DEALCOCKPIT: Can you introduce yourself in a few words?
Hélène Charpentier: I am a court-appointed administrator, established since 2018, more specifically at the court of Nanterre, but with a national jurisdiction, which means I can intervene just about anywhere. The judicial administration works alongside company directors to help them find solutions and overcome difficulties, regardless of the stage of difficulty, whether beforehand, with preventative measures such as conciliation and the ad hoc mandate, which are aimed at negotiating with creditors, or difficulties that are already more serious, leading to the opening of a safeguard procedure or, in the event of payment cessation, judicial reorganisation, during which we sometimes find them a buyer.
DC: What is the specific role of a court-appointed administrator in this process?
Hélène C.: That depends on the mission entrusted to us by the court. We are appointed to work alongside company directors and entrepreneurs and help them make decisions, especially regarding restructuring measures. For example, we may have to implement layoffs for economic reasons if the difficulties are too significant in relation to the company’s activity and if reducing expenses is necessary for its operation. We are also in responsible for monitoring the company’s payments, ensuring that it fulfils its ongoing obligations correctly and that the latter are closely related to its activity. We must have a very precise and clear vision of the company’s situation and have regular meetings with the director over the months of the procedure. We then help them to prepare a debt repayment plan, which is the first option when faced with this type of difficulty, and can last up to ten years. In this case, we help them review their business plan and determine the company’s capacity to repay. If this is not possible, we look for a buyer. Subsequently, we contact interested parties, publish an announcement, and create a Data Room with relevant information, before analysing the offers to present to the court.
DC: So, it is possible that, during such a process, you take charge of the company’s operations?
Hélène C.: Yes, especially the financial side. However, we do not interfere with all existing teams and systems, as we are generalists, and not specialists in all areas. But we keep a sharp vision, sometimes daily, often weekly, depending on the degree of necessity, to keep a keen eye on what is happening within the company, particularly concerning all financial operations.
DC: During a restructuring process, what are the main challenges for companies?
Hélène C.: During a restructuring, the key challenge is to maintain sufficient cash flow to cover ongoing expenses, as restructuring solution does not take effect from one day to the next. A few months are necessary, two to three at a strict minimum, and during this work, it is essential to be able to pay salaries, rent, suppliers, etc. So, it is really an issue of cash. Furthermore, there is the question of exploitation. In other terms, if the company is lucrative, or not, and if it is not, why. Is it due to particular market conditions? Have there been investments that have not yielded a return? Lastly, there is the matter of debt: To how much does it amount, is there room for negotiation? And if this is not possible, creditors will have to be reimbursed with available assets.
DC: In your experience, what are some common misconceptions about the role of a court-appointed administrator?
Hélène C.: There is a particularity in France of having two different occupations to deal with companies experiencing difficulties: the court-appointed administrator (administrateur judiciaire) and what is called a judicial representative (mandataire judiciaire). This exists distinctly in France, and the principal error is to assimilate these two professions to a single one, that of a liquidator. Upon learning what I do, people often think that I close businesses and liquify their assets. This is not the case at all! My role is more like that of a paramedic in a crisis situation who, with their defibrillator, creates the necessary shockwave to resuscitate the company. Sometimes, an amputation is necessary on one end or another, but in any case, my goal is to find a solution to save the company. It is not at all the activity of a liquidator, who intervenes when there is no longer any hope, and the company is already on its death bed. The most common misconception is thus the assimilation of these two fields, and consider court-appointed administrators to be mediators that arrive too late, whereas we intervene precisely to find solutions.
DC: Could you give us an example of a particularly memorable case you have worked on?
