Business failures - France 2020May

Period under review : April 2020
In April 2020, the number of corporate bankruptcies decreased by 19.1% year-on-year
  • This decrease does not reflect a reduction in the number of distressed firms, but rather the impact of the lockdown on the operation of commercial jurisdictions and regulatory changes that temporarily modify the dates for characterising and declaring a firm as insolvent.
  • It can be observed in all sectors of activity and for all sizes of companies, without it being possible to analyse it from an economic point of view.
To find out more: data on business start-ups are reported by the French National Institute of Statistics and Economic Studies (INSEE): Business start-ups on the INSEE's website
A - Corporate bankruptcies by sector
Bankruptcies in number of legal units, year on year change (%)
Aggregate over the last 12 months (a) (gross data) Quater to quater sa/wda (bc) Monthly data sa / wda (c)
Apr. 19 Apr. 20 Apr. 20/Apr. 19 May 20 prov. May 20/May 19 Apr. 20 Feb. 20 Mar. 20 Apr. 20
Business sector
Agriculture, forestry and fishing (AZ) 1,415 1,157 -18.2% 1,037 -27.6% -55.3% 55 55 33
Industry (BE) 3,850 2,994 -22.2% 2,821 -26.4% -33.6% 225 170 128
Construction (FZ) 11,802 9,454 -19.9% 8,821 -24.8% -46.9% 677 482 204
Wholesale and retail trade; repair of motor vehicles and motorcycles (G) 11,568 9,690 -16.2% 9,155 -20.4% -35.9% 841 522 278
Transportation and storage (H) 2,121 1,826 -13.9% 1,705 -20.5% -45.8% 151 93 42
Accommodation and food service activities (I) 7,350 5,822 -20.8% 5,528 -24.0% -30.6% 516 315 175
Information and communication (JZ) 1,282 1,187 -7.4% 1,113 -12.5% -28.9% 121 57 47
Financial and insurance activities (KZ) 1,110 977 -12.0% 933 -15.9% -15.7% 79 60 59
Real estate activities (LZ) 1,640 1,371 -16.4% 1,288 -21.2% -41.5% 81 72 53
Advisory & Business support activities (MN) 6,324 4,990 -21.1% 4,677 -26.5% -34.4% 429 288 138
Education, human health and social work services, Arts, entertainment and recreation, Other service activities (P to S) 5,435 4,169 -23.3% 3,888 -29.2% -38.8% 240 210 190
All firms (d) 54,273 43,904 -19.1% 41,211 -23.9% -38.0% 3,519 2,318 1,319
Source: Banque de France - database: Fiben. Data available at end-June 2020: final for April, provisional for May.
Calculation : Banque de France - Companies Directorate - Companies Observatory
a Aggregate number of corporate bankruptcies over the past 12 months compared to the same aggregate one year ago
b Aggregate number of corporate bankruptcies over the past 3 months compared to the same aggregate three months ago
c sa : seasonally adjusted - wda : working day adjusted
d The line « All firms » includes legal units whose business sector is not known
B - Corporate bankruptcies by firm size
Bankruptcies in number of legal units, year on year change (%)
Aggregate over the last 12 months (a) (gross data) Quarter to quarter sa/wda (bc) Monthly data sa / wda (c)
Apr. 19 Apr. 20 Apr. 20/Apr. 19 May 20 prov. May 20/May 19 Apr. 20 Apr. 20 Feb. 20 Mars 20
Size
SME, among them 54,238 43,866 -19.1% 41,169 -23.9% -38.1% 3,519 2,313 1,312
Micro-enterprises and unknown firm's size 51,290 41,345 -19.4% 38,765 -24.2% -39.1% 3,280 2,156 1,199
Very small firms 1,778 1,477 -16.9% 1,411 -19.8% -31.2% 120 99 67
Small firms 843 731 -13.3% 691 -19.4% -18.3% 73 40 38
Medium-size firms 327 313 -4.3% 302 -10.1% -21.9% 24 19 16
ISE - Large Firms 35 38 8.6% 42 16.7%
All firms 54,273 43,904 -19.1% 41,211 -23.9% -38.0% 3,519 2,318 1,319
Source: Banque de France - database: Fiben. Data available at end-June 2020: final for April, provisional for May.
Calculation : Banque de France - Companies Directorate - Companies Observatory
a Aggregate number of corporate bankruptcies over the past 12 months compared to the same aggregate one year ago
b Aggregate number of corporate bankruptcies over the past 3 months compared to the same aggregate three months ago
c sa : seasonally adjusted - wda : working day adjusted
C - Changes in corporate bankruptcies
1 - Number of bankruptcies
Aggregate number of bankruptcies over the past 12 months
From Dec. 1991 to April 2020
2 - Change in bankruptcies
Year-on-year change in the 12-month aggregate
From Dec. 1991 to April 2020 (+May 2020 provisional)
(in %)
3 - Loan amounts of bankrupt non-Financial firms over loan amount
of all firms
Aggregate over the past 12 months
From Dec. 2006 to April 2020 (+ May 2020 provisional)
(in %)
4 - Loan amounts of bankrupt non-financial firms over loan amount of all firms - broken down by firm size
Aggregate over the past 12 months
From Dec. 2006 to April 2020 (+ May 2020 provisional)
(in %)
Source: Banque de France, Companies Directorate, Data available at end-June 2020: final for April, provisional for May.
Impact of the lockdown and of the adaptation of the regulations concerning companies in difficulty on corporate bankruptcies statistics
In the context of the Covid-19 health crisis, at a time when economic activity slowed down sharply, putting a large number of companies in difficulty, the number of corporate bankruptcies paradoxically posted a marked decline. This can be explained both by the lockdown which affected the functioning of commercial courts, and by the adaptation of regulations which temporarily granted additional time both to assess the state of insolvency and to report it.
Number of monthly corporate bankruptcies (gross data, 2018 - 2020)
Source: Banque de France, Companies Directorate, Data available at end-June 2020: final data up to April 2020, provisional for May 2020.
The closure from 16 March 2020 of all courts (with the exception of courts that have to judge "essential disputes", which do not include the commercial courts) sharply reduced the activity of commercial courts, which was essentially dematerialised during the lockdown. As a result, the opening or conversion of a large number of proceedings was postponed.

