Preparing for the post-Covid world
In these unprecedented times, once senior executives have arrived at a lucid analysis of the economic, financial and commercial situation of their company, they need to look to the future.
The various emergency measures introduced (partial unemployment, government-backed loans, deferred expenses, etc.) should help them weather this difficult passage, as long as a return to
normal is not too long in coming.
These measures, coupled with the temporary easing of the law on distressed companies, must not cast a veil over the reality of the situation businesses face and the scale of their difficulties.
The freezing of a company s cessation of payments status as at 12 March 2020, access to a safeguarding procedure even when the
cessation of payment status is largely exceeded, the automatic extension of conciliation procedures to 5 months... are all praiseworthy attempts at easing the law on distressed companies. Yet these same measures may also lead executives astray and into inappropriate actions.
It is vital to be able to arrive at the objective findings and analyses that will enable senior executives to
take advantage of the right support tools, either within a confidential preventive framework (ad hoc mandate and conciliation) or as part of insolvency proceedings (accelerated financial safeguard (SFA) or administration).
Furthermore, the current crisis will inevitably result in a wave of business sell-offs. For some, these disposals will offer very real solutions for keeping their core activity going, and
will provide corresponding external growth opportunities for others. Order n°2020-596 dated 20 May 2020 conveniently sets out to accelerate the implementation of company sell-off plans, but also to allow the possibility, under the supervision of the public prosecutor, of management buy-outs.
Whatever the circumstances, analysis and anticipation are, as ever, the key words.
What remedies are available to distressed companies?
Quite apart from the stunning effect of the widespread close-down of commercial premises and public buildings, and the slowing even complete halting of work on construction sites, the life-blood of the country s economy, we come back to the consequences of Covid-19 for the real estate sector.
Building, buying and holding a real estate asset that can be sold or rented always offers a certain security, although renting might have seemed a risky option if lockdown and working from home meant that the premises could not be occupied.
Government ordinances have mitigated the effect of penalty clauses, but they have done nothing to address either the consequences of the crisis, or what the post-Covid world will look like. As far as construction projects are concerned, completion dates, costs and penalties will be the key issues.
Residential: while buyers might be keen to hold off on buying, tenants will still need somewhere to live, and then there are the government s wide- ranging incentives for
household energy-saving improvements, launched to kickstart the economy.
Hotels, restaurants, shops: it is too early as yet to determine the impact on rental values or marketability. On the other hand, there will be issues over rents and rental expenses while the Covid threat continues, with administrative closures, possible company insolvencies and a reduction in surface areas rented. The one word of advice that counts is: negotiate! Discussion, or even mediation or arbitration, will always prove speedier than litigation. And the Real Estate law Department will be here to help.
Impact on the real estate sector
In the light of the extraordinary times we are living in, structural measures have been introduced to help the public sector overcome the difficulties caused by the crisis: management and organisation of public services, processing of applications, management of litigation proceedings, personnel management, the exercise of police powers, deployment of health
measures following the release from lockdown, etc. The Public Law Department is fully mobilised to help you resume activities under the best possible conditions.
Carrying on from the series of news analyses introduced to help you deal with the Covid-19 crisis, this now includes an analysis in its June newsletter of the measures extending the state of health emergency
to 24 July and governing the gradual resumption of activity as the lockdown eases.
It offers a presentation of the new measures introduced, which have opted for a gradual resumption of procedural deadlines on matters of urban planning and public procurement; new measures on the organisation of administrative jurisdictions;
the organisation of teleworking for public servants; the running of municipal councils and the second round of the municipal elections; the exercise of police powers and the management of public services.
What about public services?