Business failures down 38.1% in 2020

This is explained by the support measures put in place by the government and by the temporary disappearance of creditors’ assignments, according to a study by the Altarès cabinet.

Business failures in France fell by 38.1% in 2020, reaching their lowest level in 30 years, thanks to government support measures and the temporary disappearance of creditors’ summons, a cabinet study revealed on Monday Altarès.

Last year there were only 32,184 business failures in France, that is to say “20,000 fewer procedures than in 2019”, notes Thierry Millon, director of studies at Altarès. “These figures should not make us forget the more than 130,000 jobs threatened after the bankruptcy filings of big names in clothing who did not survive the crisis (The hall , Camaïeu, Celio …) “, he adds.

Judicial receipts fell by almost half (-49.4%), while direct judicial liquidations fell only by a third (-33.7%). The proportion of liquidations thus rose from 67.6% to 72.5% of all proceedings initiated, according to figures compiled by Altarès, the exhaustive study of which takes into account all proceedings initiated. “In 2020, claims of creditors, which are traditionally at the origin of 30% of liquidations, have disappeared”, explains the firm. “Frozen until the summer due to regulatory changes, assignments did not resume at the end of the year”, because public and private creditors have “Been encouraged to appeal to amicable settlements”, he explains.

Rollback of safeguard procedures

The number of safeguards, a preventive device which represents only less than 3% of the procedures that come before commercial courts, “Down 14% with 833 judgments”, also notes Altarès. SMEs with more than 50 employees rely more on safeguarding, with a 12% increase in these procedures, while their number has fallen by 15% for companies below this threshold.

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The decline in business failures affected all sectors of the economy, even those particularly affected by administrative closure measures to fight the Covid-19 pandemic such as catering, where the drop reached 39.1% compared to to 2019. Altarès does not expect the decline to continue in 2021: according to Thierry Millon, “We must anticipate a sharp increase in the number of failures” with “At least a return to the situation of 2019 (52,000 failures) and probably more if the Covid victims were to be added a large number of the 20,000 companies spared in 2020”.

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