“The priority is prevention”: The president of the Draguignan commercial court takes stock of the economic health of the territory

At the head of the commercial court of Draguignan, which he has presided over since December 2020, François Mortini takes stock of last year and paints a rather favorable economic picture of the territory. But Dracénois insists on this point:

“The priority is prevention. This is nothing new, but it is even more true in the current context.”

After a historically low number of insolvency proceedings recorded in 2020, you expected a boom in 2021. Has this fear come true?
Not only has the expected increase not materialized, but the number of collective proceedings (safeguards of justice, reorganizations and judicial liquidations) has further decreased since we count 106 for the year 2021, against 130 in 2020 and 226 in 2019. This is a historic drop, we had never seen this. Of these 106 proceedings, 76 are direct liquidations and 30 receiverships.

This situation may seem paradoxical given the health context. How to explain it?
It is paradoxical, indeed. Last year, like many, I thought that in 2022 we would have turned the page on this health crisis. But this is not the case and the legislator, as well as the tax administration, have further postponed the deadlines for payment of the sums owed by the companies. For example, Urssaf lifted calls for contributions for the self-employed for one year and now plans to spread them over a period of twenty-four months from February 2022. On the other hand, the majority of requests of opening of procedure were on the initiative of the Urssaf which, for months, does not assign any more and lets continue situations which are not healthy. Finally, the loans guaranteed by the state, enormously solicited by companies from the start of the crisis, were to be amortized at the end of one year. Here too, this has been postponed and we are now talking about a deadline of June 2022. And companies in cash flow difficulty will have, in order to avoid filing for bankruptcy, the possibility of requesting amortization over ten years, with state warranties. This reduces the risk of insolvency and, therefore, collective proceedings.

“It’s a ticking time bomb”

Do you fear a “ticking time bomb” effect?
Certainly. It’s a ticking time bomb, no more, no less. Companies have become accustomed to operating in degraded mode, with reduced loads. But when the latter are called again, it may hurt. I actually dread the sequel.

Your missions are not limited to litigation. You also have a preventive role to play. Do you exercise it as you wish?
It must be recognized, I am very little asked for prevention. Companies do not anticipate upcoming deadlines. It must also be said that the action of the commercial court is penalized by the fact that the majority of them do not file their accounts within the time limits, that is to say no later than six months after the close of exercise. Result: this year again, we still have no visibility concerning the financial health of companies created in 2021. Consequently, we cannot intervene to seize companies and check whether there is collateral damage. And yet, in terms of prevention, the tools made available to debtors are not lacking.

“Friendship is preferable to contagious”

What are they?
We have, on the one hand, the mandate to this, which makes it possible to confidentially solicit an agent, then commissioned to resolve a conflict with a main creditor. And on the other hand, conciliation, which remains a wishful thinking because it is often difficult to bring the parties concerned together. Added today is the crisis resolution processing procedure, introduced by the legislator on May 31, 2021. In other words: at the sole request of the debtor, and in the presence of the public prosecutor, this measure makes it possible to benefit from an accelerated receivership measure, and a way out of the crisis in a maximum of three months compared to a year for a traditional receivership. Finally, beyond the fact that we work with many satellite associations such as Psychological aid for entrepreneurs in acute suffering, we have within the court a team dedicated to prevention, made up of myself and two judges. By appointment, and under the seal of confidentiality, our mission is to receive, listen and warn. In 2021, only eighteen companies spontaneously called on us. That’s half as much as previous years.

Why such a reservation vis-à-vis consular jurisdiction?
By ignorance of our operation, I think, but also because of the bad communication made on this subject by the tax authorities. And, in some cases, the fear of the court, which sends back to a negative image. Whereas in reality, prevention and the amicable solutions that accompany it are always preferable to litigation, which is never good publicity for the debtor.

Your outlook for the future?
Without being enthusiastic, I remain confident because the economic situation of the territory is far from being catastrophic. But to maintain a climate favorable to development, we must show rigor and availability. And business leaders will also have to take their responsibilities. Because we are there to administer good justice and that necessarily involves recognizing, at some point, those who anticipated and those who did not. Kindness has its limits.

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