You have been granted the stay. What now?

Your debts are put in brackets for a period of up to six months. In some cases you will be able to repay them by the end of that period and the proceedings will stop there. But what if you find no solution in the meantime?

You have no time to lose. To obtain a repayment plan and a possible extension, you must give the judge concrete evidence that your company is viable. What that evidence is depends on your situation, but a few steps apply in every case.

The six steps

• Draw up a business plan for the next two years. Neither ambitious nor excessively cautious: simply realistic. It will establish whether the company is viable and what it can afford to repay.
• Gather the facts that justify the figures used in the plan: contracts, renegotiated prices, costs cut, changes in tariffs.
• Run simulations of the negotiation and of write-downs, taking account of what you can afford to repay and of the possibility of spreading it over three or four years. Develop a fair and even-handed rationale to justify your choices. Three things will weigh with the court: the continuity of the company, the preservation of jobs, and the credibility of your recovery plan. The rest is negotiable.
• Test your scenarios with the delegated judge and make him your ally. He plays a major part in the proceedings: the court will rely heavily on him in forming its view.
• Negotiate your debt with your creditors. Specific rules apply. Either you obtain the agreement of 50% of creditors representing 50% of the debt, and the judge will very probably confirm your plan. Or you do not, and even then nothing is lost: the judge retains the power to impose a plan. He must, however, be persuaded by it — hence the importance of a solid, credible plan, preferably supported by the delegated judge.
• Apply the plan to the letter. You are only safe once the last cent has been repaid on the agreed schedule, and there is no room for error. You will manage it more easily by organising yourself for success, with a well-chosen set of indicators.

What your usual advisers will not do

Judicial reorganisation is an excellent tool for a company hampered by heavy debt but otherwise viable. There is no reason to hesitate in using it.

Your lawyer and your accountant will help you, but they will rarely provide the overall view the judge needs. Building a business plan, assessing what the market can bear, improving how the company runs: these are not their fields.

So do not lose time. Improve the chances of saving the company by moving fast, with advisers able to work across the whole picture.

Nady Bilani