Government measures in key jurisdictions 3rd edition final - Flipbook - Page 52
Aurélien Condomines condomines@aramis-law.com |
+33 (0) 1 53 30 77 00
Anne-Hélène Le Troccquer letrocquer@aramis-law.com |
+33 (0) 1 53 30 77 00
Loans and
financial
support
•
Has the government
put in place any new
bank funding
schemes?
•
Employment
What financial support
is the government
providing to
businesses and
to individuals on
employment issues?
Insolvency
What measures
have been taken
to reinforce
contracts?
52
The mechanism of “partial unemployment” has been facilitated for companies whose
employees cannot work because of the Covid situation. Employers get a reimbursement of 70%
of their gross salaries (100% for low salaries), up to a (relatively high) monthly threshold. The
exceptional short-time working scheme for home-based employees has been extended until 1
June in order to help individual employers in difficulty to pay their employees and protect
them against the risk of losing their jobs.
•
No substantial rules were enacted on insolvency. Deadlines have been extended to take into account
the lockdown situation and commercial courts, who are in charge of insolvency proceedings, have put in
place specific emergency procedures in order to be able to handle urgent matters. One specific rule
presumes that the financial situation of companies filing for insolvency shall be assessed as it was on
March 12, 2020.
•
Specific rules have been enacted to suspend or extend the effects of certain contractual deadlines
(except for financial obligations and guarantees listed in art. L211-36 of the French Financial and
Monetary Code). The principle is that periodic penalty payments, penalty clauses, termination
clauses sanctioning the failure to fulfil an obligation within a specified period shall be deemed not
to have commenced or to have taken effect if that period has expired during the “lockdown
period” (as defined by the government as a period ending on June 23). They shall take effect from
the expiry of a period of one month after the end of that period if the debtor has not performed
his obligation before that time. The ending date of the protection period has been set to June 23,
2020. In addition, when an agreement may be terminated only during a specified period or when it
is renewed if no termination is notified within a specified period, that period shall be extended, if
it expires during the “lockdown period”, by two months after the end of the “lockdown
period”. Further, for agreement which can only be terminated in a defined schedule or which are
automatically renewed in the absence of denunciation within a limited period: those periods or
deadlines are extended if they expire between 12 March and 2 months after the expiry of the
“lockdown period”.
Has the government
made any changes
to insolvency
legislation?
Contractual
Issues
The Government has provided for a guarantee scheme to support bank financing for businesses.
Until December 31, 2020, companies (with the exception of property companies & banks) may
apply for State-guaranteed bank loans which represent up to 25% of 2019 revenues (or two years
of payroll for so-called “innovative” companies or companies created since 1 January 2019). No
repayment will be required during the first year of the loan. For companies or groups of
companies of important size (>5000 employees or >1.5 billion EUR revenues in France), this loan
implies renouncing to distributing dividends in 2020. A decree of 6 May 2020 from the Ministry of
the Economy and Finance extended the beneficiaries of this scheme to certain non-trading real
estate companies, companies in difficulty since 1 January 2020, “Young Innovative Companies”
and loans granted through crowdfunding/ participatory financing platforms.
Government measures in key jurisdictions