to come for companies, debts are accumulating, aid and measures will not ensure tomorrow’s turnover, nor the markets in which they prospered before the Covid. Who to turn to to deal with temporary difficulties amicably and save cash, how to prepare for the future and invent the rest of your business? Is the business lawyer, in an economic world governed by law, the best placed to help make the right strategic decision? To answer, we turned to a reference lawyer in the restructuring of companies in difficulty, Patricia GUYOMARC’H, Lawyer at the court of Paris, professor of law at the School of Lawyers and founder-partner of the firm CG LAW Guyomarc’h.
What is the challenge for a business lawyer at the moment?
We find ourselves in a very vague situation where specific “Ordinances” linked to the state of health emergency govern the economy, a temporary situation that ends up lasting. Faced with this unprecedented and chaotic situation, where the state has put companies on a drip, we are seeing a drop in the opening of insolvency proceedings in 2020. If business leaders do not react, we will see dry cessations.
Faced with the decline or even the elimination of their activity, many leaders will quickly experience serious problems. Having started my career in the “restructuring of companies”, I experienced the crisis of 90 (Gestion Groupe Tapie), then that of 2008 when the business world became financialized, with the proliferation of LBOs (Leverage Buy Out); debt has become an asset and the value of companies more speculative. The restructuring of companies then passed through this negotiation. The banking and economic system was “saved” by an influx of monetary creation and indebtedness.
Today with the COVID crisis, the prospects are not well defined, we are talking about a new paradigm, retraining, digitization of all sectors, “Great reset”… We have no visibility, apart from loan rates which remain low. Moreover, there is hardly any substantive debate about the future.
Thus, natural and legal persons find themselves in total dependence on government decisions and the economy collapses in depth and in silence.
The business lawyer specializing in companies in difficulty can help support the entrepreneur, both in terms of debt negotiation, but also by implementing new structural and economic strategies.
More than ever, company restructurings and rescues call for very technical skills. We must imagine recovery strategies, adapt and learn about procedural reforms… imagine a multi-speed recovery plan. The business lawyer specializing in companies in difficulty will play a major role in redressing the economic sector and the economic fabric.
What advice would you give to a leader whose company is experiencing serious difficulties?
Avoid the policy of the ostrich, adopt the right reflexes and therefore go to see a lawyer specializing in companies in difficulty to make a diagnosis like going to see a doctor. We must not wait for the end of aid to react. First of all, you have to look for amicable solutions (opening of an Ad ‘hoc Mandate, or conciliation) which are very effective and discreet, negotiate debts and set up simplified procedures before opening of collective proceedings. It is necessary to seek advice: audit your business, identify the nature of the major difficulties to consider different solutions (new business plan, fundraising, new associates or partners, renegotiate debts). Then, if that is not enough, initiate tougher procedures such as a backup or recovery plan.
The specialized business lawyer will promote the search for the right solution and avoid long and risky procedures. He will also be able to manage legal disputes in parallel and facilitate mediation in all areas.
It is the multidisciplinarity of legal skills and the understanding of figures at the service of the company, which are our asset in this situation to have a global view. Personally, I also bring beyond the legal, the energy and the psychological support to help the leader to stay the course, like a coach.
What is your position with business leaders?
Our business law firm, CG Law Guyomarch has been dealing with all the issues mentioned above for more than 20 years. He accompanies in their daily life, the business manager, the CFO, the legal director of the company, the funds (in commercial law, social law, contract law, etc.) at the level of advice and litigation and also when difficulties arise. thanks to this specific expertise in the restructuring of companies in difficulty.
We support buyers (managers, investment funds, investors, looking for external growth) by Judicial takeover of a company at the bar of the Court. Our approach is based on responsiveness, creativity and is also expressed by the writing of published articles that advance the law. We are consulted for our vision and our creativity, our ability to offer a sharp and top-of-the-range service.
What is your news?
To support companies in this difficult period, we have created a Youtube channel titled “RESTRUCTURING ATTORNEY CG LAW” https://www.youtube.com/channel/UCjpBWTie7PUg89OvsNYpWtQ to talk to leaders and introduce them in plain language to restructuring tools. We are also finalizing with partners, a site “ CrisisCell Restructuring» to help managers be more responsive through more visible knowledge of specific turnaround tools. You have to be creative, innovative and digitize in business law too!
This content was produced with SCRIBEO. The BFMBUSINESS editorial staff did not participate in the production of this content.