Aude: before the commercial courts, the return of business failures to pre-Covid levels

The presidents of the commercial courts of Narbonne and Carcassonne make the same relentless observation: that of a return to the level of 2019 in collective proceedings, with bankruptcy declarations accelerating. Between the end of aid, reimbursement of PGEs, cash flow difficulties, rising energy and raw material costs, and labor issues, the unfavorable environment is cause for concern.

A turning point announced

Already last May Jean-Pierre Cassan and Christian Simon painted a not very encouraging picture: the presidents of the commercial courts of Narbonne and Carcassonne respectively evoked increases “from 50 to 60%” And “from 15 to 20%” collective procedures (safeguards, reorganisations and judicial liquidations) compared to 2021. “Not the pre-Covid level yet”then specified the president of Narbonnais. Almost four months later, the milestone was reached: “At the beginning of September we returned to the same values ​​as in 2019, with 90 collective proceedings since the beginning of 2022, when we were 60 in 2021”explains Jean-Pierre Cassan.

Any cost period had allowed the companies to be protected.
The independent infographic – The independent infographic

And project on an uninspiring future: “If we rely on the various barometers dedicated to the activity, provided by the Chamber of Commerce and Industry (CCI), the Chamber of Crafts and Crafts (CMA) or the Departmental Directorate of Public Finance (DDFIP), there is a risk of deterioration by the end of the year, with inflation and energy costs on the rise. Nothing is certain, but we could then exceed the 2019 figures “. Christian Simon confirms the trend: “We are back to the level of 2019, with an increase in activity that could be greater in general litigation, reflecting the difficulties in paying suppliers.” And to mention telltale indicators: “In the span of six months there has been a significant increase, of 15%, in payment orders with the suppliers who shape, in the shortened proceedings”. With here too, a perfect Narbonne / Carcassonne parallelism: “We registered about thirty payment orders in the first 15 days of September”, illustrates Jean-Pierre Cassan.

From EMP to the workforce

There was a fear of the end of “any cost” and the expiry of the repayments of the loans guaranteed by the state (PGE). For Jean-Pierre Cassan, a higher number of bankruptcies than in 2019 would be a good sign “with evident post Covid effect”. And to name the companies that had applied for an EMP “who find themselves in limited cash” : “They are people who have started to pay back but who, after four or five months, are having difficulties.” Companies “able to request an additional spread. But they run the risk that it will not be granted, because then very strong guarantees are requested, which they are unable to provide. Spreads that Christian Simon also asks, hoping the “Banking organizations do not go towards reversals of responsibility. Not for nothing these are called loans guaranteed by the state”.

A question of EMP that must not make us forget another factor of “the aggravation” of the situation: “These collective proceedings are mainly related to small businesses that have filed for bankruptcy.” Companies in the vast majority of sectors “masonry and public works, as well as restorations”, explains Jean-Pierre Cassan. Like so many companies that have confronted each other “a double problem of replenishing customers and recruiting with, in particular for catering, a workforce that has moved to other activities”.

Prevention, always and again

Of the “small businesses and small businesses”, in essence, then. But Christian Simon warns: “Some major companies, with 15, 20 or even 30 employees, are asking for receivership procedures.” Companies “mainly from industry and construction” who pay for the labor trap, combined with the cost of raw materials: “They do not recover pre-Covid activity and turnover”And “cash dip”. This phenomenon, even the Narbonne court meets him: “We are starting to have companies that are more structured in prevention, with 10 to 20 employees”.

The opportunity for the two presidents to take back the pilgrim’s staff: “We will help them get out. But if these companies had come earlier, we could have initiated confidential proceedings, which remained in their hands, unlike the suspension of payments. But the leaders are still struggling to push the door to the commercial court.”regrets Christian Simon. “Business leaders are convinced that they will make it, that there could be better days”, notes Jean-Pierre Cassan. Who, while underlining the work already done in collaboration with “CCI, CMA, DDFIP, USSR”Recalls the advantage that commercial courts could derive from real-time information on the situation of businesses: “In respect of confidentiality, of course. If companies do not pay contributions to pension funds, or for paid holidays, it is because they have difficulties with cash flow.” And to recall the benefit of the hearing scheduled for the beginning of 2022 by the Narbonne Public Prosecutor’s Office for about thirty companies that had not fulfilled the obligation to return their income and financial statements: “It is also a tool for additional alerting and detection of possible difficulties. And it is in their interest.”

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