The Order 2020-341 of 27 March 2020 adapting the rules regarding companies and agricultural holdings in difficulty to the health emergency and amending certain provisions of criminal proceedings, also introduced changes likely to postpone the examination of situations of insolvency for companies whose situation worsened during the period of economic slowdown. In particular, it provides that until 24 August 2020:
  • the assessment of the situation of insolvency be frozen at 12 March 2020 (Article 1, I, 1°) ;
  • conciliation periods be automatically extended (Article 1, II);
  • safeguard plans be extended by decision (Article 1, III).
Thus, for the period from 12 March to 24 August 2020, a company that would have been considered as being insolvent under the previous regulations will not be considered as such since its situation will be assessed at 12 March 2020, the date on which it was not insolvent.

At the same time,
Order 2020-306 of 25 March 2020 provides that the requests for the initiation of collective proceedings, for any company considered insolvent, due to be made between 12 March 2020 and 24 June 2020, be deemed to have been made within the legal timeframe, if they are made within the legal timeframe as from 24 June 2020 (i.e. 45 days, see Article L631-4 of the French Commercial Code). Thus, declarations that would otherwise have been made earlier will be carried forward after this date.
More information on: methodology, time series, calendar
All the series published by the Banque de France are available at the following address
Webstat Banque de France
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Corporate bankruptcies
STAT INFO - May 2020
Contact: GPS.support@banque-france.fr

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Business failures - France
  • Published on 07/09/2020
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Published on Thursday, July 9, 2020