Dati wants to ease bankruptcy steps
Debts could be converted to shares and strict criteria for legal measures will be loosened.
JUSTICE Minister Rachida Dati wants to reform bankruptcy procedures.
The minister said: “Justice is not all about penalties, it’s also an aid and the possibility to give a second chance – notably to struggling businesses.”
Few businesses use legal measures which can help them avoid bankruptcy; in 2006, 1,300 businesses entered into conciliation and safeguard procedures while 45,000 failed.
The reforms will make it easier for business owners to make contact with the legal system, rather than waiting until the last moment.
They will no longer have to prove that their difficulties are so bad as to prevent them from making payments, but simply demonstrate that they are in “serious difficulties”.
Bosses who enter into legal proceedings will be able to remain at the head of their business during the reorganisation.
“It is important not to exclude the head of a business during this delicate period because they know the markets, the clients, and they can keep up the morale of staff,” said Dati.
Only the head of a business will be able to ask for a partial cessation of activity and not the administrateur judiciaire as is currently the case.
Some debts could be recovered in the form of shares in the company which could also enable other companies to recapitalise those in difficulty.
Dati will present her plans in mid-December and hopes that the law can be reformed to bring them into effect by January 2009.
Photo: Afp/Bertrand Langlois
BERTRAND LANGLOIS