Hélène C.: There are plenty. One must bear in mind that a court-appointed administrator looks after 30 to 40 companies simultaneously, and that each one is different. This could be a micro-business with a director that does everything themselves, without any employees, whose company makes up their entire life. On the other hand, we may be dealing with large, very structured companies that have a Financial Director, a Human Resources Director, an IT Director, etc., where everybody has their role to play. There is a great variety of cases in all possible business sectors, which is also one of the charms of my profession. When it involves a physical person, the challenge of saving the business, and in this case, the business owner themselves, is even more pressing. One example I can think of is that of a self-employed, independent nurse, who, unfortunately, fell victim to a scam related an investment concerning her primary residence, and since everything was consolidated into a single estate, her personal difficulties led to professional challenges, particularly in paying the social security contributions of her business. In that case, we were unable to elaborate a debt repayment plan, because the latter was too substantial, but we were able to convince her to go back to working as an employee. We crossed paths again some years later, and she considered we had saved her life, by enabling her to return to a salaried job. I was glad to see she had peace of mind. She is fulfilled in her work and, above all else, she no longer has to manage the administrative aspect, which she disliked.
DC: There are many individuals who have extraordinary technical expertise in their field, but lack the management and administrative skills necessary to survive as an entrepreneur, or as a company. Would you agree?
Hélène C.: Certainly. Everyone has their strengths, but it is important to recognise and accept one’s limits, and to welcome help in areas in which one lacks expertise.
DC: In a restructuring or liquidation process, how do you guarantee your clients’ confidentiality and the protection of sensible company information?
Hélène C.: Our missions are of judicial nature, which implies that we must be held accountable to the court. We are required to follow certain steps and regularly report back to the courts. Regarding the progression of the procedure, the judgements are public. Consequently, if someone wants to know if a company is in the process of a financial restructuring, they can consult authentic online sources (e.g. BODACC) and search the company name to see if there are any judgements rendered or not. We carefully preserve both business confidentiality, and the major stages of the process which need to be made public, as all creditors must be treated equally from the start of the procedure. When we initiate a call for bids, we have the parties sign a Non-Disclosure Agreement, before granting them access to the Data Room, and we ensure that no personally identifiable information about employees is disclosed. This necessitates a process of reviewing and anonymising documents.
DC: How does this type of tool assist you throughout the process?
Hélène C.: When launching the bidding process to find a buyer, we are compelled to justify that our process was transparent. A Data Room is necessary to guarantee that. All individuals, given the NDA has been signed, can have access to it, and above all, have access to the same information. Furthermore, a Data Room allows for the traceability of document exchanges knowing who had access to which document.
DC: You particularly trust DealCockpit. Why?
Hélène C.: We use DealCockpit rather often, because it is very easy to use. Our firm regularly recruits and accommodates new interns every six months and they often provide support to the associates. As a result, it is essential for the platform to be user-friendly, so as not to require constant training over multiple months. In addition, DealCockpit is reliable – it works very well, and the support is always available. Lastly, it is affordable, which is also important to us. DealCockpit offers great value for money.
DC: Are there aspects that need improvement?
Hélène C.: I currently only receive notifications for certain Data Rooms, when users add documents. I think it would be preferable for the reception of notifications to be activated by default, with the possibility of deactivate them if needed, rather than the other way around. For example, I have a Data Room that expires this evening, to which I am still adding documents. I would like it if the parties concerned received said documents immediately, to be sure everybody is up to date, before the expiration of the Data Room this evening.
DC: Thank you for the feedback. I assure you that the default settings send notifications to everyone. A last piece of advice for entrepreneurs?
Hélène C.: We are noticing that more and more companies resort to insolvency proceedings. If you look at the numbers, the number of businesses in difficulty has increased, even before the COVID-19 pandemic, however, the crisis exacerbated the situation. If you start to notice a significant drop in revenue, I advise to act quickly. If there is one word to keep in mind when dealing with difficulties, it is that of anticipation. I recommend having cash-flow available covering at least two to three months of ongoing charges, to have sufficient time to react. Moreover, do not hesitate to ask for help or counsel from a professional, such as a court-appointed administrator. A first, free appointment to get advice is precious, so do consult us! The earlier we intervene, the better the chances of facing the difficulties and finding a solution.