Business Case – Conciliation in the interests of a food service establishment

For nearly a year, our client—a well-known restaurant company in Marseille—has suffered very substantial revenue losses due to COVID-19 and the various restrictions introduced by the government (notably the health pass).

For almost a year, the restaurant tried to negotiate amicably with its landlord over €60,000 in rent arrears. The landlord was requesting a €25,000 lump-sum payment, with the remainder to be repaid on a one-year schedule.

Seeing that an amicable agreement with the landlord could not be reached—and given the impact this could have on the company (judicial reorganization or even liquidation)—management decided to appoint Sion Avocat Law Firm. After discussions with the company’s chartered accountant, we decided to pursue a conciliation strategy.

You may be wondering why Maître Sion did not choose the mandat ad hoc strategy, which is legally “lighter.” Our aim was to restore the company’s financial health as effectively as possible, which required renegotiating the State-Guaranteed Loan (PGE) by asking the bank for a two-year suspension, followed by a rescheduling over six years. The business plan provided by the chartered accounting firm reinforced this forward-looking plan for the company.

At the end of this conciliation process, Sion Avocat Law Firm obtained:

• A two-year rescheduling of the debt owed to the landlord at €2,750 per month, instead of the €25,000 lump-sum payment initially demanded by the landlord. This allows the restaurant to remain viable over the long term and avoid staff layoffs—along with a full debt write-off of €11,000 out of the €60,000 originally owed.
• A two-year suspension of the State-Guaranteed Loan (PGE), in addition to the first one-year deferral already obtained by the restaurant, so that repayments will only begin once the debt owed to the landlord has been cleared. The State-Guaranteed Loan will then be repaid over six years.

This is how our tax law firm was able to save a company in difficulty while preserving its financial stability—fully confidentially with respect to suppliers, customers, and anyone else other than those directly involved in the conciliation process