Checking Free of Charge Whether a Company Is in Reorganisation

Do you suspect that a partner company is experiencing financial difficulties, or do you want to check the health of a company before signing a contract? Knowing a company's legal situation is crucial to securing your commercial relationships and avoiding unpleasant surprises. Fortunately, several free means make it possible to check whether a company is subject to court-supervised reorganisation proceedings (redressement judiciaire).

What is court-supervised reorganisation (redressement judiciaire)?

Court-supervised reorganisation is a collective insolvency procedure that allows a company that has stopped paying its debts (cessation des paiements) to continue trading while benefiting from legal protection. Under Article L631-7 of the French Commercial Code, the procedure aims to enable the continuation of the company's activity, the maintenance of employment and the settlement of its liabilities.

This procedure differs from compulsory liquidation (liquidation judiciaire) by its protective objective: the company keeps its chances of recovery under the supervision of the court. The process generally involves the appointment of a court-appointed administrator (administrateur judiciaire) and the drawing up of a reorganisation plan. The conditions for opening, the conduct and the outcomes of this procedure are set out in our article on companies in court-supervised reorganisation.

Why check whether a company is in reorganisation?

Knowing a company's situation offers several strategic advantages:

• Financial protection: avoiding unpaid invoices and doubtful debts
• Securing contracts: adjusting payment terms or requesting guarantees
• Anticipating risks: taking preventive measures before a possible liquidation
• Stronger negotiating position: adjusting one's commercial strategy with full knowledge of the facts

Free sources of information on companies

The French official gazette of civil and commercial announcements (BODACC)

The BODACC is the most reliable official and free source for checking whether a company is in court-supervised reorganisation. This official gazette publishes all court decisions concerning companies, in particular:

• The opening of collective insolvency proceedings
• The appointment of administrators and creditors' representatives (mandataires judiciaires)
• Reorganisation plans
• Conversions into compulsory liquidation

Available on the official website bodacc.fr, this database can be searched by company name, SIREN number or court. The information is published there within eight days of the court's decision.

The Trade and Companies Register (RCS)

The registry (greffe) of each commercial court keeps a register open to the public. These registers record the collective insolvency proceedings in progress. Consultation on site is free, and some registries offer free extracts online.

The information available includes:

• The status of proceedings in progress
• The dates on which proceedings were opened
• The identity of the creditors' representatives
• Changes to the company's status

The official websites of the commercial courts

Many commercial courts publish on their websites the judgments opening collective insolvency proceedings. These publications comply with the statutory time limits and provide first-hand information.

How to find out for free whether a company is in court-supervised reorganisation: a practical method

Step 1: Gather the basic information

Before starting your searches, have the following to hand:

• The exact registered name of the company
• The SIREN number (9 digits)
• The address of the registered office
• The competent commercial court

Step 2: Consult the BODACC

Go to bodacc.fr and use the advanced search tool. Enter the name of the company or its SIREN number. Focus on the "Procédures collectives" (collective proceedings) sections of recent publications.

Step 3: Check with the competent registry

Contact the registry of the commercial court for the area in which the company is based. Most offer a free telephone information service to confirm the existence of proceedings.

Step 4: Cross-check the sources

For a complete check, consult several sources:

• The website of the local commercial court
• The legal notices of the département
• The Infogreffe database for additional information

Warning signs to watch for

Certain signs may reveal a company's difficulties even before proceedings are opened:

Financial indicators

• Recurrent late payments
• Requests for payment by instalments or for extensions of time
• Bounced cheques
• Changes to payment terms

Legal indicators

• Summonses for unpaid debts
• Protective attachments (saisies conservatoires)
• Protests of bills of exchange or commercial paper
• Termination of contracts by suppliers

Commercial indicators

• Decline in activity
• Closure of points of sale
• Redundancies for economic reasons
• Frequent changes of managers

Understanding the information found

The different types of proceedings

When you find a mention of collective insolvency proceedings, a distinction should be drawn between:

• Safeguard (sauvegarde): the company has not yet stopped paying its debts
• Court-supervised reorganisation: the company has stopped paying its debts but can be turned around
• Compulsory liquidation: the company cannot be turned around

How proceedings develop

Under Article L631-22 of the French Commercial Code, the court may order the total or partial sale of the business if the reorganisation plans put forward appear manifestly insufficient. This provision shows that the situation can change quickly.

Time limits to bear in mind

• Publication in the BODACC: within 8 days of the judgment
• Maximum observation period: 18 months
• Duration of the reorganisation plan: 10 years at most

The limits of free checks

Publication delays

The information is not available immediately after the judgment. A delay of a few days may elapse between the court's decision and its publication.

Partial information

Free sources do not always provide details of the debts, the full identity of the creditors or the precise progress of the proceedings.

Updates

Some websites are not updated in real time. The freshness of the information consulted should be checked.

Checking for reorganisation: complementary tools

Specialist databases

Several organisations offer paid services but sometimes provide limited free access:

• Infogreffe.fr for Kbis extracts (company registration certificates)
• Societe.com for an overview of the situation
• Local chambers of commerce

Professional networks

Trade unions and sector associations often hold information on their members and can give warning of difficulties affecting companies in the sector.

What to do after identifying a reorganisation

Assessing the impact on your commercial relationships

A company in court-supervised reorganisation generally continues to trade. However, you should adapt your approach:

• Strengthen payment guarantees
• Shorten payment periods
• Request larger deposits

Securing your claims

If you are a creditor of the company, declare your claim promptly to the creditors' representative within the prescribed time limits.

Monitoring developments

Remain vigilant as to how the proceedings develop, as they may move to compulsory liquidation. The precautions to take in order to continue a commercial relationship during the proceedings are set out in our guide to working with a company in reorganisation.

Mistakes to avoid

Relying solely on appearances

A company may appear prosperous while being subject to reorganisation proceedings. Only an official check provides reliable information.

Neglecting continuous monitoring

A company's situation can change quickly. A one-off check is not sufficient for important commercial relationships.

Confusing the different proceedings

Reorganisation and compulsory liquidation do not have the same consequences. It is crucial to understand the nature of the proceedings under way.

The importance of professional advice

Although free tools allow an initial check, interpreting the information found can prove complex. Article L631-19-2 of the French Commercial Code provides for specific obligations for certain companies, in particular those with more than 150 employees, which can complicate the analysis.

A French lawyer who focuses on business law can help you to:

• Interpret correctly the information gathered
• Assess the legal and financial risks
• Put in place a suitable protection strategy
• Draft preventive contractual clauses

Checking free of charge whether a company is in reorganisation is possible thanks to official tools such as the BODACC and the registry registers. This step, open to everyone, is an essential reflex for securing your business relationships. Do not hesitate to consult a legal professional for an in-depth analysis of the situation and the implementation of protective measures suited to your specific circumstances.