The increase in business failures in France places the question of reversal at the center of economic debates. Long perceived as a final appeal, restructuring today becomes a strategic lever, supported by new legal mechanisms. In our latest podcast, we exchanged with Marie Crumière, restructuring partner at Reed Smithto understand how these tools transform crisis management and why the case Hosmanonline real estate agency is a turning point.
Anticipate rather than undergo
The first message is that it all starts with cash. Day -to -day follow -up is often defaulting in SMEs and startups, more focused on their growth than on their cash burn. However, it is this cash that determines the ability of a business to face its liabilities due. “When a business manager arrives saying that he is not sure to be able to pay his wages at the end of the month, it’s already too late,” recalls Marie Crumière.
This lack of anticipation is all the more damaging since French law offers preventive systems, ad hoc mandate And conciliation, which make it possible to open a confidential discussion with the creditors. But French culture remains marked by a fear of the commercial court and by the perception of restructuring as an admission of failure. A reluctance that the practice is however being exceeded.
Hosman: when the real estate crisis accelerates the switch
Created to dust off the real estate transaction market, Hosman had experienced rapid growth, to reach a turnover of approximately 7 million euros. But the crisis in the real estate sector has tensioned its model. Facing a passive of 14 million eurosthe company had to successively go through all of the available procedures: ad hoc mandate, conciliation, then receivership.
This recovery phase, far from being a stigma, made it possible to trigger three decisive actions:
- Social restructuringwith the possibility of funding layoffs via AGS, therefore without puncturing cash.
- A gel of the passivewhich gave immediate breathing.
- A preparation for the classes of affected partswhich was going to become the outing solution.
The role of the classes of affected parts
Introduced in France in 2021, this mechanism deeply changes the logic of restructuring. Until then, creditors had to consent individually to the abandonment of debt, now, they are grouped by classes sharing common economic interests (banks, public creditors, unsecured suppliers, etc.). Each class votes, and if the majority is reached, the court can impose restructuring, including a recalcitrant minority.
In the case of Hosman, this innovation made it possible to drastically reduce debtto preserve the management team and open the way to the entrance to a new investor. An option made possible by the demonstration that no other scenario, no transfer plan, no compulsory liquidation, would have been more favorable to creditors.
Transparency and pedagogy: the key to trust
To convince the creditors, however, remains a delicate exercise. Distrust is often strong vis-à-vis the financial projections presented by the leaders and to restore credibility, a independent auditor is mandated in order to establish realistic forecasts, integrating different sensitivity scenarios.
But Hosman’s success has also played on a more human factor than the pedagogy of the founders. Despite requests for abandoning very heavy receivables, entire classes of creditors voted in favor of the planrecognizing that it was the only survival route. This work of conviction, supported by the court administrator and the lawyers, transformed a climate of distrust into collective membership.
Towards a more uninhibited practice
For Marie Crumière, the evolution is cultural as well as legal, the commercial courts, in particular in the Paris region, now know the specifics of startups like the dependence on fundraising, a high consumption of cash, the lack of immediate profitability. Far from the dusty image, consular judges are curious, pragmatic and attentive to entrepreneurial realities.
“I have always had very positive feedback from accompanied leaders, who discover a listening court and not a punitive machine,” she said. What encourage entrepreneurs to see restructuring not as a failure, but as a management stage in its own right.
A lesson for the startup ecosystem
Hosman illustrates a substantive trend: startups, long focused on growth and fundraising, must now integrate the Risk of reversal in their trajectory. The classes of affected parts open a new field, making it possible to maintain the continuity of the company and to attract new investors on a sanitation basis.
For the ecosystem, the restructuring is no longer an end of the game, but a second chanceprovided you anticipate, communicate and mobilize the right legal tools.
