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

A restaurant business weakened by the health crisis

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 attempted to negotiate amicably an outstanding rent debt of €60,000 with its landlord. The landlord requested an immediate payment of €25,000, with the remaining balance to be repaid according to a one-year schedule.

As no agreement could be reached and considering the potential consequences for the company — including the risk of judicial reorganization or even liquidation — the management decided to instruct Yaël Sion LAWYERS & ASSOCIATES.

After a detailed discussion with the company’s accountant, we recommended opting for a conciliation procedure.

Why choose conciliation rather than an ad hoc mandate

The question could legitimately arise: why not choose an ad hoc mandate, a procedure often considered more flexible?

In this case, our objective was to restore the company’s financial situation in a sustainable manner. This required, in particular, renegotiating the State-Guaranteed Loan (PGE) in order to obtain a temporary suspension of repayments.

The strategy therefore consisted of requesting a two-year suspension of the loan from the bank, followed by a rescheduling over six years. The business plan prepared by the company’s accounting firm reinforced this forward-looking vision and demonstrated the restaurant’s long-term viability.

The conciliation procedure therefore made it possible to open a comprehensive negotiation with the company’s main creditors.

Results achieved through the conciliation procedure

At the conclusion of the conciliation procedure, Yaël Sion LAWYERS & ASSOCIATES obtained several key outcomes that proved decisive for the company’s survival.

Regarding the rent debt:

• a rescheduling of the debt with the landlord over two years, with monthly payments of €2,750,

• the withdrawal of the landlord’s initial request for an immediate payment of €25,000,

• a total debt write-off of €11,000 out of the €60,000 initially owed.

This agreement enables the restaurant to maintain its operations over the long term without having to make staff redundancies.

Regarding the State-Guaranteed Loan (PGE):

• a two-year suspension of loan repayments, in addition to the first year of deferral already obtained by the company

• a repayment schedule spread over six years.

This solution allows the business to begin repaying the State-Guaranteed Loan only once the rent debt has been fully settled.

A confidential solution to preserve the business

This conciliation procedure made it possible to save a business in difficulty while preserving its financial stability.

It was also conducted under strict confidentiality, with regard to suppliers, customers, and any third parties not involved in the conciliation negotiations.

The intervention of Yaël Sion LAWYERS & ASSOCIATES therefore helped secure the company’s financial situation while ensuring the continuation of its activity.

Facing similar difficulties?

If your company is experiencing financial difficulties or if you require assistance with a conciliation procedure, an ad hoc mandate, or financial restructuring, Cabinet Sion Avocat can support you at every stage to defend your interests and secure negotiations with your creditors.

Do not hesitate to contact us to discuss your situation.