Redressement in the context of collective proceedings for businesses that are in difficulties means the taking of measures to restore the economic and financial health of a business.
Administration is defined by the Uniform Act as a proceeding designed to save the company and to clear its debts by means of a composition with creditors (concordat de redressement).
Conditions
Like preventive settlement proceedings, administration is applicable to any individual exercising a commercial activity or non-commercial activity, including publicly owned companies.
The basic criterion for determining whether preventive settlement or administration proceedings are appropriate is whether the company concerned is insolvent. Insolvency is a situation where it is impossible for a debtor to meet all its due liabilities with its available assets.
Procedure
- The competent court in matters relating to administration is the court having jurisdiction for commercial matters at the place where the debtor has its principal place of business or registered office.
- A debtor who is insolvent must file a declaration with the court registry. This declaration must be accompanied with several documents.
- The debtor must also file an offer of composition along the same lines as an offer to be made in connection with preventive settlement proceedings.
- It is also possible for the court itself to take the initiative of opening proceedings on the basis of information that may have been provided to it by the auditors or shareholders of a debtor, or by employees’ representatives.
- The judgment is registered as soon as possible with the RCCM. Extracts from the judgment must also be published in a legal journal, together with an invitation to creditors to declare their claims, and in the OHADA legal journal with a view to making the situation known to creditors in all the member states.
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